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This article analyzes the stability of bimetallism for countries operating in integrated bullion markets that enact different legal ratios. I articulate a new theoretical framework to demonstrate that two countries can both be bimetallic only if they coordinate their legal ratios. The theoretical framework is applied to the mid-eighteenth century when London's legal ratio was 3.8 percent higher than that of Amsterdam. I find that Amsterdam was effectively on the bimetallic standard, whereas London was on a de facto gold standard. [ABSTRACT FROM PUBLISHER]

The article provides a reassessment and a restatement of the important properties of gold standards and stresses the role of the Real Bills Doctrine in Federal Reserve policy as the main cause of the Great Contraction of 1929-1933 in the U.S. The author has taken issue with articles and books that have assigned major fault to gold standard for the decline of employment, prices, production, income, and welfare. He also tries to rectify the omissions overlooked in the studies analyzing the Great Contraction. It also demonstrates that the Real Bills Doctrine, not “the” gold standard, was the intellectual and operational basis for the disastrous Fed policy of 1929-1933.