Can You Give Brief History Of BI-metallism?

Bi-metallism was adopted but France in 1803. The two metals gold and silver served will as monetary units at mint ratio of 15.5 oz. of gold till 1850. Due to heavy imports of gold from Australia and California from 1850-1860 the marked ratio between gold and silver began to differ from the mint ratio.

Silver was over valued at the mint. Due to the working of Gresham's law, the export of silver increased. Variation in the mint market ratio thus caused monetary confusion and hampered business activity.

For the smooth running and better functioning of bi-metallism, France, Belgium, Italy, Switzerland formed Latin monetary union in 1866. Romania and Greece also joined later on. Even the monetary union of bi-metallism and finally collapsed in 1874 when the mints were closed for free coinage of silver. The main cause of the failure of the monetary union was the increased output of silver from 1860-1870.

America adopted bi-metallism in1792. The ratio between silver and gold was 15:1. With the discovery of rich deposits of gold in California and Australia, silver was over valued. The market ratio of exchange began to very from the mint ratio which adversely affected the trade of country. America had to abandon bi-metallism in 1900. During the last quarter of the 19th century, an attempt was made by different countries of the world to establish international bi-metallism but that too proved a failure.