THE NOTION OF MONEY 167 
whose exchange ratio was strictly defined by law and guaran- 
teed by the inscription on the coins themselves. The indirect 
result in monometallist countries was that individuals 
could have metal coined externally which was not 
admitted to free coinage in their own country and in 
exchange take out of the circulation of neighbouring 
countries the metal which could be transformed into legal 
currency in their own country—z the extent at least to 
which this circulation was sufficient to meet the demand. 
It must, however, be recognised that the working of the 
bimetallist system which cannot be explained on the sup- 
position that precious metals, freely coined, have independent 
exchange values determined like those of any other two 
commodities can only be understood if it be recognised that 
the system of free coinage as applied to two metals both of 
which are convertible into monetary units at a constant 
rate has created for these two metals a very special market 
so that they are exempt from the laws which govern exchange 
value in ordinary markets. 
But in order to grasp the fundamental importance of 
this piece of monetary experience it is not enough merely 
to lay down the possibility of maintaining an approximately 
stable exchange ratio between gold and silver. For, in 
making this observation, writers generally confine them- 
selves to admitting that the possibility of converting one 
metal into the other establishes a connection between the 
rates of the two metals, but continue to state that the rate 
of one of the metals is determined “naturally” and inde- 
pendently of any legal prescription. We must still inquire 
whether this experience has not shown, contrary to 
opinions based on a rather superficial observation of 
previous currencies and adopted by the authors of bi- 
metallist legislation, that the law may have a decisive 
influence, not only on the ratio of value between the two 
precious metals, but also in determining the -alue of 
any monetary metal. Although contemporary thinkers, 
chiefly in Germany and in France! are inclined to 
1 See Gide, “Principles d’Economie Politique,” 11th edition, p. 261. 
“We now have numerous proofs of the influence exercised by legislation