Particular circumstances in the New Eng-immoderately fond of its modes, manufactures, land colonies made paper-money less neces- and superfluities, cannot be restrained from sary and less convenient to them. They have purchasing them by any province law; begreat and valuable fisheries of whale and cod, cause such law, if made, would immediately by which large remittances can be made. be repealed here, as prejudicial to the trade They are four distinct governments; but and interest of Britain. It seems hard therehaving much mutual intercourse of dealings, fore, to draw all their real money from them, the money of each used to pass current in all: and then refuse them the poor privilege of but the whole of this common currency not using paper instead of it. Bank bills and being under one common direction, was not bankers' notes are daily used here as a medium so easily kept within due bounds: the prudent of trade, and in large dealings perhaps the reserve of one colony in its emissions being greater part is transacted by their means; rendered useless by excess in another. The and yet they have no intrinsic value, but rest Massachusetts, therefore, were not dissatisfied on the credit of those that issue them; as with the restraint, as it restrained their neigh-paper-bills in the colonies do on the credit of bours as well as themselves; and perhaps they the respective governments there. Their be do not desire to have the act repealed. They ing payable in cash upon sight by the drawhave not yet felt much inconvenience from it; er is indeed a circumstance that cannot attend as they were enabled to abolish their paper- the colony bills, for the reason just abovecurrency, by a large sum in silver from Bri- mentioned; their cash being drawn from them tain to reimburse their expenses in taking by the British trade: but the legal tender Louisbourg, which, with the gold brought being substituted in its place, is rather a from Portugal, by means of their fish, kept greater advantage to the possessor; since he them supplied with a currency; till the late need not be at the trouble of going to a parwar furnished them and all America with bills ticular bank or banker to demand the money, of exchange; so that little cash was needed finding (wherever he has occasion to lay out for remittance. Their fisheries too furnish money in the province) a person that is obligthem with remittance through Spain and Por-ed to take the bills. So that even out of the tugal to England; which enables them the more easily to retain gold and silver in their country. The middle colonies have not this advantage; nor have they tobacco; which in Virginia and Maryland answers the same purpose. When colonies are so different in their circumstances, a regulation, that is not inconvenient to one or a few, may be very much so to the rest. But the pay is now become so indifferent in New England, at least in some of its provinces, through the want of currency, that the trade thither is at present under great discouragement.

The 4th reason is, "That every medium of trade should have an intrinsic value; which paper-money has not. Gold and silver are therefore the fittest for this medium, as they are an equivalent; which paper never can be. However fit a particular thing may be for a particular purpose; wherever that thing is not to be had, or not to be had in sufficient quantity; it becomes necessary to use something else, the fittest that can be got, in lieu of it. Gold and silver are not the produce of North America, which has no mines; and that which is brought thither cannot be kept there in sufficient quantity for a currency. Britain, an independent great state, when its inhabitants grow too fond of the expensive luxuries of foreign countries, that draw away its money, can, and frequently does, make laws to discourage or prohibit such importations; and by that means can retain its cash. The colonies are dependent governments; and their people having naturally great respect for the sovereign country, and being thence

province, the knowledge, that every man within that province is obliged to take its money, gives the bills credit among its neighbours, nearly equal to what they have at home.

And were it not for the laws here, that restrain or prohibit as much as possible all losing trades, the cash of this country would soon be exported: every merchant, who had occasion to remit it, would run to the bank with all its bills, that came into his hands, and take out his part of its treasure for that purpose; so that in a short time, it would be no more able to pay bills in money upon sight, than it is now in the power of a colony treasury so to do. And if government afterwards should have occasion for the credit of the bank, it must of necessity make its bills a legal tender; funding them however on taxes which they may in time be paid off; as has been the general practice in the colonies.-At this very time, even the silver-money in England is obliged to the legal tender for part of its value; that part which is the difference between its real weight and its denomination. Great part of the shillings and sixpences now current are, by wearing become five, ten, twenty, and some of the sixpences even fifty per cent. too light. For this difference between the real and the nominal, you have no intrinsic value; you have not so much as paper, you have nothing. It is the legal tender, with the knowledge that it can easily be repassed for the same value, that makes threepennyworth of silver pass for sixpence. Gold and silver have undoubtedly some properties that give them a fitness above paper, as a

medium of exchange: particularly their uni- be considered as a depreciation of the values versal estimation; especially in cases where of whatever remains in the country; then the a country has occasion to carry its money rising of silver above paper to that height of abroad, either as a stock to trade with, or to additional value, which its capability of exportpurchase allies and foreign succours. Other- ation only gave it, may be called a depreciawise, that very universal estimation is an in- tion of the paper. Even here, as bullion has convenience, which paper-money is free from; been wanted or not wanted for exportation, since it tends to deprive a country of even the its price has varied from 5s. 2d. to 5s. 8d. per quantity of currency that should be retained ounce. This is near 10 per cent. But was as a necessary instrument of its internal com- it ever said or thought on such an occasion, merce, and obliges it to be continually on its that all the bank bills, and all the coined silguard in making and executing, at a great ex-ver, and all the gold in the kingdom, were depense, the laws that are to prevent the trade preciated 10 per cent? Coined silver is now which exports it-Paper-money well funded wanted here for change, and 1 per cent. is has another great advantage over gold and given for it by some bankers: are gold and silver; its lightness of carriage, and the little bank notes therefore depreciated 1 per cent.? room that is occupied by a great sum; where- The fact in the middle colonies is really this: by it is capable of being more easily, and more on the emission of the first paper-money, a safely, because more privately, conveyed from difference soon arose between that and silver; place to place. Gold and silver are not in- the latter having a property the former had trinsically of equal value with iron, a metal not, a property always in demand in the coloin itself capable of many more beneficial uses nies; to wit, its being fit for a remittance. to mankind. Their value rests chiefly in the This property having soon found its value, by estimation they happen to be in among the the merchants bidding on one another for it, generality of nations, and the credit given to and a dollar thereby coming to be rated at 8s. the opinion, that that estimation will continue. in paper-money of New York, and 7s, 6d. in Otherwise a pound of gold would not be a paper of Pennsylvania, it has continued unireal equivalent for even a bushel of wheat. formly at those rates in both provinces now Any other well-founded credit, is as much an near forty years, without any variation upon equivalent as gold and silver; and in some new emissions; though, in Pennsylvania, the cases more so, or it would not be preferred paper-currency has at times increased from by commercial people in different countries. 15,000l. the first sum, to 600,000l. or near it. Not to mention again our own bank bills; Nor has any alteration been occasioned by the Holland, which understands the value of cash paper-money, in the price of the necessaries as well as any people in the world, would of life, when compared with silver: they have never part with gold and silver for credit (as been for the greatest part of the time no higher they do when they put it into their bank, than before it was emitted; varying only by from whence little of it is ever afterwards plenty and scarcity, or by a less or greater drawn out) if they did not think and find the foreign demand. It has indeed been usual credit a full equivalent. with the adversaries of a paper-currency, to call every rise of exchange with London, a depreciation of the paper: but this notion appears to be by no means just: for if the paper purchases every thing but bills of exchange, at the former rate, and these bills are not above one tenth of what is employed in purchases; then it may be more properly and truly said, that the exchange has risen, than that the paper has depreciated. And as a proof of this, it is a certain fact, that whenever in those colonies bills of exchange have been dearer, the purchaser has been constantly obliged to give more in silver, as well as in paper, for them; the silver having gone hand in hand with the paper at the rate above-mentioned; and therefore it might as well have been said, that the silver was depreciated.

The fifth reason is, "That debtors in the assemblies make paper-money with fraudulent views." This is often said by the adversaries of paper-money, and if it has been the case in any particular colony, that colony should, on proof of the fact, be duly punished. This, however, would be no reason for punishing other colonies, who have not so abused their legislative powers. To deprive all the colonies of the convenience of paper-money, because it has been charged on some of them, that they have made it an instrument of fraud, as if all the India, bank, and other stocks and trading companies were to be abolished, because there have been, once in an age, Mississippi and South-sea schemes and bubbles.

The sixth and last reason is, "That in the middle colonies, where the paper-money has been best supported, the bills have never kept to their nominal value in circulation; but have constantly depreciated to a certain degree, whenever the quantity has been increased." If the rising of the value of any parti cular commodity wanted for exportation, is to

There have been several different schemes for furnishing the colonies with paper-money, that should not be a legal tender, viz.

1. To form a bank, in imitation of the bank of England, with a sufficient stock of cash to pay the bills on sight.

This has been often proposed, but appears

impracticable, under the present circumstances of the colony-trade; which, as is said above, draws all the cash to Britain, and would soon strip the bank.

2. To raise a fund by some yearly tar, securely lodged in the bank of England as it arises, which should (during the term of years for which the paper-bills are to be current) accumulate to a sum sufficient to discharge them all at their original value.

of commerce) is in a great measure, if not totally defeated.

On the whole, no method has hitherto been formed to establish a medium of trade, in lieu of money, equal in all its advantages, to bills of credit-funded on sufficient taxes for discharging it, or on land-security of double the value, for repaying it at the end of the term; and in the mean time, made a GENERAL LE

GAL TENDER.

On Coin.

the beginning of his majesty's reign to give the public some reflections on coin in general; on gold and silver as merchandise: and I added my thoughts on paper passing as money.

This has been tried in Maryland: and the bills so funded were issued without being made a general legal tender. The event was, that as notes payable in time are naturally subject to a discount proportioned to the time; so THE clamour made of the great inconvenithese bills fell at the beginning of the term ences, suffered by the community in regard so low, as that twenty pounds of them became to the coin of this kingdom, prompted me in worth no more than twelve pounds in Pennsylvania, the next neighbouring province; though both had been struck near the same time at the same nominal value, but the latter was supported by the general legal tender. The Maryland bills, however, began to rise as the term shortened, and towards the end recovered their full value. But, as a depreciating currency injures creditors, this injured debtors; and by its continually changing value, appears unfit for the purpose of money, which should be as fixed as possible in its own value; because it is to be the measure of the value of other things.

3. To make the bills carry an interest sufficient to support their value.

This too has been tried in some of the New England colonies; but great inconveniences were found to attend it. The bills, to fit them for a currency, are made of various denominations, and some very low, for the sake of change; there are of them from 101. down to 3d. When they first come abroad, they pass easily, and answer the purpose well enough for a few months; but as soon as the interest becomes worth computing, the calculation of it on every little bill in a sum between the dealer and his customers, in shops, warehouses, and markets, takes up much time, to the great hinderance of business. This evil, however, soon gave place to a worse; for the bills were in a short time gathered up and hoarded; it being a very tempting advantage to have money bearing interest, and the principle all the while in a man's power, ready for bargains that may offer; which money out on mortgage is not. By this means numbers of people became usurers with small sums, who could not have found persons to take such sums of them upon interest, giving good security; and would therefore not have thought of it; but would rather have employed the money in some business, if it had been money of the common kind. Thus trade, instead of being increased by such bills, is diminished; and by their being shut up in chests, the very end of making them (viz. to furnish a medium

As I trust the principles then laid down are founded in truth, and will serve now as well as then, though made fourteen years ago, to change any calculation, would be of little use.

Some sections, in the foregoing essay of principles of trade, might in this appendix, appear like a repetition, have been omitted.

I always resolved not to enter into any particular deduction from laws relating to coin; or into any minutia, as to accurate nicety, in weights. My intention was, and still is, no more than to endeavour to show, as briefly as possible; that what relates to coin, is not of such a complex, abstruse nature as it is generally made: and that no more than common justice with common sense are required, in all regulations concerning it.

Perhaps more weighty concerns may have prevented government doing more in regard to coin, than ordering quarter guineas to be made; ch till this reign had not been

done.

But a how judge by the late acts relating to gold coin, that the legislature is roused: possibly they may consider still more of that, as well as of silver coin.

Should these reflections prove of any public utility, my end will be answered.

1. Coins are pieces of metal, on which an impression is struck; which impression is understood by the legislature to ascertain the weight, and the intrinsic value, or worth of each piece.

2. The real value of coins depends not on a piece being called a guinea, a crown, or a shilling; but the true worth of any particular piece of gold, or silver, is what such piece contains of fine or pure gold or silver.

3. Silver and copper being mixed with gold, and copper with silver, are generally understood, to render those metals more

durable when circulating in coins: yet air and moisture evidently affect copper, whether by itself or mixed with other metal; whereas pure gold or silver are much less affected or corroded thereby.

ture.

4. The quantity of silver and copper so mixed by way of alloy, is fixed by the legislaWhen melted with pure metal, or added, or extracted to make a lawful proportion, both gold and silver are brought to what is called standard. This alloy of silver and copper is never reckoned of any value. The standard once fixed, should ever be invariable; since any alteration would be followed by great confusion, and detriment to the state.

5. It is for public convenience, and for facilitating the bartering between mankind for their respective wants, that coins were invented and made; for were there no coins, gold and silver might be made, or left pure; | and what we now call a guinea's worth of any thing, might be cut off from gold, and a crown's worth from silver, and might serve, though not so commodiously as coin.

6. Hence it is evident that in whatever shape, form, or quality, these metals are, they | are brought to be the most common measure between man and man, as serving to barter against, or exchange for, all kinds of commodities; and consequently are no more than an universal accepted merchandise: for gold and silver in bullion, that is to say in an uncoined mass, and gold or silver in coin, being of equal | weight, purity, and fineness, must be of equal value, the one to the other : for the stamp on | either of these metals, duly proportioned, neither adds to, nor takes from their intrinsic value?

7. The prices of gold and silver as merchandise, must in all countries, like other commodities, fluctuate and vary according to the demand; and no detriment can arise therefrom, more than from the rise and fall of any other merchandise. But if when coined due proportion of these metals, the one t other, be not established, the disproport will be felt and proved; and that metal wherein the excess in the proportion is allowed, will preferably be made use of, either in exportation, or in manufacture; as is the case now, in this kingdom, in regard to silver coin, and which, in some measure, is the occasion of its scarcity. For so long as 15 ounces and about one fifth of pure silver in Great Britain, are ordained, and deemed, to be equal to 1 ounce of pure gold, whilst in neighbouring states, as France and Holland, the proportion is fixed only 14 and a half ounces of pure silver, to one ounce of pure gold; it is very evident, that our silver when coined, will always be the most acceptable merchandise, by near five in the hundred, and consequently more liable to be taken away, or melted down, than before it received the impression at the mint.

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8.62 shilling's only, are ordained by law to be coined from 12 ounces of standard silver: now following the proportion above mentioned of 15 one fifth to 14 one half, no regard being necessary as to alloy, 65 shillings should be the quantity cut out of those 12 ounces.

9. No everlasting invariable fixation for coining, can be made from a medium of the market price of gold and silver, though that medium might with ease be ascertained so as to hinder, either coined gold or silver from becoming a merchandise: for whenever the price shall rise above that medium, so as to give a profit; whatever is coined will be made a merchandise. This in the nature of things, must come from the general exchangings, circulation, and fluctuation in trade, and cannot be hindered; but assuredly the false proportions may be amended by the legislature, and settled as the proportion between gold and silver is in other nations; so as not to make, as now is the case, our coined silver a merchandise, so much to be preferred to the same silver uncoined.

10. What has been said seems to be selfevident; but the following calculations made on the present current price of silver and gold, may serve to prove beyond all doubt, that the proportion now fixed between gold and silver should be altered and fixed as in other countries.

By law, 62 shillings are to be coined out of one pound, or 12 ounces of standard silver. This is 62 pence an ounce. Melt these 62 shillings, and in a bar, this pound weight at market will fetch 68 pence an ounce, or 68 shillings the pound. The difference therefore between coined and uncoined silver in Great Britain is now nine and two thirds per cent.

Out of a pound or 12 ounces of standard gold, 44 guineas and are ordained to be coined. This is 31. 17s. 104d. an ounce. Now the current market price of standard gelu is 31. 19s. an ounce, which makes not quite 1 per cent. difference between the coined and uncoined gold.

The state, out of duties imposed, pays for the charge of coining, as indeed it ought : for it is for public convenience, as already said, that coins are made. It is the current market price of gold and silver, that must govern the carrying it to the mint. It is absurd to think any one should send gold to be coined that should cost more than 31. 17s. 104d. an ounce, or silver more than 62 pence the ounce : and, as absurd would it be, to pretend, that those prices only shall be the constant invariable prices. It is contended that there is not a proper proportion fixed in the value of one metal to another, and this requires alteration.

11. It may be urged, that should the legislature fix the proportion of silver to gold as in other countries, by ordering 65 shillings instead of 62 to be cut out of a pound of stand

ard silver; yet still there would be 4 per | in bullion or in coin, is a very narrow princent. difference between coined and uncoin- ciple; all the republics we know of, wisely ed silver; whereas there is but about 1 per think otherwise. It is an utter impossibility; cent. difference in gold. nor should it ever be aimed at; for gold and silver are as clearly a merchandise, as lead and tin; and consequently should have a perfect freedom and liberty,* coined and uncoined, to go and to come, pass and repass, from one country to another, in the general circulation and fluctuation of commerce, which will ever carry a general balance with it: for we should as soon give our lead, our tin, or any other product of our land or industry to those who want them, without an equivalent in some shape or other, as we should gold or silver; which it would be absurd to imagine can ever be done by our nation, or by any nation upon earth.

On this we shall observe that the course of trade, not to mention extraordinary accidents, will make one metal more in request at one time than another; and the legislature in no one particular country, can bias, or prescribe rules or laws to influence, such demand; which ever must depend on the great chain of things, in which all the operations of this world are linked. Freedom and security only are wanted in trade: nor does coin require more, if a just proportion in the metals be settled.

12. To return to gold: it is matter of surprise, that the division of the piece called a guinea, has not been made smaller than just one half, as it now is; that is into quarters, thirds, and two thirds. Hereby the want of silver coin might be greatly provided for; and those pieces, together with the light silver coin, which can only now remain with us, would sufficiently serve the uses in circulation. In Portugal, where almost all their coin is gold, there are divisions of the moedas, or 27 shilling pieces, into tenths, sixths, quarters, thirds, halves, and two thirds. Of the moeda and one third, or 36 shilling piece, into eights, quarters, and halves.

13. That to the lightness of the silver coin now remaining in Great Britain, we owe all the silver coin we now have, any person with weights and scales, may prove; as upwards of 70 shillings coined in the reign of king William, or dexterously counterfeited by false coiners, will scarce weigh 12 ounces, or a pound troy.

14. All the art of man can never hinder a constant exportation and importation of gold and silver, to make up for the different calls and balances that may happen in trade for were silver to be coined as above, 65 shillings out of a pound troy weight of standard silver; if those 65 shillings would sell at a price that makes it worth while to melt or export them, they must and will be considered and used as merchandise and the same will hold as to gold.

16. From Spain and Portugal come the greatest part of gold and silver: and the Spanish court very wisely permits the exportation of it on paying a duty, as in great Britain lead and tin do, when exported; whereas heretofore, and as it still continues in Portugal, penal laws were enacted against the sending it out of the country. Surely princes by enacting such laws, could not think they had it in their power to decree and establish that their subjects, or themselves, should not give an equivalent for what was furnished to them!

17. It is not our intention to descend into, or to discuss minutely, particular notions or systems, such as " That silver, and not gold should be the standard money or coin."

"That copper is an unfit material for money."

And "That paper circulating as, and called artificial money is detrimental.”

Yet as these doctrines seem to proceed from considering bullion, and money, or coin, in a different light from what we apprehend and have laid down, we will observe,

18. That it matters not whether silver or gold be called standard money; but it seems most rational, that the most scarce, and precious metal, should be the unit or standard.

19. That as to copper, it is as fit for money or a counter, as gold and 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 exchanges between man and man.

Though the proportion of about 143 of pure silver, to one of pure gold, in neighbouring states be now fixed, in regard to their coin, 20. That as to paper money, it is far from beand it is submitted such proportion should be ing detrimental; on the contrary, it is highly attended to in this kingdom, yet that propor-profitable, as its quick passing between mantion may be subject to alteration for this plain reason, that should the silver mines produce a quantity of that metal so as to make it greatly abound more in proportion than it now does, and the gold mines produce no more than now they do, more silver must be requisite to purchase gold.

15. That the welfare of any state depends on its keeping all its gold and silver, either

*As a general principle this is unquestionably true; but it must be general, or every nation with whom commerce is extensively carried on, must alike adopt it, or the principle immediately assumes an exceptionable character; and nations liable to be effected by it must provide means to counteract the effects of a sudden drain

of the usual circulating medium, because the absence of a great quantity of the medium alters the price of ex

change, of labour, goods, wages, rents, and the relative exchange of current money, subsistence; and depreciates all other property.