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wasted in settling the respective exchangings amongst mankind. Nevertheless the plenty or scarcity of those coins cannot entirely depend on any government, but on the general circulation and fluctuation of trade, which may make them a merchandise without the least detriment; as it must be allowed, that the precious metals gold and silver, of which such coins are principally composed, are no other than merchandise acquired from countries where there are mines, by those countries which have none, in exchange for the produce of their land or of their manufactures.
Silver Coin and its Scarcity.
29. That the welfare of any state depends on its keeping all its gold and silver, either in bullion or in coin, must be founded on a very narrow principle indeed. All republics we know of, wisely think otherwise. Spain, the grand source of silver, has of late years, very justly, allowed the free exportation of it, paying a duty, as in Great Britain lead and tin do; nor, prior to this permission, could their penal laws in Spain hinder its being exported; for it was a commodity, which that kingdom was under a necessity of giving as an equivalent, for what was furnished to them by other
Could Spain and Portugal have succeeded in executing their foolish laws of "hedging in the cuckoo," as Locke calls it, and have kept at home all their gold and silver, those metals would, by this time, have been of little more value than so much lead or iron. Their plenty would have lessened their value. We see the folly of these edicts; but are not our own prohibitory and restrictive laws, that are professedly made with intention to bring a balance in our favor from our trade with foreign nations to be paid in money,
and laws to prevent the necessity of exporting that money, which, if they could be thoroughly executed, would make money as plenty and of as little value; I say, are not such laws akin to those Spanish edicts, follies of the same family?
30. In Great Britain, the silver coin bearing a disproportion to gold more than in neighbouring states, of about five in the hundred, must, by that disproportion, become merchandise, as well for exportation, as for the manufactures at home in which silver is employed, more than if it remained in the mass uncoined. This might be remedied without injuring the public, or touching the present standard, which never should be done, only by enacting that sixty-five shillings should be cut out of one pound weight of standard silver, instead of sixty-two, which are the number now ordained by law. We must however remark, that whenever, by any extraordinary demand for silver, a pound weight, bought even for sixty-five shillings, can be sent abroad to advantage, or melted down for manufactures, no prohibitory laws will hinder its exportation or melting, and still becoming a merchandise.
Other Coins and Paper Money.
31.. Coiners have pointed out, though at the risk of the gallows, a measure which we think would be advisable in some degree for government to adopt. They coin and circulate shillings of such weight as to gain ten to fourteen in the hundred, and upwards; as out of a pound of standard silver they cut sixty-eight or seventyone shillings. That these light shillings or counters are useful, though the public be so greatly imposed on, is evident. It must be presumed, that every thing is put in practice by government to detect and stop this manifest roguery. If so, can it on the one hand be
supposed the public purse should bear the burden of this fraud? Yet, on the other hand, having no supply of legal shillings or counters, the utility of the illegal ones forces them, as it were, on the public. The power of the legislature to correct the erroneous proportion of five in the hundred, as above mentioned, is indubitable; but whether every private person possessed of these counters, or the public purse, should be obliged to bear the loss on a re-coinage, seems a difficult point to determine; as it may be alleged, that every private person has it in his power to accept or refuse any coin under the weight, as by law enacted, for each denomination. If the former, he does it to his own wrong, and must take the consequences. The individual, on the other hand, has to allege the almost total want of lawful counters; together with the impossibility or neglect of hindering those of an inferior weight from being suffered to be current. It may be submitted, that, as the use of coin is for public utility, any loss which rises in the coin either by wearing, or even by filing and sweating, ought to be made good by calling in the coin after a certain number of years from the time of coinage, and receiving the money called in at the charge of the public. We are well aware what latitude such a resolution might give to the coiners of shillings, the filers, and the sweaters of gold; but, taking proper measures beforehand, this evil might, we think, in a great degree be prevented.
32. In the beginning of his present Majesty's reign, quarter-guineas were wisely ordered to be coined; whereby the want of silver coin was in some degree supplied, which would still be more so, were thirds and two-thirds of guineas to be coined. We cannot conceive why this is not done, except that these denominations are not specified in his Majesty's indenture
with the master of the mint; which in our humble opinion ought to be rectified.
33. We think it not improper here to observe, that it matters not whether silver or gold be called the standard money; but it seems most rational that the most scarce and precious metal should be the unit or standard.
That, as to copper, it is as fit for money or a counter, as gold or silver, provided it be coined of a proper weight and fineness; and just so much will be useful as will serve to make up small parts in exchange between man and man, and no more ought to be coined.
As to paper circulating as money, it is highly profitable, as its quick passing from one to another is a gain of time, and thereby may be understood to add hands to the community; inasmuch as those, who would be employed in telling and weighing, will follow other business. The issuers or coiners of paper are understood to have an equivalent to answer what it is issued for or valued at; nor can any metal or coin do more than find its value.
It is impossible for government to circumscribe or fix the extent of paper credit, which must, of course, fluctuate. Government may as well pretend to lay down rules for the operations or the confidence of every individual in the course of his trade. Any seeming temporary evil arising must naturally work its own
34. As some principles relative to exchange have, in our opinion, been treated of in a very confused manner, and some maxims have been held out upon that subject, which tend only to mislead, we shall here briefly lay down what, according to our opinion, are self-evident principles.
35. Exchange, by bills, between one country or city and another, we conceive to be this. One person wants to get a sum from any country or city; consequently has his bill or draft to sell; another wants to send a sum thither, and therefore agrees to buy such bill or draft. He has it at an agreed-for price, which is the course of the exchange. It is with this price for bills, as with merchandise; when there is a scarcity of bills in the market, they are dear; when plenty, they are cheap.
36. We judge it needless to enter into the several courses and denominations of exchanges, which custom hath established; they are taught at school. But we think we must offer a few words to destroy an erroneous principle, that has misled some and confused others; which is, that by authority a certain par or fixed price of exchange should be settled between each respective country; thereby rendering the currency of exchange as fixed as the standard of coin.
37. We have above hinted, that plenty and scarcity must govern the course of exchange. Which principle, duly considered, would suffice on the subject; but we will add, that no human foresight can absolutely judge of the almost numberless fluctuations in trade, which vary, sometimes directly, sometimes indirectly, between countries; consequently no state or potentate can by authority any more pretend to settle the currency of the prices of the several sorts of merchandise sent to and from their respective dominions, than they can a par of exchange. In point of merchandise, indeed, where there is a monopoly of particular commodities, an exception must be allowed as to such articles; but this is not at all applicable to trade in general, for the encouragement of which we cannot too often repeat, that freedom and security are most essentially necessary.