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ultimately adopted, was adverse to any charge being made for coining gold, the standard measure of property. He says,' "It is and has long been a dispute among the writers on coins, whether the charge of fabricating coins, and even a seigneurage payable to the Sovereign, should not be taken out of our coins, as is practised in most foreign countries; and many eminent men have differed on this point. I incline to think, that the charge of fabrication should not be taken. from these coins which are the principal measure of property and instrument of commerce; and still less any profit derived from seigneurage payable to the Sovereign.

"Because this principal measure of property would not in such case be perfect.

"Because the merchants of foreign nations who have any commercial intercourse with this country, estimate the value of our coins only according to the intrinsic value of the metal that is in them; so that the British merchant would, in such case, be forced to pay, in his exchanges, a compensation for any defect which might be in these coins; and he must necessarily either raise the price of all merchandise and manufactures sold to foreign nations in proportion or submit to this loss.

"Because no such charge of fabrication has been taken at the British Mint for nearly a century and a half past; and if it were now to be taken, the weight of the new Gold Coins must be diminished, to pay for this fabrication.

"And lastly, because these new Gold Coins would either differ in weight from those now in currency, or, to prevent this evil, the whole of our present gold coins must be taken out of circulation, brought to the Mint, and be recoined."

In accordance with this scheme, the 56 George III., c. 68, which established the present system of our coinage, repealed (s. 1.), the Act of Charles II. permitting every one to have silver bullion coined free at the Mint. It enacted that in future the Pound Troy of standard silver should be coined into 66 shillings, of which 62 shillings should be delivered to the person bringing the bullion, and 4 shillings retained, out of which the expenses of coining should be first deducted, and the remainder should be carried to the Consolidated Fund. Silver coin (s. 12), is not legal tender for any sum above forty shillings.

1 Letter to the King, p. 154.

By s. 11., the gold coin of the Realm is declared to be the only legal tender for payment within the United Kingdom of Great Britain and Ireland.

It was ordered by the Act, that after a date to be named by a Royal Proclamation, all persons might bring their standard silver to be coined at the Mint at the rate above named. But no such proclamation was ever issued, and consequently it is only the Government which now has silver coined, as it may deem necessary for the wants of the public. Silver is coined at a charge of about 6 per cent.; and copper is coined at the rate of £224 per ton, which gives a profit of about 100 per cent.

McCulloch has advocated the imposition of a seignorage on the coinage: but we think that the arguments of Lord Liverpool are correct, and time has greatly added to their strength.

Those who argue in favour of a seignorage, that it would make coin more valuable than bullion, and so discourage the exportation of the coin and encourage its importation, have usually failed to observe that there is already a moderate seignorage on the coinage; for the Bank of England seldom gave more than £3 17s. 6d. an oz. for bullion, which was in fact a seignorage of 44d. per oz. By the Bank Charter Act of 1844, the Bank is obliged to give £3 17s. 9d. per oz., so that there is a seignorage now of 14d. per oz. on coin.

It may seem just, at first, that those who wish to have the convenience of having their bullion converted into coin should pay for this convenience, as for any other manufacture; but we think that broad. general considerations of public policy, at all events, under present circumstances, outweigh such a reason. It must be remembered that all subsisting contracts, public and private, have been entered into on the basis of receiving a definite quantity of gold bullion; to charge therefore, the expense of coinage by taking a certain quantity out of the sovereign would be a distinct fraud upon all public and private creditors, for which they would be entitled to compensation at the hands. of their debtors. Coins in foreign countries are of no more value than bullion; consequently to diminish the weight of the sovereign would disarrange the whole foreign commerce of the country. There are many cases, too, in which it would be impossible to throw the expenses of coining on private

parties. Coin, after being some time in circulation, diminishes in weight by inevitable wear and tear, without any bad practices being resorted to; now it is of the greatest national importance that the coinage should be kept at its full legal standard, and that light coin should be recoined. But how are private persons to be charged with this? Private bankers cannot weigh every sovereign they receive from their customers; but when these bankers pay the light sovereigns they receive in the course of business into the Bank of England, the Bank weighs every single sovereign it receives, and gives the banker credit only for the weight of bullion he pays in. The loss therefore of this light gold now falls on private banking companies. The Bank of England withdraws every single light sovereign paid into it, from circulation, and sends it to be recoined. Now who is to pay the cost of this recoinage? It is quite clear that private persons cannot be charged with it: and therefore the charge must be borne by the public. The fact is, that it is a great national advantage to have the coinage always in the most perfect state, and the nation should pay for it: even though some individual merchants may reap a profit from it. It seems to be very similar in principle to the reasons for which State subventions are given to Ocean Steam Companies to carry the mails. It might be said that those who reap the benefit should pay the cost in the postage of their letters. But it is held that it may be of public advantage that regular and rapid steam communication should be established between different countries, and consequently State subventions are paid to most of the great companies; and individuals reap the benefit of it. So it has been held a matter of public importance to develope the formation of railways by State guarantees, by which the persons who travel by the railway are benefited. For the same reason it is a matter of great public importance to maintain the standard of the coinage, and therefore the expense of coinage should be borne by the nation, even though some individual merchants may profit by it.

OF A DECIMAL COINAGE.

19. We must now consider a question which has excited considerable discussion in recent times, viz.: Whether it is prac

ticable and expedient to decimalize the coinage of England. The great monetary reforms which have taken place on the continent in recent years, and the immense benefits which have followed the unification of the coinages of France, Italy, Belgium and Switzerland, have naturally led many persons of great scientific acquirements to advocate the adoption of a Decimal System of coinage in England; and the assimilation of the coinage of this country to that of the great extent of Europe which has adopted the French system. We have now to consider whether such a system can be introduced into this country; and whether there is any reasonable prospect of a uniform system of coinage being adopted by all nations.

20. A decimal coinage is one consisting of pieces related to each other in the ratio of 10, or some power of 10.

There are three distinct systems of coinage

First. Where the lowest coin of all, or even an imaginary unit below any existing coin is taken, and all other coins are multiples of that unit. That is, where the coinage proceeds exclusively by multiplication.

Secondly. Where some intermediate coin is taken at the unit, and other coins are struck both as multiples and as subdivisions of that unit. That is where the coinage is a combination of multiplication and division.

Thirdly. Where the highest coin of all is taken as the unit, and all others are aliquot parts of that unit. That is, where the coinage proceeds exclusively by sub-division.

21. Now, in the first system it is natural that all accounts should proceed by decimal multiples of the unit. And, therefore, there may be decimal accounts. But that does not necessarily imply a decimal coinage. Thus, from time immemorial, the only coin in China has been the cash, which is the 1000th part of the ounce of silver. This is the only coin in existence, and all sums are expressed as decimal multiples of that unit. This is attended with very great convenience, and calculations are very quickly performed, and travellers tell us of the expertness with which mere children can perform long calculations. But the Chinese have not a decimal coinage, as there are no multiples of the cash.

22. The French coinage is an example of the second system. In that the franc is the unit, and there are both multiples and divisions of the franc. The Napoleon is equal to 20 francs, and there are divisions of the franc according to a decimal system. This coinage is decimal so far as the franc, but not further, as the Napoleon is not decimally related to the franc.

23. The English coinage is an example of the third system. In that the unit is the pound sterling, now a gold coin. And all other coins are aliquot parts of the pound sterling. The English coinage, therefore, proceeds exclusively by sub-division.

24. Now, the decimal system of accounts having been applied with great success to the first system; and a decimal system of accounts and coins having been adopted with more or less success in the second system; a pretty strong feeling has been excited, especially among scientific men, to apply the decimal system to the English coinage. That is, to make the different pieces of the coinage related to each other in a decimal ratio.

25. At first sight such a scheme appears to have a great many advantages. It is much easier to cast up accounts decimally, than by our present plan. And it seems a very plausible thing to say, that as the integers proceed on the denary scale, so should the subdivisions. That is, if it be multiplied decimally, why should it not be divided decimally?

26. This idea, however plausible it may seem, is utterly erroneous. It is founded on the idea that integers expressed in the denary scale and decimal fractions are correlative systems. People see the figures on one side of the decimal point increase by powers of 10, and on the other decrease by powers of 10, and they jump at the conclusion that they proceed on the same principles. Nevertheless this is an entire fallacy, and it is quite easy to shew it. Thus, if we multiply 1 by 3', we have 3 an exact answer; but if we divide 1 by 3, do we have 3 an exact answer? If we multiply 1 by 2, we have 2; but if we divide 1. by 2, we have not 2, but 5. Which shews at once that decimal fractions are different in principle from multiplication of integers.

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