bimetallism


bimetallism
bimetallist, n.bimetallistic, adj.
/buy met"l iz'euhm/, n.
1. the use of two metals, ordinarily gold and silver, at a fixed relative value, as the monetary standard.
2. the doctrine or policies supporting such a standard.
[1875-80; BI-1 + METAL + -ISM]

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Monetary standard or system based on the use of two metals, traditionally gold and silver, rather than one (monometallism).

In the 19th century, a bimetallic system defined a nation's monetary unit by law in terms of fixed quantities of gold and silver (thus automatically establishing a rate of exchange between the two metals). The system provided a free and unlimited market for the two metals, imposed no restrictions on the use and coinage of either metal, and made all other money in circulation redeemable in either gold or silver. Because each nation independently set its own rate of exchange between the two metals, the resulting rates of exchange often differed widely from country to country. When the ratio of the official prices proved different from the ratio of prices in the open market, Gresham's law operated in such a way that coins of only one metal remained in circulation. A monometallic system using the gold standard proved more responsive to changes in supply and demand and was widely adopted after 1867. See also exchange rate; silver standard.

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▪ monetary system
      monetary standard or system based upon the use of two metals, traditionally gold and silver, rather than one (monometallism). The typical 19th-century bimetallic system defined a nation's monetary unit by law in terms of fixed quantities of gold and silver (thus automatically establishing a rate of exchange between the two metals). The system also provided a free and unlimited market for the two metals, imposed no restrictions on the use and coinage of either metal, and made all other money in circulation redeemable in either gold or silver. A major problem in the international use of bimetallism was that, with each nation independently setting its own rate of exchange between the two metals, the resulting rates often differed widely from country to country.

      In an attempt to establish the bimetallic system on an international scale, France, Belgium, Italy, and Switzerland formed the Latin Monetary Union in 1865. The union established a mint ratio between the two metals and provided for use of the same standard units and issuance of coins. The system was undermined by the monetary manipulations of Italy and Greece (which had been admitted later) and came to a speedy end with the Franco-German War (1870–71). The future of the bimetallic standard apparently had been sealed at an international monetary conference held in Paris in 1867, when most of the delegates voted for the gold standard.

      Supporters of bimetallism offer three arguments for it: (1) the combination of two metals can provide greater monetary reserves; (2) greater price stability will result from the larger monetary base; and (3) greater ease in the determination and stabilization of exchange rates among countries using gold, silver, or bimetallic standards will result.

      Arguments advanced against bimetallism are: (1) it is practically impossible for a single nation to use such a standard without having international cooperation; (2) such a system is wasteful in that the mining, handling, and coinage of two metals is more costly; (3) because price stability is dependent on more than the type of monetary base, bimetallism does not provide greater stability of prices; and (4) most importantly, bimetallism in effect freezes the ratio of the prices of the two metals without regard to changes in their demand and supply conditions. Such changes can disrupt attempts to maintain the double standard. See also Gresham's law.

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Universalium. 2010.

Look at other dictionaries:

  • Bimetallism — Bi*met al*lism, n. [F. bim[ e]talisme.] The legalized use of two metals (as gold and silver) in the currency of a country, at a fixed relative value; in opposition to monometallism. [1913 Webster] Note: The words bim[ e]tallisme and monom[… …   The Collaborative International Dictionary of English

  • bimetallism — [bī met′ l iz΄əm] n. 1. the use of two metals, usually gold and silver, as the monetary standard, with fixed values in relation to each other 2. the doctrine, actions, or policies supporting this bimetallist n …   English World dictionary

  • Bimetallism — In economics, bimetallism is a monetary standard in which the value of the monetary unit can be expressed as a certain amount of gold or as a certain amount of silver; the ratio between the two metals is fixed by law. In economic history the… …   Wikipedia

  • bimetallism —   n. currency system in which both gold and silver are standard money.    ♦ bimetallic,   a.    ♦ bimetallist, n. advocate of bimetallism.    ♦ bimetallistic, a …   Dictionary of difficult words

  • bimetallism — noun Etymology: French bimétallisme, from bi + métal metal Date: 1876 the use of two metals (as gold and silver) jointly as a monetary standard with both constituting legal tender at a predetermined ratio • bimetallist noun • bimetallistic… …   New Collegiate Dictionary

  • bimetallism — noun The use of a monetary standard based upon two different metals, traditionally gold and silver usually in a fixed ratio of values. See Also: bimetallist …   Wiktionary

  • BIMETALLISM —    the employment of two metals (gold and silver) in the currency of a country as legal tender at a fixed relative value, the ratio usually proposed being 1 to 15½ …   The Nuttall Encyclopaedia

  • bimetallism — bi·met·al·lism || ‚baɪ metÉ™lɪzÉ™m n. use of two metals as money (especially gold and silver) …   English contemporary dictionary

  • bimetallism — [bʌɪ mɛt(ə)lɪz(ə)m] noun historical a system of allowing the unrestricted currency of two metals as legal tender at a fixed ratio to each other. Derivatives bimetallist noun …   English new terms dictionary

  • bimetallism — bi·met·al·lism …   English syllables


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