MONEY

Is still used in the form of tokens, convertible into silver in very small payments. In this country, copper pence and halfpence are rated at about 72 per cent, above their real value; but as their i ue is exclusively in the hands of government, and as they are only legal tender to the extent of one shilling in any one payment, this overvaluation is not productive of any bad effect. The use of copper in other countries is limited in much the same way; gold and silver being every where the only metals made use of in the manufacture of the coins used in considerable payments. Variations of the Standard. — The value of all sorts of property being estimated, and the stipulations in almost all contracts for its purchase, sale, or hire being made in money or coins, it is plain that no change can take place in the value of such money or coins without virtually subverting these estimates and contracts, and enriching the debtor portion of society at the expense of the creditor portion, or vice vers a. As the cost of producing all commodities is liable to vary from improvements in the arts, the exhaustion of the present or the discovery of new sources of supply, none can be selected to serve as money or coin that may not vary in its cost or real value. It is believed, however, that the precious metals vary le than any material that could be suggested; and, with the exception of the extraordinary fall in their value caused by the discovery of the American mines, it seems to have been remarkably constant at other periods. But, in addition to the fluctuations naturally inherent in the value of coins, arising from variations m the cost of the metal of which they are made, their standard has been repeatedly changed. Notwithstanding that money or coin, from its being universally used as a scale by which to compute the value of all commodities, and as the equivalent for which they are commonly exchanged, is by far the most important of all the measures used in society, and should, consequently, be preserved as invariable as po ible, there is none that has been so frequently altered. The nece ities or extravagance of governments have forced them to borrow; and, to relieve themselves of the incumbrances thus contracted, they have almost universally had recourse to the disgraceful expedient of degrading Ihe coin; that is, of cheating those who lent them money to the extent of the degradation, and of enabling every other debtor in their dominions to do the same. The ignorance of the public in remote ages facilitated this species of fraud. Had the names of the coins been changed when the quantity of metal contained in them was diminished, there would have been no room for misapprehension. But, although the weight of the coins was undergoing perpetual and their purity occasional reductions, their ancient denominations were almost uniformly preserved; and the people who saw the same names still remaining after the substance was diminished, — who saw coins of a certain weight and finene circulate under the names of florins, livres, dollars, and pounds, — and who saw them continue to circulate as such after both their weight and the degree of their finene had been le ened, began to think that they derived their value more from the stamp affixed to them by authority of government than from the quantity of the precious metals they contained. This was long a very prevalent opinion; but the rise of prices which invariably followed every reduction of the standard, and the derangement that was thereby occasioned in every pecuniary transaction, undeceived the public, and taught them and their rulers the expediency of preserving the standard of money inviolate. The standard may be reduced by simply raising the denomination of the coin; byordeinng, for example, that a half-sovereign should pa for a sovereign, and the latter for a double sovereign, . If injustice be resolved upon, this is the least mischievous way in which it can be perpetrated, inasmuch as it saves all the trouble and expense of a recoinage. But as it renders the fraud obvious and glaring, it has rarely been resorted to; and most reductions have been effected either by diminishing the weight of the coins, or by increasing the proportion of allojr in the metal of which they are made, or both. Originally the coins of all countries seem to have had the same denominations as the weights commonly used in them, and contained the exact quantity of the precious metals indicated by their name. Thus, the talent was a weight used in the earliest period by the Greeks, the as or pondo by the Romans, the livre by the French, and the pound by the English and Scotch; and the coins originally in use in Greece, Italy, France, and England bore the same names, and weighed precisely a talent, a pondo, a livre, and a pound. The standard has not, however, been preserved inviolate, either in modern or ancient times. It has been le degraded in England than any where else; but even here the quantity of silver in a pound sterling is le than the third part of a pound weight, the quantity it contained in 1300. In France, the livre current in 1789 contained le than one sixty-sixth part of the silver implied in its name, and which it had actually 763 contained previously to 1103. In Spain and some othet countries, the degradation has been carried still further. From 1296 to 1355 the coins of England and Scotland were of the same weight and purity; but at the last mentioned epoch the standard of Scotch money was, for the first time, sunk below that of England; and by succe ive degradations the value of Scotch money, at the union of the crowns in 1600, was only a twelfth part or the value of the English money of the same denomination. It remained at this point till the union of the kingdoms cancelled the separate coinage of Scotland. The gold and silver coins of Ireland have been for a considerable period the same as those of Great Britain; but until 1825 they were nominally rated 8| per cent, higher. This difference of valuation, which was attended with considerable inconveniences, was put an end to by the act 6 Geo. 4. c. 79., which a imilated the currency throughout the empire. Mint or Government Valuation of Gold and Silver Coins. — If both gold and silver coins be made legal tender, it is obviously indispensable that their value with respect to each other should be fixed by authority; or that it should be declared that individuals shall be entitled to discharge the claims upon them by payments either of gold or silver coins, according to some regulated proportion,— a practice which was long adopted in England. But the value of each of the precious metals is liable to perpetual changes; and hence, how accurately soever their proportional value, as fixed by the mint regulations, may correspond with the proportion which they actually bear to each other in the market when the regulation is made, the chances are ten to one that it will speedily cease to expre their relation to each other. The moment, however, that such a change takes place, it becomes the obvious interest of every one who has a payment to make to make it in the overvalued metal; which, consequently, becomes the sole, or nearly the sole, currency of the country. Hence the reason why the coins of some countries are almost wholly of silver, and others almost wholly of gold. It is estimated, for example, that when it was fixed, in 1717, that the guinea should exchange for 21 shillings, gold was overvalued as compared with silver to the extent of lj| per cent. {Liverpool on Coins, p. 85.); and as the real value of silver with respect to gold continued to increase during the greater part of last century, the advantage of paying in gold in preference to silver became more decided, and ultimately led to the universal use of gold in all large payments, and to the fusion or exportation of all silver coins of full weight. {lAver pool, loco cit.) In France a different valuation of the metals has had a different effect. Previously to the recoinage in 1785, the Louis d'or was rated in the mint proportion at only 24 livres, when it was really worth 25 livres 10 sols. Those, therefore, who should have discharged the obligations they had contracted by payments of gold coin instead of silver, would plainly have lost 1 livre 10 sols on every sum of 24 livres. In consequence very few such payments were made; gold was almost entirely banished from circulation, and silver became almost the only species of metallic money used in France. {Say, Traite d'Economie Politique, tom. i. p. 393.) In 1816 a new system was adopted in this country; it being then enacted (56 Geo. 3. c. 68.), that gold coins only should be legal tender in all payments of more than 40 shillings. The pound of silver bullion that had previously been coined into 62 shillings was then also coined into 66 shillings, the additional four shillings being retained by government as a seignorage or duty (amounting to 6^ per cent.) upon the coinage. To prevent the silver coins from becoming redundant, government has retained the power to i ue them in its own hands. Under these regulations, silver has ceased to be a standard of value, and forms merely a subordinate or subsidiary species of currency, or change, occupying the same place in relation to gold that copper occupies in relation to itself This system has been found to answer exceedingly well. A good deal of difference of opinion has existed as to whether gold or silver coins are best fitted for being made a legal tender. It does not seem that the one po e es any very striking advantage over the other; none, certainly, that would justify a change, after a selection has been made and acted upon for any considerable period. Down to 1626, a seignorage or duty upon the coinage was usually charged upon the gold and silver coins i ued by the mint; and it may be easily shown that the imposition of such a duty, when it is not carried to an undue height, is advantageous. A coin is more useful than a piece of uncoined bullion of the same weight and purity; the coinage fitting it for being used as money, while it does not unfit it for being used for any other purpose. When, therefore, a duty or seignorage is laid upon coin equal to the expense of coinage, it circulates at its real value; but when this charge is defrayed by the public, it circulates at le than its real value, and is consequently III. 0 3 2 6 5 0 6 0 0 0 Edward IV. 49 Henry VI. 22 Edward IV. 1 Richard III. 1 Henry VII. 1 Henry VIII. t 5 1 10 1 10 1 17 1 17 1 17 1 17 1 17 1 17 1 17 2 0 2 5 0 0 10 0 0 10 0 0 10 0 1 0 0 10 0 4 6 0 4 6 1 0 3| 1 5 9 15 9 1 10 11 1 10 11 1 15 2: 1 15 2: 1 17 11 1 18 1 18 1 18 II, 1 18 111 2 4 0 I., t. d. 12 10 8 13 3 9 14 8 4 9 11 9 H 2 9 1 11 0 5 1 10 9 7 2 8 2 8 2 8 2 8 3 12 3 12 3 0 0 8 9 0 4 4 4 4 4 0 2 4 4| 2 11 9| 2 15 6 2 15 6 2 19 2i 14 14 16 16 18 21 21 9 21 15 21 15 21 15 22 0 22 0 24 19 26 8 27 10 27 10 31 7 33 0 3 0 0 I 3 0 6 3 0 0 432.Tames I. 2 Charles I. 18 Charles II. 3 (jeorge I. 56' Geo, ge III. 0 0 0 0 0 4 2 19 6 3 0 0 3 2 0 3 2 0 44 10 46 14 46 14 * The lo of a note is no doutt as severely felt by the holder as the lo of an equivalent amount of coin; hut as the i uer of (he note is benefitted by its lo to the same extent that the holder is injured, the society is plainly neither the better nor the worse for the occurrence. The Saxon or Tower pound was used at the mint up to this time, when the pound trov was substituted in its t 1527— Henry VIII., stead. The Tower pound was but 11 oz. 5 dwts. Uoy; so that, from the Conquest to the; pound in weight. 1 Edwar<l I., 20 shillings in tale were exactly a •ignt. % 1666 — 18 Charles II.] The seignorage on the coinage was at this time given up, and the gold bullion brought to the mint has ever 1 been coined free of expense. A seignorage of 644 per cent, was imposed on the coinage of silver by 56 Geo. 3. 764 [s. 776]