though we had no direct trade with Portugal,
this small quantity could always, somewhere
or another, be very easily got.
Though the goldsmiths trade be very considerable
in Great Britain, the far greater part
of the new plate which they annually sell, is
made from other old plate melted down; so
that the addition annually made to the whole
plate of the kingdom cannot be very great, and
could require but a very small annual importation.
It is the same case with the coin. Nobody
imagines, I believe, that even the greater part
of the annual coinage, amounting, for ten
years together, before the late reformation of
the gold coin, to upwards of L.800,000 a-year
in gold, was an annual addition to the money
before current in the kingdom. In a country
where the expense of the coinage is defrayed
by the government, the value of the coin, even
when it contains its full standard weight of
gold and silver, can never be much greater
than that of an equal quantity of those metals
uncoined, because it requires only the trouble
of going to the mint, and the delay, perhaps,
of a few weeks, to procure for any quantity of
uncoined gold and silver an equal quantity of
those metals in coin; but in every country
the greater part of the current coin is almost
always more or less worn, or otherwise degenerated
from its standard. In Great Britain
it was, before the late reformation, a good
deal so, the gold being more than two per
cent., and the silver more than eight per cent.
below its standard weight. But if forty-four
guineas and a-half, containing their full standard
weight, a pound weight of gold, could
purchase very little more than a pound weight
of uncoined gold; forty-four guineas and a-half,
wanting a part of their weight, could
not purchase a pound weight, and something
was to be added, in order to make up the deficiency.
The current price of gold bullion
at market, therefore, instead of being the same
with the mint price, or L.46 : 14 : 6, was
then about L.47 : 14s., and sometimes about
L.48. When the greater part of the coin, however,
was in this degenerate condition, forty-four
guineas and a-half, fresh from the mint,
would purchase no more goods in the market
than any other ordinary guineas; because,
when they came into the coffers of the merchant,
being confounded with other money,
they could not afterwards be distinguished
without more trouble than the difference was
worth. Like other guineas, they were worth
no more than L.46 : 14 : 6. If thrown into
the melting pot, however, they produced, without
any sensible loss, a pound weight of
standard gold, which could be sold at any
time for between L.47 : 14s. and L.48, either
in gold or silver, as fit for all the purposes of
coin as that which had been melted down.
There was an evident profit, therefore, in
melting down new-coined money; and it was
done so instantaneously, that no precaution
of government could prevent it. The operations
of the mint were, upon this account,
somewhat like the web of Penelopé; the work
that was done in the day was undone in the
night. The mint was employed, not so much
in making daily additions to the coin, as in
replacing the very best part of it, which was
daily melted down.
Were the private people who carry their
gold and silver to the mint to pay themselves
for the coinage, it would add to the value of
those metals, in the same manner as the fashion
does to that of plate. Coined gold and
silver would be more valuable than uncoined.
The seignorage, if it was not exorbitant,
would add to the bullion the whole value of
the duty; because, the government having
everywhere the exclusive privilege of coining,
no coin can come to market cheaper than they
think proper to afford it. If the duty was
exorbitant, indeed, that is, if it was very much
above the real value of the labour and expense
requisite for coinage, false coiners, both
at home and abroad, might be encouraged, by
the great difference between the value of bullion
and that of coin, to pour in so great a
quantity of counterfeit money as might reduce
the value of the government money. In
France, however, though the seignorage is
eight per cent., no sensible inconveniency of
this kind is found to arise from it. The dangers
to which a false coiner is everywhere exposed,
if he lives in the country of which he
counterfeits the coin, and to which his agents
or correspondents are exposed, if he lives in
a foreign country, are by far too great to be
incurred for the sake of a profit of six or seven
per cent.
The seignorage in France raises the value
of the coin higher than in proportion to the
quantity of pure gold which it contains. Thus,
by the edict of January 1726, the[41] mint price
of fine gold of twenty-four carats was fixed at
seven hundred and forty livres nine sous and
one denier one-eleventh the mark of eight Paris
ounces. The gold coin of France, making
an allowance for the remedy of the mint, contains
twenty-one carats and three-fourths of
fine gold, and two carats one-fourth of alloy.
The mark of standard gold, therefore, is worth
no more than about six hundred and seventy-one
livres ten deniers. But in France this
mark of standard gold is coined into thirty
louis d'ors of twenty-four livres each, or into
seven hundred and twenty livres. The coinage,
therefore, increases the value of a mark
of standard gold bullion, by the difference between
six hundred and seventy-one livres ten
deniers and seven hundred and twenty livres,
or by forty-eight livres nineteen sous and two
deniers.