MODERN MONETARY SYSTEMS 
Third type: Bimetallism.—Gold and silversare both ac- 
cepted for free coinage, both are unlimited legal tender; there 
is a fixed and legal exchange ratio betweernthe gold and 
silver currencies ; notes are convertible either into gold of 
silver at the discretion of the Bank of Issue. “Ss. 761% ~ 
This system, which flourished for a considerable period 
—from the beginning of the 19th century until 1873—in 
many European and American countries and has now dis- 
appeared, is also called the system of the double standard. 
As both metals could be freely imported, exported and 
coined, the countries in which it was adopted possessed a 
basis of settlement and a standard in common with mono- 
metallist gold standard countries on the one hand, and with 
monometallist silver standard countries on the other. 
Fourth type: “‘limping” or incomplete Bimetallism.— 
Historically this is a debased form of the preceding 
system. 
The essential difference between them is the disappear- 
ance of the free coinage of silver. States which have adopted 
it no longer have a standard in common with monometallic 
silver exchange countries, as they have ceased to accept 
payments by those countries in silver, subject only to the 
metal being recoined. The expression “bimetallism”’ 
adopted in the French literature of political economy is 
therefore wrong even if it is qualified and corrected by the 
word incomplete, since there is no longer a double standard in 
the exact sense which satisfies the decisive test of a consideration 
of transactions with foreign countries. Thus the so-called in- 
complete bimetallist system has generally worked out as a 
variation on the monometallist gold standard system in 
spite of the fact that silver coin or at least some kinds of 
silver coin may have remained unlimited legal tender and 
that bank notes may in theory have continued to be con- 
vertible into silver as well as into gold. 
In certain countries, however, with an insufficient stock 
of gold the practice of restricting the convertibility of notes 
into silver leads to a system tantamount to a monometallic 
silver standard or even to a system of inconvertible paper 
currency (Spain before 1914).