guinea, or above, may have been sufficient to bring the great quantity of gold which hath been coined in these last fifteen years, without any foreign silver.

"Some years ago, the Portugal moedors were received in the West of England at 28s. a piece. Upon notice from the Mint, that they were worth only about 27s. 7d., the Lords Commissioners of the Treasury ordered their receivers of taxes to take them at no more than 27s. 6d. Afterwards, many gentlemen in the West sent up to the Treasury a petition, that the receivers might take them again at 28s., and promised to get returns for money at that rate; alleging, that when they went at 28s., their country was full of gold, which they wanted very much. But the Commissioners of the Treasury, considering that at 28s. the nation would lose 5d. a piece, rejected the petition. And if an advantage of 5d. in the 28s. did pour that money in upon us, much more hath an advantage to the merchant of 91d. in a guinea, or above, been able to bring into the Mint, great quantities of gold, without any foreign silver, and may be able to do so still, till the cause be removed.

"If things be let alone till silver money be a little scarcer, the gold will fall of itself; for people are already backward to give silver for gold, and will in a little time refuse to make payments in silver without a premium, as they do in Spain; and this premium will be an abatement of the value of the gold; and so the question is, whether gold shall be lowered by the Government, or let alone till it falls of itself, by the want of silver money.

"It may be said, that there are great quantities of silver in plate, and if the plate were coined, there would be no want of silver money. But I reckon that silver is safer from exportation in the form of plate than in the form of money, because of the greater value of the silver and fashion together; and, therefore, I am not for coining the plate, till the temptation to export the silver money, which is a profit of 2d. or 3d. an ounce, be diminished; for, as often as men are necessitated to send away money for answering debts abroad, there will be a temptation to send away silver rather than gold, because of the profit, which is almost 4 per cent.; and for the same reason foreigners will choose to send hither their gold rather than their silver."

Mr. Aislabie, the Chancellor of the Exchequer, brought the subject of the great scarcity of silver coin before the House on

the 21st of December, 1717, and was seconded by Mr. Caswall, who gave details of the different relative values gold and silver coin had borne with respect to each other, according to the plenty or scarcity of each, and said that the over-valuation of gold in the current coins of great Britain, had caused the exportation of great quantities of silver specie. To prove this, he laid open a clandestine trade which had been carried on for many years by the Dutch, Hamburghers, and other foreigners, in concert with the Jews and other traders here, which consisted in exporting silver coins, and importing gold in lieu thereof, which being coined into guineas at the Tower, near 15d. was got by every guinea, which amounted to about 5 per cent., and, as these returns might be got five or six times in the year, considerable profits were made by it. In his opinion, the only way of checking this was to lower the price of guineas and other gold specie.

Sir Isaac Newton had shewn that the true value of the guinea, according to the market value of gold and silver at that time, was 20s. 8d. The House, however, did not adopt his recommendation to its full extent, but they addressed the Crown to issue a proclamation to make guineas current at 21s. In accordance with this, the King issued a proclamation on the 22nd December, 1717, making guineas current at 21s., and reducing the other gold coins for 23s. 6d. and 25s. 6d. to 23s. and 25s. each.

This was the last alteration made in the relative values of gold and silver coin, and now, in the language of the Mint, the price of gold was fixed at £3.17s. 101d. an ounce, which is so sore a puzzle to many persons. This alteration in the value of guineas created some alarm that it might be further reduced, and caused considerable confusion in trade, but, in January, 1718, both Houses of Parliament passed resolutions that they would not alter the standard of the gold and silver coins of the kingdom in fineness, weight, or denomination,

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By the reduction of the price of the guinea, the value of gold to silver was fixed at 15 14295 to 1; but, as in Holland and France the rate was 14 to 1, a profit still remained on exporting silver and importing gold. Thus gold became the cheapest medium in which to make payments; and, by this means, during the course of the last century, it became gradually an understood thing in

commerce that gold was the standard of value. was finally adopted as law in 1816.

This custom

We shall not here notice the great Currency Debates in 1811, as that is done in a subsequent chapter. We rejoice to see the great names of Locke and Newton establishing on incontrovertible foundations the great fundamental principles of the coinage, which are now at length happily adopted.

Immediately after the cessation of the war, the Government took in hand the great work of a complete re-coinage. The great principle, so earnestly enforced by Locke, of having only one metal as a standard measure of value, was at length adopted. During the course of the last century merchants had universally adopted the custom of paying their debts in gold, because, from the misrating of the Mint, it was the cheapest medium of payment. All contracts had consequently come to be considered as payable in gold, and this was now adopted as the sole legal tender. At the end of the 18th century the relative value of gold and silver had undergone a perceptible change in the markets of the world. Hence, the valuation that had been made of the two metals in 1717 no longer corresponded to the market value of the two metals, and if a silver coinage has been issued of the former denomination and weight, the very same effects would have followed which had been so often experienced before. It would immediately have disappeared from circulation. In order to guard against this, the power of private persons to have silver coined was taken away, and the pound weight of silver was ordered to be cut into 66 shillings instead of 62. But of these, four are kept back for expenses of coinage, and by way of seignorage, and only 62 are issued, but they are declared to be equal to £3 2s. in tale. The result of this is, that the present shillings pass current for rather more than 6 per cent. above their real value. In order to prevent any injustice to individuals from this depreciation of the coinage, it was enacted, that no tender of payment in silver above 40s. at any one time, should be legal, either by tale or by weight. This arrangement of the English coinage has this great merit, that it allows a very considerable change to take place in the market value of gold and silver without causing any disturbance in the currency. The amazing quantities of gold poured into Europe, greater than had ever before occurred in so short a time, created great

apprehensions in many persons' minds that gold was going to undergo a rapid dimunition in value, similar to what had happened in the 16th century. If this were the case, it would become necessary to consider what should be done with the British coinage. It is not likely that Parliament would ever sanction any alteration in the weight of the measure of value, or in other words, alter the Mint price of gold. If such a diminution in the value of gold should take place, of which there does not appear, as far as can be conjectured on so doubtful a point, any very great likelihood, the probable plan adopted would be to diminish the weight of the shilling to the 70th part of the pound.

On a SEIGNORage.

18. In former times it was customary for the Crown to levy a duty, or profit, on coining, which was called a Seignorage. The actual expense of coining is called Mintage or Brassage. This profit formerly brought in a considerable revenue to the Crown, and accordingly, the coin was frequently called in, and renewed for the sake of the profit.

But by the 18 Car. II., c. 5, the seignorage previously levied was entirely abolished; and it was enacted that whoever brought sterling silver, or standard gold to the Mint should receive back an exactly equal amount in weight of current coin," without any defalcation, diminution, or charge for the assaying, coinage, or waste in coinage," and certain taxes were appropriated for the expenses of the Mint.

This continued to be law until the 56 Geo. III., c. 68, when the great restoration of the coinage took place at the end of the war, when the plan which had been advocated by Sir William Petty, Locke, Harris, and Lord Liverpool was adopted, of making gold alone the standard money, and silver and copper only subsidiary coins.

At the time when the Act of Charles II. was passed, the Mercantile System was at the height of its popularity, and no doubt it was considered of the utmost national advantage to have as much specie as possible in the country. Though gold and silver were equally legal tender, silver was considered as the standard of the country, and the foreign exchanges were always reckoned in the silver coinage. But after 1717, when the

guinea was fixed at 21s., though Sir Isaac Newton shewed that it was only worth 20s. 8d., in consequence of its being so overrated in comparison with silver, the custom became general among merchants to discharge all their debts in gold: and thus gold came to be considered as the standard of the country. All the best silver coins were culled out and exported, and only the worn, clipped, and degraded coins remained in circulation.

The question whether the expenses of coinage should be charged or not, has given rise to much difference of opinion.

Smith shewed' that gold in coin was somewhat more valuable than in bullion in his day, because it was more convenient, and although the coinage was free, yet the bullion which was carried to the Mint could not be returned till after a considerable delay, and this delay was equivalent to a small duty, which rendered gold coin somewhat more valuable than gold bullion.

This delay was so inconvenient to merchants that it was their custom to take their bullion to the Bank of England and sell it to the Bank in exchange for notes. Although the Mint was legally open to any one, yet, practically, the Bank was the only body that had gold bullion coined. The Directors often purchased bullion at £3 17s. 6d. the oz; but the average price they paid for it during the 20 years preceding 1797, was £3 17s. 7 d. the oz., or 2ąd.under the Mint Price; this shewed the sum the merchants were willing to pay for the convenience of having their bullion immediately converted into coin; and was in fact a duty to that amount.

Smith thought that a small seignorage, or duty, upon the coinage of both gold and silver would increase the value of the coin still more above that of bullion. This excess of value of the coin above bullion would prevent the melting down of the coin, and would discourage its exportation. If upon any public exigence it should become necessary to export the coin, the greater part of it would soon return again of its own accord. Abroad it could sell only for its weight in bullion. At home it would buy more than that weight. There would be a profit, therefore, in bringing it home again.

Lord Liverpool, however, whose scheme of coinage, as developed in his Treatise on the Coins of the Realm, was

1 Book i., ch. 5.

Lord Liverpool's Treatise on the Coins of the Realm, 143.

3 Book i., ch. 5.