ABSTRACT
The forthcoming expiration of the convention of 23 December 1865, which constituted the Latin Union, and the meeting in Paris of a conference to discuss and decide about the conditions of its prolongation bring me to reconsider a monetary system that I have already exposed very concisely, but explicitly enough for scientists, at the end of a memoir entitled ‘Théorie mathématique du bimétallisme’. This memoir was published in the Journal des économistes, December 1876, May 1881 and October 1882, and reproduced in my Théorie mathématique de la richesse sociale.ii The system consisted of monometallism based on gold, combined with a silver token, distinct from coins for small change, to be introduced into the circulation or withdrawn from it in such a way that the value of the multiple standard would not vary.iii Three elements simultaneously determine the value of the metal that constitutes the money commodity: (1) the utility of this metal as a commodity; (2) its utility as money, in other words, as the ‘desired cash balance’; (3) its total quantity. The increase or the decrease of the first two elementsiv will increase or decrease its value; the increase or the decrease of the third element will decrease or increase its value. Consequently, if one or the other utility were to increase, or if the quantity should decrease, one would have to introduce the special token into the circulation, in order partially to supply the money metal and keep, at the same time, enough metal in the mode of commodity. If one or the other utility were to decrease, or if the quantity should increase, the special token would have to be withdrawn [4] from circulation, in order to leave the money commodity in its place and to avoid too much metal in the form of a commodity. In this way, we shall be able to regulate the variation in value of money. I shall again expose this system, making it in a way more complete, and more accessible. If possible, I shall put its principle beyond
contest. Finally, I shall develop its practical conclusion, applicable to the present circumstances.
