the coinage is free, yet the gold which is carried
in bullion to the mint, can seldom be returned
in coin to the owner till after a delay
of several weeks. In the present hurry of the
mint, it could not be returned till after a delay
of several months. This delay is equivalent
to a small duty, and renders gold in coin
somewhat more valuable than an equal quantity
of gold in bullion. If, in the English
coin, silver was rated according to its proper
proportion to gold, the price of silver bullion
would probably fall below the mint price,
even without any reformation of the silver
coin; the value even of the present worn and
defaced silver coin being regulated by the value
of the excellent gold coin for which it can
be changed.
A small seignorage or duty upon the coinage
of both gold and silver, would probably
increase still more the superiority of those
metals in coin above an equal quantity of
either of them in bullion. The coinage
would, in this case, increase the value of the
metal coined in proportion to the extent of
this small duty, for the same reason that the
fashion increases the value of plate in proportion
to the price of that fashion. The superiority
of coin above bullion would prevent
the melting down of the coin, and would
discourage its exportation. If, upon any
public exigency, it should become necessary
to export the coin, the greater part of it would
soon return again, of its own accord. Abroad,
it would sell only for its weight in bullion.
At home, it would buy more than that weight.
There would be a profit, therefore, in bringing
it home again. In France, a seignorage
of about eight per cent. is imposed upon the
coinage, and the French coin, when exported,
is said to return home again, of its own accord.
The occasional fluctuations in the market
price of gold and silver bullion arise from the
same causes as the like fluctuations in that
of all other commodities. The frequent loss
of those metals from various accidents by sea
and land, the continual waste of them in
gilding and plating, in lace and embroidery,
in the wear and tear of coin, and in that of
plate, require, in all countries which possess
no mines of their own, a continual importation,
in order to repair this lose and this
waste. The merchant importers, like all
other merchants, we may believe, endeavour,
as well as they can, to suit their occasional
importations to what they judge is likely to
be the immediate demand. With all their
attention, however, they sometimes overdo
the business, and sometimes underdo it.
When they import more bullion than is wanted,
rather than incur the risk and trouble of
exporting it again, they are sometimes willing
to sell a part of it for something less than
the ordinary or average price. When, on the
other hand, they import less than is wanted,
they get something more than this price.
But when, under all those occasional fluctuations,
the market price either of gold or silver
bullion continues for several years together
steadily and constantly, either more or
less above, or more or less below the mint
price, we may be assured that this steady and
constant, either superiority or inferiority of
price, is the effect of something in the state of
the coin, which, at that time, renders a certain
quantity of coin either of more value or
of less value than precise quantity of bullion
which it ought to contain. The constancy
and steadiness of the effect supposes a
proportionable constancy and steadiness in
the cause.
The money of any particular country is, at
any particular time and place, more or less an
accurate measure or value, according as the
current coin is more or less exactly agreeable
to its standard, or contains more or less exactly
the precise quantity of pure gold or
silver which it ought to contain. If in
England, for example, forty-four guineas and
a half contained exactly a pound weight of
standard gold, or eleven ounces of fine gold,
and one ounce of alloy, the gold coin of England
would be as accurate a measure of the
actual goods at any particular time
and place as the nature of the thing would
admit. But if, by rubbing and wearing,
forty-four guineas and a half generally contain
less than a pound weight of standard
gold, the diminution, however, being greater
in some pieces than in others, the measure of
value comes to be liable to the same sort of
uncertainty to which all other weights and
measures are commonly exposed. As it rarely
happens that these are exactly agreeable to
their standard, the merchant adjusts the price
of his goods as well as he can, not to what
those weights and measures ought to be, but
to what, upon an average, he finds, by experience,
they actually are. In consequence of
a like disorder in the coin, the price of goods
comes, in the same manner, to be adjusted,
not to the quantity of pure gold or silver
which the coin ought to contain, but to that
which, upon an average, it is found, by experience,
it actually does contain.
By the money price of goods, it is to be
observed, I understand always the quantity of
pure gold or silver for which they are sold,
without any regard to the denomination of
the coin. Six shillings and eight pence, for
example, in the time of Edward I., I consider
as the same money price with a pound
sterling in the present times, because it contained,
as nearly as we can judge, the same
quantity of pure silver.