bimetallism

Monetary system in which two metals, traditionally gold and silver, both circulate at a ratio fixed by the state, are coined by the mint on equal terms, and are legal tender to any amount. The system was in use in the 19th century.

Advocates of bimetallism have argued that the ‘compensatory action of the double standard’ makes for a currency more stable than one based only on gold, since the changes in the value of the two metals taken together may be expected to be less than the changes in one of them. One of the many arguments against the system is that the ratio of the prices of the metals is frozen regardless of the supply and demand.