THE REIGN OF BIMETALLISM I 
between currencies of various metals. This conclusion was 
so obvious that the law was forced to take it into account. 
In England the difficulty was overcome, as is well 
known, by monometallism. The system of free coinage 
was applied only to gold. Silver was still bought by the 
Government and minted only in such quantities as were 
considered necessary for petty cash transactions; it was 
scaled in terms of gold, but was only legal tender to small 
amounts. Then silver, being reduced to the level of copper, 
acted merely as a substitute for gold, and was only used for 
minor transactions. As gold was alone held to be in free 
circulation, it was considered the true money in that it 
served as the standard measure in business transactions; 
it was the only standard metal. 
The reformers of the French Revolution adopted the 
same principles but applied them differently. They ad- 
mitted both metals to free coinage. They then took as a 
basis for their new monetary system the silver franc, which 
corresponded almost exactly to the livre of the time. As 
they thought themselves unable to establish a fixed ratio 
between the gold coin and silver, they decided in the first 
instance to use the former as mere “commercial tokens,” 
bearing a statement of weight and fineness, but without 
acquiring a definite exchange value in relation to silver 
coin either in virtue of their denomination or of any legal 
exchange ratio. 
It was only urgent practical necessity that overcame 
these theoretical scruples and induced the Legislature in the 
year XI to fix a legal exchange ratio between the two metals 
and to state on the gold coin an amount in francs corre- 
sponding to this ratio. A régime resulted under which both 
metals were accepted for free coinage and at the same time 
a fixed exchange ratio was established between them, i.e., 
a bimetallist system. At first it was considered illogical 
and contradictory,! even by its originators. On the one 
1 The first report of the “Comité des Monnaies” in 1790, quoting Locke 
and Newton as authorities, states that there is “a physical impossibility and 
a perpetual contradiction between the facts and any law which attempts to 
fix once for all the price of metals used for minting them.” Nevertheless