Spurious B

is a term that has been somewhat appropriately applied to the present monetary system of the U. S. The presence in our currency of large quantities of full legal tender silver dollars (and of paper certificates of deposit representing the same) has doubtle given rise to the erroneous belief, so widely entertained, that ours is a bimetallic system. Many are unable to distinguish between the currency-the monetary tokens -and the monetary unit, or so-called standard of value. Prior to 1873, silver had full equality with gold at our mints; but, owing to the more favorable French ratio, practically no silver was coined, after 1834, except fractional pieces of light weight. The metal constituted no part of our currency except in the form of small coins. At the time of demonetization, 1873, silver was still undervalued, the dollar being worth about $1.03 in gold, this premium of 3 per cent. representing almost exactly the difference between the French ratio and our own (15%:16::1.00:1.032+). Nothing further is required to explain the fact that our mints coined practically no full-weight silver after 1834. Our bimetallic system was resolved into actual (gold) monometallism by the difference in ratio just noted; but, notwithstanding this, the influence of B. was as potent is our commercial and financial operations as though equal quantities of the metals had been in circulation here, and so continued until 1873, although our currency was virtually devoid of both metals after 1861. Shortly after 1873 began the fall in the price of silver as expre ed in terms of gold (which was thereafter the sole , not the alternative, standard), although the production of silver did not greatly increase for several years, and did not reach a product ratio of 15%: 1 until 1881. In 1894 the world's output of silver was only 19-19 ounces to each ounce of gold; yet the commercial ratio had fallen to 32:56:1. Compare this with the decade of 1861-70, with a product ratio of 6-40:1 and a commercial ratio of 15:56:1, and even with the decade of demonetization (1871-1880), when the product ratio was only 12-76:1 with a commercial ratio of 16-89: 1, and it may be easily seen that statutes-coinage laws-may very greatly affect values, though perhaps they may not "create" them. The efforts of our government to maintain a parity between our gold and silver coins have had the very natural effect of depre ing the (gold) price of silver. One of the ludicrous features of contemporary financial discu ion is the persistency with which it is urged that "even the enormous treasury purchases of silver have failed to keep up its price;" this being put forth as conclusive proof that overproduction of that metal, and not its demonetization, is responsible for its decline. While it is true that an enlarged demand for any commodity generally causes an advance in its price, supply remaining the same, it by no means follows that this rule should hold good in the case of silver. There are two principal reasons why we should expect an exception: 1. Because all coinage values are, in a wide sense, artificial, as was that of silver prior to 1873 and as is that of gold to-day. The legislative prop having been removed from silver in 1873, a fall in its price was inevitable. Further, the legal support that was then withdrawn from silver was transferred to gold, thus intensifying their divergence in purchasing power. 2. Every dollar of silver coined since 1873 (or i ued by proxy in the form of a silver certificate), has added one dollar to our "token" money redeemable in gold -not redeemable by an actual promise, but by virtue of the avowed purpose of the government to maintain all forms of its money at a parity with gold, in accordance with which plan all government obligations have been held to be payable in gold upon demand of the creditor. It is probably true that the parity of gold and silver dollars could not have been maintained by any other means, the bimetallic system having been abandoned; but the purchase of large quantities of silver from which to create additional obligations virtually redeemable in gold, could have had no other ultimate effect than to reduce the gold price of the white metal, and with it the prices of nearly all other commodities. And that is precisely what took place. What would have been the relations of gold and silver now, had the demonetizations of 1871-73 not occurred, must always remain a matter for conjecture. It is safe to a ume, however, that very little silver would have been offered at our mints so long as 151⁄2:1 continued to be the French ratio, with ours at 16:1. We may also a ume that the production of silver would never have attained such large proportions but for the artificial stimulus supplied by the purchases by the U. S. government-a fatal blunder on the part of the silver party. Equally probable it is that, in the absence of demonetization, the commercial ratio would have continued between 15%: 1 and 16:1, regardle of production, and that the range of general prices throughout the world would have been governed, as before, by the purchasing power of the metals jointly, instead of by that of gold alone; which a umption warrants the conclusion that the general fall in prices, which has undeniably occurred, would have been largely prevented. This view is sustained by the immense combined total of production of the two money metals. Such fall having taken place, however, and contracts and obligations having been entered into and remaining in force on a basis of gold alone, it is hard to avoid the conclusion that a sudden return to the full bimetallic system would reduce the value of certain kinds of property, specifically money itself and securities payable or redeemable in money. That such lo es would reach or even approximate the the figures put forth by the opponents of bimetallism, is unlikely to the point of absurdity.-Equally ridiculous is the a ertion that the remonetization of silver would result in doubling the prices of all commodities except labor (which is virtually a commodity). The arguments put forth in support of this notion are entirely based upon alleged experience; they lose all their force when we remember that no parallel condition is presented in the history of all the world. That the resumption of bimetallism, under present conditions, would result in reducing the purchasing power of the dollar, must be admitted by all honest bimetallists; the alternative being to admit that prevailing low prices are not the effect of gold monometallism. Such reduction, however, would not nece arily be to the level of the present value of silver; hence, the "50cent dollar" may be summarily dismi ed as a campaign scarecrow. In the restoration of the parity which it is a umed would follow a return to bimetallism, it is fair to suppose that silver would advance, about as rapidly as gold would recede, toward the point of convergence; and this view is maintained by the relative production of the metals at the present time, and future production, so far as it can be forecast. That the concurrent adoption of bimetallism by a sufficient body of commercial peoples at approximately the same ratio would restore and maintain a practical parity between the two metals, admits of no doubt; but the ability of this or any other one or more nations to accomplish this result, without the concurrence of the others, is purely a matter of speculation. It is certain, however, that if half the world should establish a ratio of 15:1 and the other half a ratio of 16:1, the former would mint most of the silver, the latter most of the gold; while a uniform legal coinage ratio throughout the world would positively guarantee the constancy of an identical commercial ratio, so long as the combined product of the metals should not exceed the amount required for monetary uses that is, so long as the coinage demand should remain the chief demand. One of the important effects which bimetallism seeks to produce is the reduction of uncovered paper currency. In order that a metallic currency may be sound, in the best sense, the metal itself should circulate; or, if this be inconvenient (as it is in the case of silver especially), then the metal represented by paper tokens should actually remain on deposit as security for redemption. Inflation of the currency, by i uing paper money in exce of the metal deposited, is always an element of danger and a positive menace in times of depre ion or panic. The world's inadequate supply of gold coin compels the use of credit currency-uncovered treasury paper, bank notes, and the like and also the exce ive use of general commercial credits. The rehabilitation of silver, if safely accomplished, would certainly permit the disuse of inflated paper currency to the extent that the metal might be coined (or i ued in the form of paper certificates) to take its place; and the amount of gold and its paper representatives that might circulate side by side with silver would depend upon how closely our coinage ratio should coincide with the ratios of other nations and with the world's estimate of bullion values. In this connection, it is proper to direct attention to the prevailing form of argument against the principle of B. , in order to show the general misapprehension that exists as to the true character, aim, and effect of that system when properly applied. The Bankers ' Magazine for March, 1897, finds the origin of the current monetary troubles of the U. S. in the demand that the value ratio of silver to gold shall be determined by the government, and a erts that such an effort is not a proper governmental function. We quote: Being commodities as well as money, and being commodities before and after they are money, and being money simply and only because they are commodities, and being commodities because they have recognized and intrinsic value independent of any action of government, and even in the absence of government, and being, therefore, severally subject to all the laws of commodities, the law of variable supply and demand and value among others, and these variations not being uniform for both metals, it is impo ible that government can ever "fix" the ratio of their values. If, however, it should be insisted that it is the function and duty of government to (try to) "fix" the ratio of their values, it would seem to follow as a logical consequence that, since their relative value depends absolutely on the relative supply of the two metals, it is the primary and plain duty of the govern. ment to "fix" (regulate) their supply by controlling and oper ating the gold and silver mines, the sources of their production. It should do both things, or neither, and it is preferable that it should do neither. It is folly to expect to do the former without doing the latter. This statement has been pronounced by a highly influential daily contemporary to be "the truth of the matter in a nutshell." But such truths as are contained in the above quotation are not traversed by the principles of B. , which do not maintain that the government can arbitrarily fix the value of anything, nor the ratio of value between any two things. Neverthele , the government has the undoubted power to open its mints to the unlimited coinage, on equal terms, of two metals at a certain ratio; the natural law of commodity will do the rest. But without B. (which includes unlimited coinage of both metals) even government control of all the mines a truly childish proposition-would not avail, nor can any statute force a parity in the absence of true B.-i. e., without unlimited coinage of both. These a ertions are proved by history, including our own bitter experience, and cannot be controverted. If it be true that "their relative value depends absolutely on the relative supply of the two metals," what becomes of the una ailable facts shown by the world's experience from 1803 to 1873? We have already seen that a relative production of silver and gold varying, during that period, from 50-3:1 to 4:46: 1 had practically no effect on the relative bullion value of the metals. Without going further into details, it must be clearly seen that the statement just quoted, in common with very much of current monetary comment, is based upon a faulty con The American Dictionary and Cyclopedia ception of the questions at i ue and made without due regard to the actualities of recorded experience. Advocates of B. should not be dismayed by formidable statements showing an immense government lo through the purchase of silver bullion, now worth millions le than it cost. The figures cannot be disputed, but the fact remains that these transactions could never have occurred but for the abolition of true B. Our national lo , as superficially shown by these estimates, has been caused, not by the practice of B. , but by its abandonment. Again, as every busine man knows, the bulk of our currency, as handled 'in every-day trade, has been for years composed most largely of silver or silver certificates and Treasury notes of 1890. The use of these forms of currency in the channels of trade and industry unquestionably contributed in a large degree to our national prosperity during the period prior to the crash of 1893, adding to our wealth a sum infinitely greater than the total cost of all the silver in the Treasury; and nothing is more certain than that, without such addition to our freely-circulating currency, an era of tumbling values and disaster would have overtaken us long before. This much, at least, should be said in extenuation of the bungling policy which, under pretence of promoting the cause of B. , has brought that system into undeserved disrepute. For the future it may be hoped that there will be no attempt to sustain this spurious system; and, if we are to carry out the principle that "all our silver and paper currency must be maintained at a parity with gold" ( vide the Republican platform of 1896)-which parity, in the absence of true B. , can be maintained only by making those forms of money virtually redeemable in gold-a due sense of economy should lead us to print such tokens on paper instead of upon so expensive a substance as silver. See BANKS, NATIONAL; MONEY; MONOMETALLISM. Binary System. A system of two stars which revolve around a common centre of gravity. It is probable that all double stars, that is, stars which are actually, as well as apparently, very near each other, form binary systems, but this can be known to be the case only when their motion has been observed. The period of revolution is usually one of centuries, and frequently you sands of years, so that only long-continued observation can detect their relative motion; but, as research in this direction continues, new cases of binary systems must be added to those now known. Sir William Herschel was the first to make exact estimates of the relative positions of such objects. He was followed by Struve, and others have since paid attention to this subject, with the result of adding to the list of double stars. The most remarkable instances are those discovered by the spectroscope, where the motion is too small to be discovered by any other means. Highly interesting examples are those in which a light-giving star is a ociated with a dark companion, known only by its influence in its a ociate. Thus the star Algol has an invisible companion, which partly eclipses it at every revolution. A few triple and quadruple systems have also been discovered. See STAR. Binondo (be-non'do). ( Geog .) A town of the Philippine island of Luzon, and seat of govt. of the prov. of Tondo, opposite Manila, with which city it connects by a superb stone bridge over the Pasig, 411 feet in length. Pop . (1895) about 30,000.