Bimetallism: Yesterday, Today and ... tomorrow?

As part of today's innovation is the invention of the past. «New - this is well forgotten old». Can I say so on the bimetallic monetary standard? And if the meaning of the experience last a long time bimetallism at a time when there is widespread dissatisfaction with the current international monetary system?

Noble - the lame, or bunchy?
Bimetallic standard or bimetallism, is a monetary system, which together turn gold and silver coins, between which a fixed exchange rate. As with any monetary system, bimetallism includes certain institutional arrangements, the existing de jure, and the practice of money, the emerging de facto.

Institutional arrangements are based on two components: the law of minting and the law of monetary circulation. The authorities may allow the free minting of coins from one or both metals. «Free» chasing does not mean free of charge: the government or the private mint charges some fee (senorazh) for the conversion of kilograms of precious metal in a kilogram of coins.

Free coinage of gold and silver coins is a necessary but not sufficient condition for bimetallic standard. Act further defines the monetary parameters such as the face value of coins, a unit of measurement, conditions of treatment, etc. When the free circulation, liberal import and export of both metals coin becomes an unlimited legal tender. Accordingly, bimetallism has the following characteristics:
- Free coinage;
- Unrestricted circulation of coins and precious metals;
- Fixing the exchange rate between the two metals.

If all three conditions are met, bimetallism is called double standard or double rates. In its pure form it existed in the United States and Latin Monetary Union in the XIX century. The variation described conditions gives different monetary system. When only one metal is allowed to minting coins, and his treatment is unlimited, the bimetallism becomes monometallizmom. United Kingdom monometallizm introduced in 1816. If the two metals can be treated without any restrictions, but only one is allowed to chasing, then the system is called a lame, or humpbacked, bimetallism. He worked in Britain from 1774 to 1816 he worked. France, Germany and the United States - since 1873. Finally, the last option - it is minting coins of both metals and the free circulation of one of them. Exchange trade funds, which are formed in such a way, is the market independently. Trading money turned in medieval Europe, as well as in Germany, Austria and the Netherlands before the irrevocable transition to the gold standard. Complete classification of monetary systems in table 1.


As already mentioned, the standard is characterized by the practice of money, the emerging de facto. De jure in the country can act bimetallism, but de facto - monometallizm. This is when the one metal displaces another from the money. Why and when displacement occurs, will discuss below, we note only that such a situation occurred in the UK until 1774, to Mexico in 1905 and Prussia in the 1820-ies.

History of Gold «elutriate» Silver
Gold and silver have always walked hand in hand in the world of money. In the Roman Empire treated like gold and silver coins. In Europe, starting in the early Middle Ages, the foundation of national monetary systems was only silver. In the XIII century, gold coins, hodivshie treatment of Byzantium and the Muslim world, returned to Western Europe. However, there were very few and they were assessed in face value of silver coins (mostly in the mark). After the conquest of New World gold in the XVI century, fled to the continent. European governments began to set the official rate of exchange between gold and silver. Because of the fact that among the powers of Europe had no common opinion about the optimal exchange rate, from time to time raised a speculative movement of metal from one country to another. To prevent speculation government periodically adjusted the official exchange rate.

The first two-thirds of the XIX century the world's monetary system is divided into three blocks. Depending on the type of metal standard varied gold and silver monometallizm, as well as the bimetallic standard. In the gold pack was composed of Great Britain, Portugal, and most British colonies and dominions. In the silver block consisted of Prussia, Russia, Austria, Netherlands, Denmark, Norway, Sweden, Mexico, China, India and Japan. The core of bimetallic cluster formed United States and the Latin Monetary Union, which was led by France. In addition to her in the Union, acting in 1865, consisted of Belgium, Italy, Switzerland, the Papal region and Greece. The same monetary system has been applied in Bulgaria, Romania, Spain, Finland, which is formally in the Union is not included.

The general standard, as well as the parallel circulation of coins from different countries in a single unit to ensure the stability of exchange rates within each block. However, among the blocks of a stable exchange rate is not observed: the price of gold and silver in relation to one another is constantly changing. From 1800 to 1870-ies. exchange rate fluctuations were relatively small. As soon as a new gold deposit, the price of its equivalent in silver fell, and when found silver deposits, the reduced price of silver. Fluctuations in rates led to an interesting phenomenon: of the money is alternately displaced by gold, then silver. In 1850-ies. in California, Australia, and Nevada found extensive gold россыпи and podeshevevshy metal poured into the country bimetallism. It fully minted gold coins, which according to the official rate of exchange for silver coins. For the gold monometallizmom (primarily the UK) proved beneficial to change your gold in Paris to service debt monometallizma silver.

Due to the fact that he supported the free circulation in the Latin Monetary Union Gold «elutriate» Silver. Act money was being attributed to British Bankers T. Greshemu: «Worst money replacing the best». But in 1870 in the United States are large deposits of silver, and the influx of money undermines the reputation of the noble metal. Many countries, including Germany, in 1871, demonetiziruyut silver and gold monometallizm injected. A little earlier the majority of delegates to the Paris Conference of 1867 progolosovalo for making the gold standard of international status. Now silver is beginning to displace gold in bimetallism. In short, the de facto bimetallism turned it into gold, the silver monometallizm. This system was subsequently described as an alternative standard, since in practice of treatment that disappeared metal, the value of which at this time was overstated.

Many economists believe that bimetallism as such does not exist, but there is only a system of switching between the two monometallic standards.