Bimetalism

As Bimetallismus or double standard - in contrast to Monometallismus - refers to a monetary system whose unit Kurantmünzen of gold and also to those made of silver , rare on a fixed ratio between silver and copper coins, is based. Since the unit is tied to the value of two precious metals at the same time, their mutual relationship is fixed. A short time existed in Russia of the 19th century, a Trimetallismus with platinum . In parallel to a bimetallic currency , banknotes and coins can be issued. These are not covered by the material value and can be provided with a compulsory exchange rate, which can cause course shifts between the different types of money.

history

A juxtaposition of currency coins made of gold and silver in payment transactions is not uncommon. In Prussia in the 18th and early 19th centuries, for example, the more valuable payments, mostly payments to foreign countries for high-quality goods such as luxury items, were often made with golden Friedrich d'or and the usual domestic payments were made with silver thalers . There was no legally fixed rate between gold and silver or Friedrich d'or and Prussian talers.

The basis of bimetalism is the contractual or legal stipulation of a fixed value ratio between the coinage metals used within a country. Such a fixation in all or at least in the financially strongest countries of a currency union meant bimetallism. In France (from 1803) and later in the Latin Monetary Union (from 1865) this ratio was fixed at 15.5 (1 g of gold had the same value as 15.5 g of silver).

In the Latin Monetary Union, bimetallism was expressed in the fact that the fine weights of two silver 5-franc pieces and one gold 10-franc piece ( gold francs ) were 15.5 to 1 (around 1870). In Germany, too, there was a “legally mandated bimetallism” until 1907, when the simple silver Zollvereinstaler was used as a Kurant coin alongside gold coins. The Zollvereinstaler was the defining denomination of the predecessor currency of the mark. The situation that existed until 1907 is known as the "limping gold standard".

As a result of the Sherman Silver Purchase Act , the US dollar was also officially a bimetallic currency.

A double currency was also practiced with coins from the late medieval penny period of the Wettins . It consisted of Oberwährgroschen ( Judenkopfgroschen ), a hard currency that u. a. was created for foreign trade, while the Beiwahr was used for general monetary transactions. The currency, weakened as a result, had to be clearly structured and thus stabilized by another coin reform with completely new groschen ( horn groschen) and groschen half the value of the horn groschen.

Problems

Rich silver finds at the end of the 19th century caused the price of silver to drop. As a result, numerous countries with bimetallic currencies turned to the gold standard , including the USA.

A permanent establishment of a stable value relationship is economically unrealistic. Two or more different metals, goods, goods or services cannot be produced at the same prices over a longer period of time, since the economic framework conditions are constantly changing and demand and fashion are also changing. This leads to the higher valued metal flowing into private accumulation or abroad - if there is a choice of payment method when paying ( Gresham's law ). Nevertheless, the example of France from 1803 to the 1870s shows that bimetallism can permanently stabilize the value ratio between silver and gold on the world market in a sufficiently large country (at that time also during the gold rush period from 1849).

The weaknesses of the new gold standard became apparent during the 1870s when the price of silver began to decline . Proponents of bimetallism like Henri Cernuschi called for the (re-) introduction of bimetallism in other countries, which the silver mining industry was very interested in. Countries that had a currency based on the gold standard and feared a devaluation offered resistance. The introduction of a fixed value ratio between gold and silver was rejected at the international coin conferences in Paris in 1878 and 1881.

Others

The dynamic value ratio between silver and gold fluctuated between 1 in 45 and 1 in 90 in 2009.

The term should not be confused with bimetal , which changes shape when temperature changes. It also has nothing to do with bimetal coins , which consist of two different metals or alloys, such as the 1 and 2 euro coins .

literature

• Helmut Kahnt, Bernd Knorr: Old measures, coins and weights. A lexicon. Bibliographisches Institut, Leipzig 1986, licensed edition Mannheim / Vienna / Zurich 1987, ISBN 3-411-02148-9 , p. 383.

Individual evidence

1. ↑ A limping currency is a currency system in which two metals (mostly gold and silver) were legal tender. See Helmut Kahnt, Bernd Knorr: Old measures, coins and weights. A lexicon. Bibliographisches Institut, Leipzig 1986, licensed edition Mannheim / Vienna / Zurich 1987, ISBN 3-411-02148-9 , p. 385.
2. ↑ Walther Haupt: Sächsische Münzkunde (1974), p. 70
3. ↑ Walther Haupt: Sächsische Münzkunde (1974), p. 84
4. ↑ Klaus W. Epstein commented on the discussion at the end of the 19th century: "[The] bimetallic system has long been exposed as a peculiar mixture of propaganda by silver producers and primitive economic doctrine of salvation." Klaus Epstein, review of Heinz Gollwitzer: The Yellow Danger. History of a catchphrase, Göttingen 1962. In: Historische Zeitschrift 198, 1964, pp. 145–147.
5. ^ Past Historical London Fix. January 2008 to December 2008 . On: kitco.com ; last accessed on March 19, 2013.