Alterations of the Standard Money

Section 6: Why Money is neither a Sign nor a Measure

adulterated coin, that he again may pay over at the same rate as he receives it, than to curtail his claim by ¼, ½, or in any other proportion. Let us see how the two methods differ. Money would be a mere sign or representative, had it no in- trinsic value of its own; but, on the contrary, whenever it is employed in sale or purchase, its intrinsic value alone is con- sidered. When an article is sold for a dollar piece, it is not the impression or the name that is given or taken in exchange, but the quantity of silver that is known to be contained in it. As a proof of the truth of this position, if the government were to issue crown pieces made of tin or pewter, they would not be worth so much as those of silver. Though declared by law to be of equal value, a great many more of them would be required in purchase of the same commodities; which would not happen if they were nothing but a mere sign.

In either case, the creditor is equally a loser in all his purchases posterior to the bankruptcy. Whether his income be abridged by one-half, or whether he find himself obliged to pay for every thing twice as dear as before, is to him pre- cisely the same thing.

As to all his own existing debts, he may undoubtedly get rid of them on the same terms as the public has discharged his own claim; but what ground is there for supposing, that the public creditors are always in arrear in their private accounts with the rest of the community?

They stand in the same relation to society as all other classes; and there is every reason to believe that the public creditors have as much owing to them by one set of individuals as they owe themselves to an- other; in short, that the accounts will square.

Thus, the injustice they do to their private claimants is balanced by the injury they receive; and a bankruptcy, in the shape of a deterioration of the coin, is to them full as bad, as in any other shape. Violence, ingenuity, or extraordinary political circumstances have sometimes kept up the current value of a money, after a reduction of its intrinsic value; but not for any length of time. Personal inter. est very soon finds out whether more value is paid than is received, and contrives some expedient to avoid the loss of an unequal and unfair exchange. Even when the absolute necessity of finding some medium of circulation of value obliges a government to invest with value an agent des- titute either of intrinsic value or substantial guarantee, the value attached to the sign by this demand for a medium, is actual value, originating in utility, and makes it a substantive object of traffic. A Bank of England note, during the suspen- sion of cash payments, was of no value whatever as a repre- sentative; for it then really represented nothing, and was a mere promise without security, given by the bank, which had advanced it to the government without any security; yet this note, by its mere utility, was possessed of positive value in England, as a piece of gold or silver.

But it is attended with other serious evils, destructive of national welfare and prosperity.

It occasions a violent dislocation of the money-prices of commodities, operating in a thousand different ways, according to the particular circumstances of each respectively, and thereby disconcerting the best planned and most useful specu- lations, and destroying all confidence between lender and borrower.

Nobody will willingly lend when he runs the risk of receiving a less sum than he has advanced. Nor will any one be in a hurry to borrow, if he is in danger of paying more than he gets.

Capital is, consequently, diverted from produc- tive investment, and the blow given to production by deterio- ration of the coin, is commonly followed up by the still more fatal ones of taxation upon commodities, and the establish- ment of a maximum of price.

But a bank-note, payable on demand, is the representative, the sign, 268 of the silver or specie, which may be had when- ever it is wanted, on presenting the note. The money or specie, which the bank gives for it is not the representative, but the thing represented.

Nor is the effect less serious in respect to national morality. People’s ideas of value are kept in a state of confusion for a length of time, during which knavery has an advantage over honest simplicity, in the conduct of pecuniary matters. More- over, robbery and spoliation are sanctioned by public prac- tice and example; personal interest is set in opposition to in- tegrity; and the voice of the law to the impulse of conscience. When a man sells any commodity, he exchanges it, not for a sign or representative, but for another commodity called money, which he supposes to possess a value equal to the value sold. When he buys, he does so, not with a sign or rep- resentative, but with a commodity of real, substantial value, equivalent to the value received. A radical error, in this particular, has given rise to another of very general prevalence. Money having been pronounced to be the sign of all values whatever, it was boldly inferred, that, in every country, the total value of the money, bank and other notes, and credit paper, is equal to the total value of all other a sack of wheat, than it can make a sack of wheat worth noth- ing, by ordering it to be given for nothing.

commodities. A position that derives some show of plausi- bility, from the circumstance, that the relative value of money declines when its quantity is increased, and advances when that quantity is diminished.

A yard or a foot is a real measure of length; it always presents to the mind the idea of the self-same degree of length. No matter in what part of the world a man may be, he is quite sure, that a man of 6 feet high in one place is as tall as a man 6 feet high in another. When I am told that the great pyramid of Ghaize is 656 feet square at the base, I can measure a space of 656 feet square at Paris, or elsewhere, and form an exact notion of the space the pyramid will cover; but when I am told that a camel is at Cairo worth 50 sequins, that is to say, about 90 ounces of silver, or 100 dollars in coin, I can form no precise notion of the value of the camel; because, although I may have every reason to believe that 100 dollars are worth less at Paris than at Cairo, I can not tell what may be the difference of value.

It is obvious, however, that the same fluctuation affects all other commodities whatever. If the vintage be twice as pro- ductive one year as it is another year, the price of wine falls to half what it was the year preceding. In like manner, one may readily concede, that, should the aggregate of circulating specie be doubled, the prices of all goods would be doubled also; in other words, twice the quantity of specie would go to the purchase of the same articles. But this consequence by no means proves, that the total value of the circulating medium is always equal to the sum total of all the other items of wealth, any more, than that the sum total of the produce of the vin- tage is equal to the totality of other values. The casual fluc- tuation in the value of silver and of wine, in the cases sup- posed, is the effect of a difference in quantity of these respec- tive commodities at two different times, and has nothing to do with the quantity of other commodities.

The utmost, therefore, that can be done is, merely to estimate or reckon the relative value of commodities; in other words, to declare, that at a given time and place, one commodity is worth more or less than another; their positive value it is im- possible to determine. A house may be said to be worth 4000 dollars; but what idea does that sum present to the mind? The idea of whatever I can purchase with it; which is, in fact, as much as to say, the idea of value equivalent to the house, and not of value of any fixed degree of intensity, or independent of comparison between one commodity and another. It has been already remarked, that the total value of the money of any country, even with the addition to the value of all the precious metals contained in the nation under any other shape, is but an atom, compared with the gross amount of other val- ues. Wherefore, the thing represented would exceed in value the representative; and the latter could not command the pres- ence or possession of the former. 269 When two objects of unequal value are both compared to different portions of one specific product, still it is a mere estimate of relative value. One house is said to be worth 4000 dollars, another 2000 dollars; which is simply saying, the former is worth two of the latter. It is true, that, when both are compared to a product capable of separation into equal por- tions, as money is, a more accurate idea can be formed of the relative value of one to the other; for the mind has no diffi- culty in conceiving the relation of 2 integers to 1, or 4000 to 2000. But any attempt to form an abstract notion of the value of one of these integers must be abortive.

Nor is the position of Montesquieu, that money-price depends upon the relative quantity of the total commodities to that of the total money of the nation 270 at all better founded. What do sellers and buyers know of the existence of any other com- modities, but those that are the objects of their dealing? And what difference could such knowledge make in the demand and supply in respect to those particular commodities? These opinions have originated in the ignorance at once of fact and of principle.

Money or specie has with more plausibility, but in reality with no better ground of truth, been pronounced to be a measure of value. Value may be estimated in the way of price; but it can not be measured, that is to say, compared with a known and invariable measure of intensity, for no such measure has yet been discovered.

If this be all that is meant by the term, measure of value, I admit that money is such a measure; but so, it should be ob- served, is every other divisible commodity, though not em- ployed in the character of money. The ratio of the one house to the other will be equally intelligible, if one be said to be worth 1000, and the other only 500, quarters of wheat. Authority, however absolute, can never succeed in fixing the general ratio of value. It may enact, that John, the owner of a sack of wheat, shall give it to Richard for 4 dollars; and so it may that John shall give his sack of wheat for nothing. This enactment will probably rob John to benefit Richard; but it can no more make 4 dollars the exact measure of the value of Nor will this measure of relative value, if we may so call it, convey an accurate idea of the ratio of two commodities one to the other, at any considerable distance of time or place. The 1000 quarters of wheat, or 4000 dollars, will not be of any use in the comparison of a house in former, with a house

which purchases them. At all times and places, that is dear, which it is difficult to come at, or which it costs much labour to acquire; and that cheap, which is to be had easily, or with very little labour. Labour alone, therefore, never varying in its own value, is alone the ultimate and real standard, by which the value of all commodities can at all times and places be estimated and compared.” 272

in the present times, for the value of silver coin and of wheat have both varied in the interim. A house at Paris, worth 10,000 crowns in he. days of Henry IV, would now be worth a great deal more, than another of that value now-a-days. So, like- wise, one in Lower Britany, worth 4000 dollars, is of much more value than one of that price at Paris; for the same rea- son that an income of 2000 dollars is a much larger one in Britany than at Paris. With great deference to so able a writer, it by no means fol- lows, that, because labour in the same degree is always to the labourer himself of the same value, therefore it must always bear the same value as an object of exchange. Labour, like commodities, may vary in the supply and demand; and its value, like value in general is determined by the mutual ac- cord of the adverse interests of buyer and seller, and fluctu- ates accordingly.

Wherefore it is impossible to succeed in comparing the wealth of different eras or different nations. This, in political economy, like squaring the circle in mathematics, is imprac- ticable, for want of a common mean or measure to go by. Silver, and coin too, whatever be its material, is a commod- ity, whose value is arbitrary and variable, like that of com- modities in general, and is regulated in every bargain by the mutual accord of the buyer and seller. Silver is more valuable when it will purchase a large quantity of commodities, than when it will purchase a smaller quantity. It can not, therefore, serve as a measure, the first requisite of which is invariabil- ity. Thus, in the assertion of Montesquieu, when speaking of money, that “what is the common measure of all things, should of all things be the least subject to change,” 271 there are no less than three errors in two lines. For, in the first place, it has never been pretended, that money is the measure of all things, but merely that it is the measure of values; secondly, it is not even the measure of values; and lastly, its value can not be made invariable. If it was the object of Montesquieu to deter governments from altering the standard of their coin, he should have laboured to enforce those sound arguments, which the question would fairly have supplied him with, instead of deal- ing in brilliant expressions, which serve to mislead and give currency to error.

The value of labour is affected materially by its quality. The labour of a strong and intelligent person is worth much more than that of a weak and ignorant one. Again, labour is more valuable in a thriving community, where there is a lively de- mand for it, than in a country overloaded with population. In the United States, the daily wages of an artificer amount in silver to three times as much as in France. 273 Are we to infer, that silver has then but 1/3 of its value in France? The artifi- cer is there better fed, better clothed, and better lodged; which is a convincing proof, that he is really better paid. Labour is probably one of the most fluctuating of values, because at times it is in great request, and at others is offered with that distressing importunity occasionally witnessed in cities where industry is on the decline.

Its value has, therefore, no better title to act as a measure of two values at great distances of time or place, than that of any other commodity. There is, in fact, no such thing as a mea- sure of value, because there is nothing possessed of the indis- pensable requisite, invariability of value.

It would, however, often be a matter of curiosity, and some- times even of utility, to be able to compare two values at an interval of time or place; as, for instance, when there is occa- sion to stipulate for a payment at a distant place, or a rent for a long prospective term.

In the absence of an exact measure, we must be content to approximate to accuracy; and, to this end, many commodi- ties of well known value will serve to give a notion, more or less correct, of the value of any specific product. At the same point of time and place, there is little difficulty in the ap- proximation= the value of any given article may be readily measured by almost all others. To ascertain pretty nearly the value of an article amongst the ancients, we must find out some article which there is reason to think has subsequently undergone little change of value, and then compare the quan- tity of that article given by the ancients and moderns respec- tively, in exchange for the article in question. Wherefore, silk would be a bad object of comparison; because it was, in the time of Caesar, procurable from China only, at a most ex- travagant expense, and, being then nowhere produced in Eu- Smith recommends the value of labour as a less variable, and, consequently, more appropriate, measure of absent or distant value; he reasons thus upon the matter= “Equal quantities of labour, at all times and places, may be said to be of equal value to the labourer. In his ordinary state of health, strength, and spirits, in the ordinary degree of his skill and dexterity, he must always lay down the same portion of his ease, his liberty, and his happiness. The price, which he pays, must always be the same, whatever may be the quantity of goods which he receives in return for it. Of them, indeed, it may sometimes purchase a greater and sometimes a smaller quan- tity; but it is their value which varies, not that of the labour 103Jean-Baptise Say, A Treatise on Political Economy rope, must of course have been much dearer than at present. Is there any commodity that has varied less in the intervening period? and, if there be any such, how much of it was then given for an ounce of silk? These are the two points we must inquire into. If any one article can be discovered, that was produced with equal ease and perfection at the two periods, and the consumption of which had a natural tendency to keep pace with its abundance, this article would probably have varied little in value and may be taken as a tolerable measure of other values. valuable in India, than wheat is in this part of the world; for, besides that the cultivation is less expensive, it yields two crops in the year. This is one reason, why labour is so cheap in India and China.

The article of food in most general use is, therefore, but a bad measure of value at great distances of place. Nor are the pre- cious metals by any means a correct one= their value is indu- bitably not so great in North America and the West Indies, as in Europe, and much greater in every part of Asia, as the constant efflux of specie thither sufficiently proves. Yet the frequency of communication between these different parts of the world, and the facility of transport, give us reason to sup- pose them the least liable to fluctuation of value on their pas- sage from one climate to another.

Ever since the earliest times recorded in history, wheat has been the staple food of the great mass of the population, in all the principal nations of Europe; consequently, their relative population must have been influenced by the abundance or scarcity of this article of food, more than of any other= the ratio of the demand to the supply must have been, therefore, at all times nearly the same. There is, besides, no product which I know of, that has undergone less alteration ill the course of production. The agricultural skill of the ancients was in most respects equal, and in some, perhaps, superior to our own. Capital, indeed, was dearer amongst them; but that difference was little felt; for, in ancient times, the proprietor was commonly both farmer and capitalist; and the capital embarked in agriculture yielded less return than other invest- ments; because, as more honour was attached to this, than to the other branches of industry, commerce and manufacture, the influx of capital, as well as of labour, into that channel, was greater than into the other two. And, during the middle ages, in spite of the general declension of all the arts, the tiliage of arable land was prosecuted with a skill little infe- rior to that of the present day.

There is happily no necessity, for the purposes of commerce, to compare the relative value of goods and of metals in two distant parts of the world; it is quite enough to know their relation to other commodities in each country. When a mer- chant remits to China half an ounce of silver, it is of little importance to him, whether it has more relative value in China than in Europe. All he wants to know is, whether he can buy with it at Canton a pound of tea of a certain quality, which he can re-sell in Europe, say for two ounces of silver. With these data, and in expectation of receiving, at the close of the specu- lation, a gross profit of an ounce and a half of silver, he calcu- lates whether that profit will leave him a sufficient net profit, after covering the charges and risk out and home; and this is all he cares about. If, instead of bullion, he remit goods, it is enough for him to know; 1. The relation between the value of these goods and silver in Europe; that is to say, how much they will cost; 2. The relation between their value and that of Chinese products at Canton; that is to say, what he can get in exchange for them; and, lastly, the relation between these lat- ter and silver in Europe; that is to say, what they will be worth when imported. It is evident that every repetition of this op- eration brings into question nothing more than the relative value of two or more articles at the same time, and at the same place.

Whence I infer, that the same quantity of wheat must have borne nearly the same value among the ancients, during the middle ages and at the present time. But, as there has all along been a vast difference in the produce of the harvest in one year and another, grain being sometimes so abundant, as to sell extremely low, and at other times so scarce, as to occa- sion famine, the value of grain must be taken on an average of years, whenever it is made the basis of any calculation. For the common purposes of life, or, in other words, when nothing more is requisite, than to compare the value of two objects, at no great distance of time or place, most commodi- ties possessed of any value at all may serve as a measure; and if, in describing the value of an object, even where there is no question of either buying or selling, the estimation is more generally made in the precious metals, or in money, than in any other commodity; it is simply, because its value is more generally known, than that of other commodities. 274 But, in all bargains for a long prospective period, as for the reserva- tion of a perpetual rent, it is more advisable to reckon in wheat: for the discovery of a single mine might perhaps greatly re- So much for the estimation of values at distant periods of time.

There is equal difficulty in the estimation at great distances of place. The staple articles of national food, which, as such, maintain the greatest uniformity in the ratio of the demand and supply, are very different in different climates. In Eu- rope, wheat is he staple; in Asia, it is rice= the relative value of neither the one nor the other in Asia and Europe is toler- ably steady; nor has the value of rice in Asia any relation to the value of wheat in Europe. Rice is beyond question less

age at the two different periods, of pure silver to wheat, which we will take as one of the least variable. duce the present value of silver; whereas the tillage of all North America could not sensibly alter the value of wheat in Europe= for the number of mouths to be fed in America, would increase almost in the ratio of the improved cultivation. But long prospective stipulations regarding value must unavoid- ably, under any circumstances, be very precarious, and can never give any certain notion of the value that is likely to be received. Perhaps the most improvident course of all is, to stipulate for a particular denomination of money; for the same denomination may be fixed to any variation of weight or qual- ity whatever; and the contracting party may find he has bar- gained for a name, rather than a value, and that he runs the risk of paying, or being paid, in mere words.

Dupre of St. Maur, whose book 277 is an ample repository of learned information upon the value of commodities, gives it as his opinion, that, from the reign of Philip Augustus, who died A. D. 1223, until about the year 1520, the setier of wheat (Paris measure) was worth, on the average, as much as 1-9 of a mark of fine silver; i.e., about 512 grains weight. About the year 1536, when the mark of silver was of the value of 13 livres tournois, or rather passed under the denomina- tion of 13 livres tournois, the ordinary price of a setier of wheat was about 3 livres tournois, i.e., 3-13 of a mark of fine silver, amounting to 1063 grains weight of that metal. In 1602, under the reign of Henry IV., the mark of fine silver being at that time equal to 22 livres, the average price of the setier of wheat was 9 liv. 16s. 9d.; i. e. 2060 grains of fine silver. 278 I have dwelt thus long upon the refutation of incorrect ex- pressions, because they appear to have acquired too general a circulation, 275 and because they often confirm people in false notions and ideas which ideas sometimes serve as the basis of erroneous systems, that in their turn give birth to conduct equally erroneous.

Since that period, the setier of wheat has, one year with an- other, been constantly worth about the same weight of silver. In 1789, when the mark was equivalent to 54 liv. 19s. the average price of wheat was, according to Lavoisier, 241iv. the setier, i.e., 2012 grains of fine silver. I have not reckoned the fractions of grains, for in these matters it is enough to approximate to accuracy; indeed the price of the setier, taken at the average of Paris and the environs, is itself but loosely calculated.

Section 7= A Peculiarity that should be attended to, in estimating the Sums mentioned in History. In reducing the money of former ages into money of the present day, the best informed historians have contented them- selves with converting the actual quantity of gold and silver, designated by the term made use of by the authority cited, into the current money of their own times. But this is not enough= the actual sum, the real amount of the metal, can give no correct notion of its then value, which is the very point we want to arrive at. It is, therefore, necessary to reckon, besides, the fluctuations of value that the metal itself has un- dergone.

The result of this comparative statement is, that the setier of wheat, whose relative value to other commodities has varied little front 1520 down to the present time, has undergone great fluctuations, being worth, A. D. 1520 1536 1602 1789 512 gr. of pure silver. 1063 do. do. 2060 do. do. 2012 do. do.

A few examples will best explain my meaning: Voltaire tells us, in his Essay on Universal History, 276 that Charles V enacted, that the sons of France should have an annual revenue settled on them of 12,000 livres= and, as he reckons this sum to be equal to 100,000 livres of the present day, he naturally enough observes, that this was no great pro- vision for the sons of the monarch. But let us examine the grounds for this calculation of Voltaire. First, he reckons that the mark of fine silver was, in the time of Charles V, worth about 6 livres; at this rate, 12,000 livres will make 2000 marks of silver, which, at their relative value at the date of Voltaire’s writing, would in fact amount to 100,000 livres, or thereabouts. But 2000 marks of fine silver were worth in the reign of Charles V much more than in the reign of Louis XV. Of this we shall be convinced, by a comparison of the relative aver- which shows that the value of pure silver must have varied considerably since the first of these dates; inasmuch as on every act of exchange, four times as much of it must now be given for the same quantity of commodities, as was given three centuries ago. We shall see by-and-by, 279 why the dis- covery of the American mines, and the influx into the market of about ten times as much silver as before, has operated to reduce its value only in the ratio of 4 to 1.

Now to the application of this information to the royal sti- pend in question= if pure silver was worth in the time of Charles V four times as much as in the age of Voltaire, the settlement of 2000 marks upon the sons of France was equivalent to 105Jean-Baptise Say, A Treatise on Political Economy 8000 marks at the present, that is to say, more than 400,000 fr. of our present currency, or about 75,000 dollars; which makes the observations of Voltaire upon the inadequacy of the provision much less applicable. and taking the standard of quality to have been the same. Wherefore, the sum appropriated by the usurper amounted to 33,446,081 fr. (6,232,971 dollars,) of our money; which is greatly above Vertot’s estimate of about 3 millions only. Raynal, though he wrote avowedly upon commercial mat- ters, has committed a similar error, in estimating the public revenue in the reign of Louis XII at 36 millions of our present money (francs) on the ground, that it amounted to 7,650,000 liv. of 11 liv. to the mark of silver. The sum, indeed, was equal to 695,454 marks of silver= but it would not be enough merely to reduce the mark into livres of the present day; for the same quantity of silver was then worth four times as much as it is now; so that, before reducing them into modern money, they should be multiplied by four, which will swell the public revenue under Louis XII to a sum of 144 millions of francs of present currency, or nearly 27 millions of dollars. From this specimen we may judge, how little reliance can be placed on the calculations of other historians, of less infor- mation and accuracy than those I have been quoting. Rollin, in his Ancient, and Fleury, in his Ecclesiastical History, have reckoned the talentum, mina and sestertius, according to the scale made out by some learned persons, under the adminis- tration of Colbert. This scale is liable to many objections= 1. It establishes upon very questionable data, the respective quantities of the precious metals contained in the coins of the ancients, which is a primary source of error= 2. The value of the precious metals has considerably varied, between the pe- riod of antiquity in question and the ministry of Colbert, which is another source of error= 3. The scale of reduction, drawn up under the direction of that minister, was calculated at the rate of 26 liv. 10 sous, to the mark of silver, being the then mint price of silver bullion; but this rate was altered before the days of Rollin, which is a third source of error. Lastly, since the date of his publication, that rate has been still fur- ther altered, and a livres tournois, conveys to us the idea of a smaller quantity of silver, than it did in his time; and this is a fourth source of error. Thus, whoever now takes up that work, relying on the calculations therein contained, will entertain a most erroneous idea of the income and expenditure of the states of antiquity, as well as of their commerce, their re- sources, and every part of their system and organization. Again, we read in Suetonius, that Caesar made Servilius a present of a pearl worth 6 millions of sestertii, which his trans- lators, La Harpe and Levesque, estimate to be equal to 1,200,000 fr. present money. But a little lower down, we find, that Caesar, on his return to Italy, disposed of the gold bul- lion, accruing from the plunder of Gaul, for coin, at the rate of 3000 sestertii to the pound of gold; which shows the pearl of Servilius to have been much under-rated.

The Roman pound, according to Le Blanc, weighed 102 of our ounces; and 103 oz. of gold in Cesar’s time, were worth as much as 32 ounces of that metal at the present day, for it may reason- ably be reckoned, that the value of gold has fallen in the ratio of 3 to 1. 280 Now 32 oz. of gold are worth nearly 3036 fr. which may therefore be looked upon as about the real value of 3000 sestertii; at which rate the pearl in question must have been worth 6,072,000 fit. (1,129,392 dollars,) and the Ro- man sestertius, somewhat more than a franc of our money; which is greatly beyond the ordinary estimate. 281

Not that I would be understood to say, that a writer of history wan ever have sufficient data, to give his readers, in all cases, a correct notion of values in general; but, for the sake of a closer approximation to accuracy, than has hitherto been ef- fected, in reducing the sums of ancient times, and even of the middle ages, into modern money, I would recommend, what indeed is generally done, first, to inquire from those learned in antiquity, the actual weight of precious metal contained in the coin in question= secondly, as far back as the Emperor Charles V, that is to say, about the year 1520, that quantity, if gold, must be multiplied by 3 only, and if silver, by 4= 283 be- cause the discovery of the American mines has occasioned a fall in nearly that proportion= and lastly, to reduce that quan- tity of gold or silver into the current money of the period, at which he may happen to be writing.

When Caesar laid hands upon the public treasures of Rome. in spite of the opposition of the tribune Metellus, he is stated to have found them to consist of 4130 lbs. of gold, and 80,000 lbs. of silver; which Vertot estimates to have amounted to 2,911,100 liv. tournis but upon what grounds I am at a loss to imagine. To form a tolerably correct notion of the treasure seized by Caesar upon his usurpation, the 4130 lbs. of gold should be reduced into oz. of the French standard, at the rate of 10 2/3 oz. to the Roman lb. 282 which makes 44,052 oz. But, as the same weight of gold was then worth three times as much as at present, the value will appear to have been 132,156 oz. or 12,530,346 fr. (2,330,644 dollars,) supposing the stan- dard of quality in the gold to have been the same as at present. The 80,000 lbs. weight of silver also were then worth as much as 320,000 lbs. at the present period, i.e., 20,915,735 fr., (3,890,327 dollars,) reckoning the Roman lb. at 10 2/3 oz. From the year 1520 downwards, the value of silver progres- sively declined until the latter end of the reign of Henry IV, that is to say, towards the beginning of the seventeenth cen- tury. We may judge of the depression of its value by the in- creasing price of any given commodity, in the manner ex- plained in the preceding section. To acquire a correct notion

tive value of the two metals to other commodities has, in fact, been constantly fluctuating, as well as the relative value of the metals themselves, when exchanged one for the other. Before the re-coinage of gold, in pursuance of the arret of 13th October, 1785, the louis d’or was commonly sold for 25 liv. and some sous of the silver coin. Consequently, people took good care not to pay in gold coin the sums bargained for in silver; otherwise they would really have paid 25 liv. and 8 or 10 sous, for every 24 liv. of the sums stipulated. of the value of the mark of silver during this period, it will be necessary to allow for a diminution in the ratio of the increased real, that is, metal, and not nominal or coin, price of com- modities in general, or of any one, as wheat, for instance, in particular.

From the beginning of the seventeenth century, there will be no occasion for any further allowance, after having reduced the money of the time being into marks of silver; for there does not appear to have been any further sensible decline in the value of silver, since most commodities have been pro- curable for the same metal-price. It will be sufficient, there- fore, to reduce them into the money current for the time be- ing, according to the then current value of the mark of fine silver. 284

Since the re-coinage in 1785, when the quantity of gold in the louis d’or was reduced by one-sixth, its value has nearly kept pace with that of 24 liv. in silver; so that gold and silver have been paid indifferently. However, it has still continued most customary to pay in silver, partly from long habit, and partly because the gold coin, being more liable to be clipped or counterfeited, was received with more caution and liable to more frequent cavils about the weight and quality. By way of illustration, let us take the statement we find in the Memoirs de Sully, viz., that this minister accumulated, in the vaults of the Bastile, a sum of 36 millions of livres tournois, to further the designs of his master against the house of Aus- tria. If we wish to know the actual value of that hoard, we must, in the first place, examine what weight of fine silver it amounted to. The mark of fine silver was then represented by 22 livres tournois; consequently 36 millions of livres make 1,636,363 marks, 5 oz. of silver. There has been no sensible variation in the value of that metal since the period in ques- tion; for the same quantity of metal would then buy the same quantity of wheat as at present. Now, at the present time, 1,636,363 marks 5 oz., or, in other terms, 399,588,018, 5 grammes of fine silver, coined into money, will make exactly 88,797,315 fr. or 16,516,300 dollars. A sum, indeed, that would go no great way in modern warfare; but it must be considered, that war is now conducted on a very different principle, and has become infinitely more wasteful, in reality as well as in name.

In England a different arrangement has produced an effect directly contrary. In the year 1728, the natural course of ex- change fixed the relative value of gold to silver as 15 9/124 to 1; say 15 1/14 to 1, for the sake of simplicity; 1 oz. of gold was sold for 15 1/14 oz. of silver and vice versa. Accordingly that ratio was established by law 1 oz. of gold being coined into the nominal sum of £3 17s. 10½d. and 15 1/14 oz. of silver into the same sum. Thus, the government attempted permanently to fix a ratio, that is, in the nature of things, per- petually varying. The demand for silver gradually increased; its use for plate and other domestic purposes became more general the India trade received an additional stimulus and took off silver in preference to gold, for this reason, that the. relative value of silver to gold is higher in the East than in Europe; so that, by the end of the last century, the ratio of these metals one to the other in England became about 14½ to 1 only; and the same quantity of silver, that was coined into £3 17s. 10½d., would then sell in the market for £4 in gold. There was thus a profit on melting down the silver, and a loss on payments in that metal; for which reason, thencefor- ward, until the parliamentary suspension of specie payments by the Bank of England in 1797, payments of course were commonly made in gold.

Section 8= The Absence of any fixed ratio of Value between one Metal and another.

The same error, which led public functionaries to believe, that they could fix the relative value of any metal to com- modities, has also induced them to determine by act of law the relative value of the metals employed as money, one to the other. Thus, it has been arbitrarily enacted, that a given quantity of silver shall be worth 24 liv., and that a given quan- tity of gold shall likewise be worth 24 liv. In this manner, the ratio of the nominal value of gold to that of silver came to be legally established.

Since 1797, all payments have been made in paper. But, if England shall return to a metallic currency, framed upon the former monetary principles and regulations, it is probable that payments will be made in silver instead of gold, as before the suspension; for gold has risen in relative price to silver in the English market, probably in consequence of the large export of specie for commercial purposes, and greater difficulty of prevention in gold than in silver. Gold bullion in the English market is now to silver bullion in the ratio of about 1 to 15½, although the mint ratio is still 1 to 15 1/14. A payment in gold The pretension of authority was in both cases equally vain and impotent; and what has been the consequence? The rela- 107Jean-Baptise Say, A Treatise on Political Economy The value of a piece of silver is arbitrary, and is established by a kind of mutual accord on every act of dealing between one individual and another, or between the government and an individual Why, therefore, attempt to fix its value before- hand? since, after all, the fixation must be imaginary, and can never answer any practical purpose, in the money transac- tions of mankind. Why give a denomination to this fixed, imaginary value, which money can never possess? For what is a dollar, a ducat, a florin, a pound sterling, or a franc; what, but a certain weight of gold or silver of a certain established standard of quality? And, if this be all, why give these re- spective portions of bullion any other name, than the natural one of their weight and quality?

instead of silver would therefore be a gratuitous sacrifice of the difference between 15 1/14 and 15½.. Hence may be drawn this conclusion; that it is impossible in practice to assign any fixed ratio of exchangeable value to commodities whose ratio is for ever fluctuating, and, there- fore, that gold and silver must be left to find their own mutual level, in the transactions in which mankind may think proper to employ them. 285

The above remarks upon the relative value of gold and silver are equally applicable to silver and copper, as well as to all other metals whatever. There is no more propriety in declar- ing, that the copper contained in twenty sous shall be worth the silver contained in a livre tournois, than in enacting, that the silver contained in 24 liv. tournois shall be worth the gold in a louis d’or.

However, little mischief has been occasioned by fixing the ratio of copper to the precious metals, because the law does not authorize the payment of sums stipulated in livres tournois and francs in either copper or the precious metals indifferently; so that, in reality, the only metal money recognised by law as legal tender, for sums above the value of the lowest denomination of silver coin, is silver or gold. Five grammes of silver, says the law, shall be equivalent to a franc= which is just as much as to say, 5 grammes of silver is equivalent to 5 grammes of silver. For the only idea presented to the mind by the word franc, is that of the 5 grammes of silver it contains. Do wheat, chocolate or wax, change their name by the mere act of apportioning their weight?

A pound weight of bread, chocolate, or of wax candles, is still called a pound weight of bread, chocolate, or wax candles. Why, then, should not a piece of silver, weighing 5 grammes, go by its natural appellation? Why not call it simply 5 grammes of silver?

This slight alteration, verbal, critical, and nugatory as it may seem, is of immense practical consequence. Were it once ad- mitted, it would be no longer possible to stipulate in nominal value; every bargain would be a barter of one substantial com- modity for another of a given quantity of silver for a given quantity of grain, or butcher’s meat, of cloth, &c. &c. When- ever a contract for a long prospective period was entered into, its violation could not escape detection= a person taking an obligation to pay a given quantity of fine silver, it a day certain, would know precisely how much silver he would have to receive at the period assigned, provided his debtor continued solvent.

Section 9= Money as it ought to be.

From all that has been said in the preceding sections may be inferred my opinion of what money ought to be. The precious metals are so well adapted for the purposes of money, as to have gained a preference almost universal; and, as no other material has so many recommendations, no change in this particular is desirable.

So also of their division into equal and portable particles. They may very properly be coined into pieces of equal weight and quality as has heretofore been the practice among most civilized nations.

The whole monetary system would thenceforth fall to the ground; a system replete with fraud, injustice, and robbery, and moreover so complicated, as rarely to be thoroughly un- derstood, even by those who make it their profession. It would ever after be impossible to effect an adulteration of the coin, except by issuing counterfeit money; or to compound with creditors, without an open, avowed bankruptcy. The coinage of money would become a matter of perfect simplicity, a mere branch of metallurgy.

Nor can there be any better contrivance, than the giving them such an impression, as shall certify the weight and quality; or than the exclusive reservation to government of the right of impressing such certificate, and, consequently, of coining money; for the certificate of a number of coiners, all working together and in competition one with the other, could never give an equal security.

The denominations of weight, in common use before the in- troduction into France of the metrical system, that is to say, the once, gros, grain, had the advantage of conveying the notion of portions of weight, that had remained stationary for Thus far, then, and no further, should the public authority intermeddle with the business of money.

many ages, and were applicable to all commodities whatever, without distinction= so that the once could not be altered for the precious metals, without altering it at the same time for sugar, honey, and all commodities sold by the weight= but, in this particular, the new metrical system is infinitely prefer- able. It is founded upon a basis provided by nature, which must remain invariable as long as our world shall last. The gramme is the weight of a cubic centimetre of water= the centimetre is the hundredth part of a metre, and the metre is 1/10,000,000 part of the arc formed by the circumference of the earth, from the pole to the equator. The term gramme may be changed, but no human power can change that portion of weight actually designated by the term gramme; and who- ever shall contract to pay at a future date a quantity of silver, equal to 100 grammes weight, can never pay a less quantity of silver, without a manifest breach of faith, whatever arbi- trary measures of power may intervene.

less value than coin. This is obviously matter of practical ar- rangement; the principle requiring nothing, but that the obli- gation, after mentioning the metal and standard, should specify on the face of it, whether payable in national coin or bullion. The only object of such a law would be, to save the continual necessity of enumerating many particulars that would thence- forward be implied.

A government should never coin the bullion of private per- sons, without charging the profit, as well as the cost, of the operation. The monopoly of coinage will enable it to make this profit somewhat high= but it should be varied according to the state of metallurgic science, and the demand for circu- lation. Whenever the state has little to coin on its own ac- count, it had better lower its charges, than let its machinery and workmen remain idle; and, on the other hand, raise its charges, when the influx of bullion is rapid and superabun- dant. And in this, it would but imitate other manufacturers. As to the bullion bought and coined by government on its own account, the coin issued would reimburse the charges; and yield a profit by its superior value in exchange; as I have endeavoured to prove above, in Section 4

The power of a government to facilitate the transactions of exchange and contract, wherein the commodity, money, is employed, consists in dividing the metal into different pieces of one or more grammes or centigrammes, in such a manner, as to admit of instant calculation of the number of grammes a given payment will require.

To the marks indicative of weight and quality, should of course be superadded every device to prevent counterfeits. It has been ascertained by the experiments of the Academy of Sciences, that gold and silver resist friction better with a slight mixture of alloy, than in a pure state. People versed in these matters say, besides, that this complete purity cannot be ob- tained, without a very expensive chemical process, that would add greatly to the expense of coinage. There is no sort of objection to mixing alloy, provided the proportion be signi- fied by the impression, which should be nothing more than a mere certificate of the weight and quality of the metal. I have not occupied my reader’s time with any observations on the relative proportion of gold to silver; nor was there any occasion to do so. Having avoided any specification of their value under any particular denomination, I shall pay no more attention to the alternating variations of that value, than to the fluctuations of the relative value of both to all other com- modities. This must be left to regulate itself; for any attempt to fix it would be vain. With Regard to obligations, they would be dischargeable in the terms of contract= an undertaking to pay 100 grammes of silver would be discharged by the trans- fer of 100 grammes of silver; unless, at the lime of payment, by mutual consent of the contracting parties, any other metal, or goods at a rate agreed on, should be substituted in preference.

I make no mention of the terms franc, decime, centime, be- cause those names should never have been given to the coin, being, in fact, names indicative of nothing whatever. The laws of France, instead of enacting that pieces called francs, shall be coined, having the weight of 5 grammes of silver, should have simply ordered a coinage of pieces of 5 grammes. In which case, a letter of credit or bill of exchange, instead of being drawn for, say 400 fr., would be for 2000 grammes of silver of the standard of 9/10 silver to 1/10 alloy; or if pre- ferred, for 130 grammes of gold of the same degree of purity; and the payment would be the most simple imaginable; for the pieces of coin, gold and silver, would be all fractions or multiples of the gramme of metal of that standard. It would be difficult to calculate the advantage, that would accrue to industry in all its branches, from so simple an ar- rangement; but some notion of it may be obtained, by consid- ering the mischiefs that have resulted from a contrary system. Not only has the relative pecuniary position of individuals been repeatedly overset, and the best planned and most ben- eficial productive enterprises altogether thwarted and rendered abortive; but the interests of the public, as well as of private persons, are, almost everywhere, subject to daily and hourly aggression.

However, it would still be necessary to enact, that no sum stipulated in grammes of silver or gold should be payable otherwise than in coin, unless under a special proviso; else, the debtor might discharge all claims in bullion of somewhat 109Jean-Baptise Say, A Treatise on Political Economy A medium, composed entirely of either silver or gold, bear- ing a certificate, pretending to none but its real intrinsic value, and, consequently exempt from the caprice of legislation, would hold out such advantages to every department of com- merce, and to every class of society, that it could not fail to obtain currency even in foreign countries. Thus, the nation, that should issue it, would become a general manufacturer of money for foreign consumption, and might derive from that branch of manufacture no inconsiderable revenue. We read in Le Blanc, 286 that a particular coin issued by St. Louis, and called agnels d’or, from the figure of a lamb impressed upon them, was in great request even among foreigners, and a favourite money in commercial dealings, for the sole reason that it invariably contained the same quantity of gold, from the reign of St. Louis to that of Charles 6.

ing that the monarch, though an avowed patron of literature, was himself unable to write.

3. The coin was yet further from bearing any thing indicative of the standard quality of the metal, and this was the thing first encroached upon; for the sol in the reign of Philip I still contained the same fractional weight of the livre as origi- nally; but it was made up of 8 parts of silver to 4 copper, instead of containing, as under the second race of monarchs, 12 oz. of fine silver, which was the then weight of the livre. The very singular state of the actual money of England, and the extraordinary circumstances, that have occurred in respect to it since the first editions of this work appeared, have given a decisive proof, that the mere want of an agent of circula- tion, or, of the commodity, money, is sufficient to support a paper-money absolutely destitute of security for its convert- ibility at a high rate of value, or even at a par with metal, provided it be limited in amount to the actual demand of cir- culation. 287 Whence some English writers of great intelligence in this branch of science have been led to conclude, that, since the purposes of money call into action none of the physical and metallic properties of its material, some substance less costly than the precious metals, paper, for instance, may be employed in them with good effect, if due attention be paid to keep the amount of the paper within the demands of circu- lation. The celebrated Ricardo, has, with this object, proposed an ingenious plan, making the Bank or corporate body, in- vested with the privilege of issuing the paper-money, liable to pay in bullion for its notes on demand. A note, actually convertible on demand into so much gold or silver bullion, cannot fall in value below the value of the bullion it purports to represent; and, on the other hand, so long as the issues of the paper do not exceed the wants of circulation, the holder will have no inducement to present it for conversion, because the bullion, when obtained, would not answer the purposes of circulation. If a casual interruption of confidence in the paper should bring it for conversion in too large quantity, the paper remaining in circulation must rise in value, in the ab- sence of any other circulating medium, and there would be an inducement to bring bullion to the bank to be converted into paper. 288

Should France be so fortunate as to make this experiment, I hope none of those who do me the honour to read this work, will feel any regret at the drain of its money, to use the ex- pression of certain persons, who neither know nor choose to learn any thing of the matter. It is quite clear, that neither silver nor gold coin will go out of the kingdom, without leav- ing behind a value fully equivalent to the metal and the fash- ion it bears. The trade and manufacture of jewellery for ex- port are considered lucrative to the nation; yet they occasion an outgoing of the precious metals. The beauty of the form and pattern adds, to be sure, greatly to the price of the metal thus exported; but the accuracy of assay and weight, and, above all things, the maintenance of the coin at an invariable standard of weight and quality, would be an equal recom- mendation, and would undoubtedly be just as well paid for. Should it be objected, that the same system was adopted by Charlemagne, when he called a pound of silver a livre, and that notwithstanding the coin has been since repeatedly dete- riorated, until, at last, what was called a livre, contained, in fact, but 96 gr., I answer:

1. That, neither in the time of Charlemagne, nor at any subse- quent period, has there ever been a coin containing a pound of silver; that the livre has always been a money of account, an ideal measure. The silver coin of Charlemagne and his successors, consisted of sols of silver, the sol being a frac- tional part of the pound weight.

Section 10= A Copper and Base Metal 289 Coinage.

2. None of the coin has ever borne on the face of it the indica- tion of the weight of metal it contained. There are extant in the collections of medals many pieces coined in the reign of Charlemagne. The impression was nothing more than the name of the monarch, with the occasional addition of the name of the town where the coin was struck, executed in very rude characters; which, indeed, is not to be wondered at, consider. The copper coin and that of base metal, are not, strictly speaking, money; for debts cannot be legally tendered in this coin, except such fractional sums, as are too minute to be paid in gold or silver. Gold and silver are the only metal-money of almost all commercial nations. Copper coin is a kind of transferable security, a sign or representative of a quantity of silver too diminutive to be worth the coinage; and, as such, the government, that issues it, should always exchange it on de- mand for silver, when tendered to an amount equal to the smallest piece of silver coin. Otherwise, there is no security against the issue of an excess beyond the demand of circula- tion.

As long as a government gives silver on demand for the cop- per and base metal regularly presented, it can with little in- convenience give them very trifling intrinsic value; the de- mand for circulation will always absorb a very large quantity, and they will maintain their value as fully, as if really worth the fractional silver represented; on exactly the same prin- ciple, as a bank-note passes current, and that too for years together, without any intrinsic value, just as well as if really worth the sum it purports on the face of it to contain. In this manner, such a coinage can be made more profitable to the government than by any compulsion to receive it in part pay- ment; and the value of the legal coin will suffer no deprecia- tion. The only danger is that of counterfeits, which there is the strongest stimulus for avarice to fabricate, in proportion as the difference between the intrinsic, and the current value, grows wider.

Whenever there is such an excess, the holders, finding the base metal less advantageous than the gold and silver it rep- resents but does not equal in value, would strive to get rid of it in every way; whether by selling to a loss, or by employing it in preference to pay for low-priced articles, which would consequently rise in nominal price; or by proffering it to their creditors in larger quantity, than enough to make up the frac- tional part of sums in account. The government, having an interest in preventing its being at a discount, because that would reduce the profit upon all future issues, generally au- thorizes the latter expedient.

The last King of Sardinia’s predecessor, in attempting to with- draw from circulation a base currency, issued by his father in a period of calamity, had more than thrice the quantity origi- nally issued by the government thrown upon his hands. The same thing happened to the king of Prussia, when, under the assumed name of the Jew Ephraim, he withdrew the base coin he had compelled the Saxons to receive, during his distresses in the seven years’ war; 290 and for exactly the same reason. Counterfeits of the coin are usually executed beyond the na- tional frontier. In England it was attempted to remedy this evil in the year 1799, by a coinage of half-pence with a very fine impression, and executed with an attention and perfec- tion, that counterfeiters can rarely bestow.

Before 1808, for instance, it was a legal tender at Paris to the extent of 1/40 of every sum due; which had exactly the same effect, as a partial debasement of the national currency. Ev- ery body knew, when a bargain was concluded, that he was liable to be paid in proportion of 1/40 copper or brass metal, to 39/40 silver, and made his calculation accordingly, on terms proportionably higher, than if no such regulation had existed. It is with this particular, precisely as with the weight and stan- dard of the silver coin; sellers do not stop to weigh and assay every piece they receive, but the dealers in gold and silver, and those connected with the trade, are perpetually on the watch to compare the intrinsic, with the current, value of the coin; and, whenever their values differ, they have an oppor- tunity of gain; their operations to obtain which, have a con- stant tendency to put the current value of the coin on a level with its real value.

Section 11= The preferable Form of Coined Money.

The wear of the coin by friction is proportionate to the extent of its surface. Of two pieces of coin of equal weight and qual- ity, that will suffer least from continual use, which offers the least surface to the friction. The obligation to receive copper in any considerable propor- tion, has, in like manner, an influence upon the exchange with foreigners. There is no question, that a letter of exchange on Paris payable in francs is sold cheaper at Amsterdam, in con- sequence of the liability to receive part payment in copper or base metal; just as it would be, if the franc were made to contain less of silver and more of alloy. The spherical or globular form is, consequently, preferable in this respect, as least liable to wear; but it has been rejected on account of its inconvenience. Yet, it is to be observed, that, on the whole, the value of money is not so much affected by this circumstance, as by the mix- ture of alloy; for the alloy has positively no value whatever, for the reasons above stated; whereas, the copper money, payable in the ratio of 1/40, had a small intrinsic value, though inferior to the sum in silver, it was made to pass for= had it been of equal value, there would have been no occasion for an express law to give it currency. Next to this form, the cylinder, of equal depth and breadth, is that, which exposes the smallest surface; but this is fully as inconvenient as the other; the form of a very flat cylinder has, consequently, been very generally adopted. However, from what has been already said, it will appear, that the less it is flattened the better; and that the coin should rather be made thick than broad.

when the diminution is discovered, it may be impossible to tell, by which of the innumerable holders it was effected. I am aware, that each of them has imperceptibly shared the depreciation of its exchangeable value, occasioned by the wear; that the quantity of goods it would purchase has de- clined by an insensible gradation; that, although the depre- ciation has been imperceptibly progressive, it becomes at last very manifest; and that worn money will not be taken at par with new coin. Consequently, I think, that, if an entire class of coin were gradually so reduced as to make a re-coinage necessary, its holders could not in reason expect that their reduced coin should be exchanged for new at par, piece for piece. Their money should be received, even by the govern- ment, at no more than its real value; the silver it contains is less in quantity than at the first issue; and it has been received by the holders at a lower rate of value; they have given for it less goods than they would have done in the outset. With regard to the impression, the chief requisites are, 1. That it specify the weight and quality of the piece; 2. That it be very distinct, and intelligible to the meanest capacity; 3. That the die oppose all possible difficulties to the defacing or re- ducing of the coin; that is to say, that it be so contrived, that neither the ordinary wear nor fraudulent practices should be able to reduce the weight without destroying the impression. The last coined English half-pence have a cord, not project- ing, but indented in the thickness of the circumference, and occupying the central part of the circumference only, so as to make it liable neither to clipping nor wear. This mode might be adopted in the silver and gold coinage with certainty and success; and it is of much more consequence to prevent their deterioration. When the impression is in basso relievo, it should project but little, for the convenience of piling the pieces one upon an- other, as well as to reduce the friction. On the same account a projecting impression should not be too sharp on the surface, or it would wear away too rapidly. With a view to prevent this, experiments have been made of dies executed in alto relievo; but it was found that the coin was thereby too much weakened, and liable to be bent or broken. This plan, how- ever, might possibly be practised with advantage, if the pieces were secured by greater thickness. In fact this is the course that rigid justice would prescribe; but there are two reasons, why it should not be strictly en- forced.

1. Each individual piece of coin is not, if I may be allowed the expression, a substantive article of commerce. Its ex- changeable value is calculated, not according to the weight and quality of the identical piece in question, but according to the average weight and quality of the coin in large quanti- ties, as ascertained by common experience. A crown piece of an earlier date, and more worn, is yet freely received in ex- change for one more new and perfect; the difference is sunk in the average. The mint issues new pieces every year of the full weight and standard, which prevents the coin from de- clining sensibly in value, in consequence of the friction, even for many years after its issue. The same motive of giving to the coin the least possible sur- face, should induce the government to issue as large pieces as convenience will admit; for the more pieces there are, the greater is the surface exposed to friction. No more small pieces of coin should be issued, than just enough to transact ex- changes of small amount, and to pay fractional sums. All large sums should be paid in large pieces of coin. This circumstance is illustrated by the fact, of the French pieces of 12 and 24 sous passing current at par with the crown- pieces of 6 livres without any difficulty; although the same nominal sum, in the shape of the worn pieces of 12 and 24s., contained in reality about ¼ less silver than the crown-piece.

Section 12= The Party, on whom the Loss of the Coin by Wear should properly fall.

It has been a question, who ought to defray the loss, conse- quent upon the friction or wear of the coin? In strict justice, the person who had made use of it, in like manner as the wearer of ayjv other commodity. A man, that re-sells a coat after having worn it, sells it for less than he gave for it when new. So a man, that sells a crown-piece for some other com- modity, should sell it for less than he gave; that is to say, should receive a smaller quantity of goods than he obtained it with.

The subsequent law, which prohibited their being taken by the public receivers or private persons at more than 10 and 20 sous, rated them at their full intrinsic value, but below the rate, at which the then holders had taken them. For their value had been previously kept up to 12 and 24 sous in spite of the wear, by reason of their passing current at par with the crown- piece. Thus, the last holder was saddled with the entire loss of a friction, to which the innumerable hands they had passed through had all contributed.

But the portion of a specific coin, consumed in its passage through the hands of any one honest person, is less than al- most any assignable value. It may circulate for many years together, without any sensible diminution of its weight; and, 2. The impression is equally effectual in giving currency at the last as at the first, although it becomes in course of time scarcely, if at all visible; witness the shillings of England. The coin derives, as above explained, a certain degree of value from the mere impression, which value has been admitted and recognised throughout, until it reaches the ultimate holder, who has in consequence received it at a higher rate, than he would a piece of blank bullion of equal weight. To saddle him with the difference, would be to make him lose the whole value of the impression, although it has been equally service- able to perhaps a million of others. The right conveyed by the assignment of these engagements, though not capable of being enforced immediately, or else- where than at the stipulated place, yet gives them an actual value, greater or less, according to circumstances. Thus a bill of exchange for 100 dollars, payable at Paris at two months’ date, may be negotiated or sold, at pleasure, at the rate of, say 99 dollars, while a letter of credit of like amount, payable at Marseilles in the same space of time, will, perhaps, be worth at Paris but 98 dollars.

On these grounds, I am inclined to think, the loss by wear, and that of the impression, should be borne by the commu- nity at large; that is to say, by the public purse= for the whole society derives the benefit of the money; and it is impossible to tax each individual, in the precise proportion of the use he has made of it. These engagements may be used as money in all transactions of purchase, as soon as they are invested with actual present value, by the prospect of their future value; indeed, most of the greater operations of commerce are effected through the medium of these securities.

Sometimes, the circumstance of a bill of exchange being pay- able at another place will increase, instead of diminishing its value; but this depends upon the state of commerce for the time being. If the merchants of Paris have large payments to make to those of London, they will readily give more money at Paris for a bill upon London, than it will produce to the holder at the latter place. Thus, although the pound sterling contain precisely as much silver as 24 fr. 74 cents, they will, perhaps, give at Paris 25 fr., more or less, for every pound sterling payable in London. 291

To conclude= every individual, that carries bullion to the mint to be coined may be fairly charged the expenses of the pro- cess, and, if thought advisable, the full monopoly-profit. Thus far there is no harm done= his bullion is increased in value to the full amount of what he has been charged by the mint; otherwise, he would never have carried it thither. At the same time, I am of opinion, that the mint should always give a new piece in exchange for an old one on demand= which need nowise interfere with the utmost possible precautions against the clipping and debasing of the coin. The mint should refuse such pieces as have lost certain parts of the impression, which are not liable to fair and unavoidable wear; and the loss in that case should fall on the individual, careless enough to take a piece thus palpably deficient. The promptitude, with which the public would take care to carry injured or suspi- cious pieces to the mint, would greatly facilitate the detec- tion of fraudulent practices.

This is what is called the course of exchange, being, in fact, a mere specification of the quantity of precious metal people will consent to give, for the transfer of a right to receive a given quantity of the same metal at any other specified place. The particular locality of the metal reduces or increases its value, in relation to the same metal situated elsewhere. The exchange is said to be in favour of any country, France, for example, whenever less of the precious metal is there given for, than will be produced by, a bill of exchange upon another country; or whenever in the foreign country more of the pre- cious metal is given for a bill of exchange on France, than it will there produce to the holder. The difference is never very considerable, and cannot exceed the charge of transporting the precious metal itself; for, if a foreigner, who wants to make a payment at Paris, can remit the sum in specie at less ex- pense than he could be put to by the existing course of ex- change, he would undoubtedly remit in specie. 292 With diligence on the part of the executive, the loss arising from this source might be reduced to a mere trifle, and the system of national money would be materially improved, as well as the foreign exchange.