170 MODERN MONETARY SYSTEMS 
weight of fine metal had received a definite denomination 
which was often traditional, have adopted the principle of 
maintaining a single scale. Thus, with a system of free 
coinage, the purchase price of metal was repaid by the sum 
of money of account of the number of coins contained in the 
bullion, save that in certain countries a very small sum 
which was known in advance was deducted to cover the 
expenses of minting. Lastly, the legal French ratio of 
1—1 §3 between gold and silver was very widely adopted.! 
It is true that the free coinage of both metals has given 
rise to alternating leakages of gold and silver in bimetallist 
countries owing to action taken in monometallist coun- 
tries. But we have seen that the difference between the 
“commercial” value of the two metals and their legal ratio 
has been small and is due to the various costs arising from 
the transformation of bullion into coin and wice versa.” 
Circumstances have changed; this can and should justify 
a corresponding change in our ideas. The point is whether, 
in adopting the system of free coinage, legislators who 
believed that they were keeping in the background did 
not in fact influence the value of the metal or metals 
which they included in this system. 
It will be easily recognised that this system, by making 
the metal convertible into coin ad libitum, whereas in 
1 At least approximately similar rates have been adopted except in the 
United States where in 1834 a change was made from the ratio I-15 to 
1-16. 
2In his interesting and profound studies of monetary problems 
(“Eléments d’Economie politique, La circulation”), M. Houques-Four- 
cade, Professor at the University of Toulouse, after having described the 
numerous measures taken in Europe and in the United States during the 
19th century to keep the monetary systems working, comes to the con- 
clusion that the bimetallist system is unstable (p. 249). We admit that we 
cannot agree with this conclusion: first, because the author in describing 
the relative difficulties in the use of silver goes far beyond the time at 
which bimetallism came to an end and thus attributes to this system 
difficulties which in fact arose from its disappearance; secondly, because the 
difficulties of the period of bimetallism are in no way due to the impossi- 
bility of maintaining a stable exchange ratio between two metals, both 
being equally protected from the influence of supply and demand (as they 
have the advantages of an unlimited market and a fixed rate), but merely 
from the unhappy position of bimetallist countries which are caught 
between gold-standard and silver-standard countries.