Chapter XXIX: Introduction (3)

[Sidenote: which shews that the standard has been debased,]

The moment a state pronounces a certain quantity of gold to be worth a certain quantity of silver, and orders these respective quantities of each metal to be received as equivalents of each other, and as lawful money in payments, that moment gold is made a standard as much as silver. If therefore too small a quantity of gold be ordered or permitted to be considered as an equivalent for the unit, the silver standard is from that moment debased; or indeed more properly speaking, all silver money is from that moment proscribed; for who, from that time, will ever pay in silver, when he can pay cheaper in gold? Gold, therefore, by such a law is made the standard, and all declarations to the contrary are against the matter of fact.

[Sidenote: and that the preserving it where it is, is no new
debasement.]

Were the King, therefore, to coin silver at 65 shillings in the pound, it is demonstration _that by such an act_ he would commit no adulteration upon the standard: the adulteration is already committed. The standard has descended to where it is, by slow degrees, and by the operation of political causes only, and nothing prevents it from falling lower, but the standard of the gold coin. Let guineas be now left to seek their value as they did formerly, and let light silver continue to go by tale, we shall see the guineas up at 30 shillings in 20 years time, as was the case in 1695.

[Sidenote: Proof that the standard has been debased by law,]

It is as absurd to say that the standard of Queen Elizabeth has not been debased by enacting, that the English unit shall be acquited with 113 grains of fine gold, as it would be to affirm that it would not be debased from what it is at present, by enacting, That a pound of butter should every where be received in payment for a pound sterling; although the pound sterling should continue to consist of 3 ounces, 17 penny weights, and 10 grains of standard silver, according to the statute of the 43 Elizabeth. I believe in that case most debtors would pay in butter, and silver would, as at present, acquire a conventional value as a metal, but would be looked upon no longer as a standard, or as money.

If therefore, by the law of England, a pound sterling must consist of 1718.7 grains troy of fine silver, by the law of England also, 113 grains of gold must be of the same value, but no law can establish that proportion; consequently, in which ever way a reformation be brought about, some law must be reversed; consequently, expediency, and not compliance with law, must be the motive in reforming the abuse.

[Sidenote: and is at present reduced to the value of the gold.]

From what has been said, it is not at all surprising that the pound sterling should in fact be reduced nearly to the value of the gold. Whether it ought to be kept at that value is another question; and shall be examined in its proper place. All that we here decide, is, that coining the pound troy into 65 shillings would restore the proportion of the metals, and render both species common in circulation. But restoring the weight and proportion of the coin is not the difficulty, as I conjecture, which prevents a reformation of the English coinage.

I have dwelt longer, perhaps, than what was necessary upon this estimation of the present value of the pound sterling, and in setting the matter in different lights, have been forced into repetitions. The importance of that point in the present inquiry must plead my excuse.

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CHAP. IX.
_Historical account of the Variations of the British Coin._

[Sidenote: Purport of this treatise not to dictate, but to
inquire]

The whole purport of this part of my inquiry, is, to examine and investigate the principles relating to money; to range them in order, and to render them easily applicable to any combination of circumstances which may occur. If I have applied my reasoning to the state of the British coin, it has been with no intention to erect myself as a judge of the interests of that nation, or with a design to point out to them what measure is the most expedient to be followed. I am a stranger to the true state of the question, and I reason only upon suppositions, not from exact information; upon this footing I intend to proceed.

I shall take a view of every scheme which I think may be proposed as a remedy against the disorder, and examine all the consequences which can result from each, according to the influence of the different principles under which they fall. _Circumstances hid_ from me will nevertheless work their full effect, and may render the best deduced principles quite delusive, when, without attending to _them_, we pretend to draw conclusions.

[Sidenote: how the disorder in the coin may be remedied without
inconveniences,]

We have examined the nature of the disorder of the coin of Great Britain, and such it certainly is, as demands some reformation. A nation so justly renowned for knowledge, so thoroughly versed in the arts of commerce, and so expert in every matter of calculation, cannot be supposed to be at any loss for a method to remove the cause of the disorder. The question is not, therefore, how to fix the standard, how to restore the proportion between the metals in the coin, nor how to render all the current money of its just weight. But the question is, how to execute this without incurring greater inconveniences than those at present felt.

If the smallest change should be made upon the present value of the pound sterling, the operation is arbitrary; and those who either advise it or execute it, would be answerable for every consequence. If the consequences should prove salutary to the nation, the projector will meet with applause; but if they should be attended with injustice, he will merit blame; if with perplexity and confusion, he may very possibly never see himself approved of.

The present disorder has proceeded from neglect on the part of government; a neglect however which admits of an apology, for reasons afterwards to be assigned. When an abuse creeps in by degrees, no particular person can be charged with it: when it is to be corrected, some person or other must undertake the work; and few are found who incline to be volunteers in the service of the public, upon an occasion where the interest of the nation is not clear and evident.

[Sidenote: by making the nation itself choose the remedy.]

The best way therefore to accomplish such a work, is, to put it into the hands of the nation itself. When the people are fully instructed in the matter, when the state of the question is laid before them in a clear light, and stripped of all money-jargon, they will see the natural consequences of every innovation; and when they have well considered of them, they may resolve whether they will keep the pound sterling they have, or whether they will take another.

[Sidenote: If the present standard is departed from, every other
to be pitched upon is arbitrary.]

The question to be determined, is, what the weight of the pound sterling now is, and what it ought to be. If it be made different from what it is at present, that operation must be conducted with justice and impartiality. If a new standard is to be pitched upon, the choice is quite arbitrary, as has been said; and were any weight to be preferred to another, the best of any, no doubt, would be the pound troy of standard silver. This was the pound sterling for many ages, and the most that can be said for Queen Elizabeth’s act, is, that it is the last _deliberate_ adulteration by law of the English coin.

The next question is, how to conduct that operation so as to do justice to every man in the nation in contracts already entred into; how to do justice to the creditors of Great Britain; how to do justice to Great Britain with respect to her creditors; how to do all this, I say, and at the same time to make an innovation upon the present state of the coin.

[Sidenote: People imagine the present standard is the same with
that of Queen Elizabeth.]

Debasing the standard is odious in the opinion of every mortal; and it seems also to be the opinion of many, that every regulation which shall not carry the value of a pound sterling, to the value of the silver appointed to enter into it by the statute of Queen Elizabeth, is a debasing of it from what it is at present.

In order to cast more light upon the historical part of the English coinage, I shall here lay together some short observations upon the state of that question from the reformation to the present time.

[Sidenote: Debasements of the standard during the reformation.]

Henry VIII. and Edward VI. during the violent convulsions of the reformation, so sophisticated the fineness of the coin, and so curtailed the weight of it, that all proportion of value was lost.

[Sidenote: Raised by Edward VI.]

This run the whole nation into inextricable confusion, and forced the ministers of the young King Edward, in 1552, to restore the purity of the metals, and to raise the weight of the coin in the pound sterling, from 220 grains troy of fine silver, to which it was then debased, to 1884. Mary reduced it to 1880 grains, at which it stood during her reign. [Sidenote: Debased by Elizabeth.] From this Elizabeth raised it in the second year of her reign to 1888 grains; and in the 43d she passed the famous statute by which it was debased to 1718.7, the present legal silver standard. [Sidenote: Supported by her successors,] During the reign of James I. trade began to take root in England; and this pointed out the necessity of preserving the standard of their money invariable. The confusions occasioned by the former adulterations left a strong impression on the minds of the English nation in the succeeding reigns, a statute which had been preserved without alteration for many years acquired in time great authority, and the standard continued constantly attached to the silver. Gold was occasionally coined; but circulated only under a conventional value, and was not made a legal money. The interests of trade at last required a more extensive circulation, and King Charles II. when he first coined guineas, determined a value for their currency, in order to compass that end: but very well observing that without fixing the gold at a price below its true proportion to the silver, there was no possibility of preventing it from becoming also a standard for the pound sterling, and thereby introducing a confusion, the guinea was valued no higher than 20 shillings, and allowed to find its own value above that price.

The guinea accordingly fluctuated in its value; sometimes at 22 shillings, which marks the proportion of the metals at 1 to 15.84, sometimes at 21_s._ 6_d._ which marks the proportion at 1 to 15.6, at last at 21 shillings, which marks the proportion as 1 to 15.2, and now it is worth no more than its original statute value, to wit, 20 shillings, which marks the proportion as 1 to 14.5. These conversions are formed upon the supposition, that in all the variations the shillings are of the statute weight, and that the guinea circulated according to the market proportion of the metals; two circumstances which are by no means to be depended on.

[Sidenote: until it was debased by the clipping after the
revolution.]

About the time of the revolution, silver money had begun to be coined with the wheel, or fly-press, (which prevented the frauds to which coin was formerly exposed from clipping and washing) and then the custom of weighing the current money went into disuse. But as at that time there were still great quantities of the hammered money remaining, the clippers profited of the inattention of the public, and fell to work with the hammered money. The consequence of this was, that those who were obliged to pay, paid in clipped money; the value of the pound sterling fell to the rate of the then currency; all weighty coin was locked up or melted down; the guineas rose to 30 shillings, and 100_l._ sterling, which in silver ought to weigh above 32 pounds troy, did not commonly exceed one half.

The kingdom at this time was involved in a war, and was annually obliged to borrow large sums, paid in those pounds sterling currency, which were worth no more than 2⁄3 of a guinea, or 14 shillings of such currency as the present of 65 to the pound troy. This is evident, since the guinea was then worth 30 shillings, or 1½ pound sterling; and that at present it is worth 21 shillings of 65 to the pound troy.

[Sidenote: Lowndes’s scheme refuted by Locke, the standard raised
to that of Elizabeth, and the consequences of that measure.]

Lowndes contended strongly for having the pound sterling reduced 20 _per cent._ Locke insisted upon the old standard of Queen Elizabeth: the latter carried his point. A new coinage was made in 1695, and the government acquitted a great part of the debts they had contracted from the revolution (which had been paid them at the value of between ten and fourteen shillings present currency) at the rate of 20 shillings of the standard of Queen Elizabeth. This is the matter of fact: whether this was doing justice to the nation, I leave every man to determine. It must not however be believed that there was no reason for this extraordinary step. By the raising of the standard, the state gained considerably upon the score of taxes, as well as the creditors upon their capitals and interest; and the nation, which was the principal loser, was pleased; because their standard was not debased: thus all the three parties were satisfied.

Upon this coinage in 1695, the coin was once more set upon a solid footing: all money was of weight, and the pound was rightly attached to the silver standard. Upon that footing it remained, until the guinea was made a legal coin, and fixed at its then supposed intrinsic worth: here is the æra of the present confusion.

[Sidenote: Silver has been rising from the beginning of this
century.]

From the beginning of this century, silver has been rising in its price. In 1709, the French found it as 1 to 15, in the great coinage, by edict of the month of May; and so early as 1726, they found the proportion to be nearly as 1 to 14½, and fixed their coinage accordingly.

[Sidenote: The English standard has been debased by law, since
1726.]

We may therefore conclude, that from 1726, at least, if not several years before, a pound sterling ought to have been worth at least 118½ grains troy of fine gold, according to the proportion of the silver standard; and yet from the inattention of government, it has constantly been suffered to be acquitted with 113. Has not this been a plain debasement of the standard for near 40 years, which we can ascertain? If it is at this time restored to where it was, will not that be raising it from what it is at present?

[Sidenote: The trading interest chiefly to be blamed for this
neglect.]

We have seen, from a deduction of the plainest principles, the utter impossibility of keeping an unit, which ought to be invariable, attached at once to the two metals, which are constantly varying between themselves. To this the state has not attended, nor has it probably been sufficiently informed of it, by those who were most capable, but least interested to point out the consequences.

[Sidenote: Debasing the standard chiefly affects permanent
contracts,]

The variations of the standard affect chiefly those who are engaged in permanent contracts, which is not the case of trading men: the obligations they contract are in a perpetual fluctuation, and by the assistance of their pen, they avoid the inconveniences which other people, who do not calculate, are liable to.

The rising of the value of silver has been all along advantageous to this class; and it would be still more advantageous to them were government to allow guineas at this time to seek their own value; as we shall observe in its proper place. Every thing which tends gradually and insensibly to debase the value of the money unit, and promote confusion, is advantageous to merchants. When this debasement proceeds by slow degrees, it is not to be discovered but by foreign exchange; _because at home there is no invariable standard for money, as there is for every other kind of measure_. This shall be proved.

The unit therefore being solely attached to the coin, must vary as it does.

[Sidenote: and prevents prices from rising as they should do.]

Now the value of the coin has varied imperceptibly; and this is the reason why people imagine that such variations or debasements of the standard are not of great consequence. The greatest mistake any person can labour under! By this imperceptible debasement, prices do not rise as they ought to do; the ignorant, and those who do not perceive the gradual diminution, keep to the same nominal prices as formerly, and the merchants profit in the mean time. Is not this sacrificing the interest of all the people of England to that of the trading part of it?

The competition between the merchants betrays the secret to the multitude from time to time; but they ascribe the appearances to a wrong cause; they think every thing is growing dearer, whereas the reason is, that price (i. e. coin) is growing lighter: and as this disorder is always going on, the merchants, being the first informed of the progress of the decline of the value of the coin, must constantly be in the way to profit of the ignorance of those who have not the opportunity of measuring the value of the coin they receive by any standard measure.

This being the case, it is no wonder that the trading part of the nation has not informed government of a disorder which has brought, by slow degrees, the pound sterling to about 95 _per cent._ of its former value. This is a short review of the vicissitudes of the English coin from the reformation to this day: and it is at the same time an apology for the neglect of the British administration in a matter of so great consequence.

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CHAP. X.
_Of the disorder of the British Coin, so far as it affects the
Circulation of Gold and Silver Coin; and of the Consequences of reducing
Guineas to Twenty Shillings._

I must now take notice of the inconveniences which this disorder has occasioned to the public, and of the consequences which might follow upon adopting the remedy proposed[U] for removing it, to wit, by fixing the currency of guineas at 20 shillings, without recoining the silver at the standard of Elizabeth.

Footnote U:

By Mr. Harris, in his _Essay on Money and Coins_.

[Sidenote: Why silver coin is so scarce.]

The great inconvenience felt by the public is the scarcity of silver coin, occasioned by the disproportion of the metals. No mortal will ever, as matters stand, carry silver to be coined; that which is worn by circulation, is not sufficient, even for changing gold, much less for all those small payments which, in the course of business, are absolutely necessary. This being the case, all considerable payments must be made in guineas; and as there are great numbers of these already become light by use, all the weighty are picked up, and either exported, or perhaps frequently melted down: so that, in general, the current specie of England is not sufficient for the occasions of the nation.

[Sidenote: Consequences of fixing the guinea at 20 shillings, with
regard to circulation,]

The great scarcity of silver coin in England, being evidently occasioned by the disproportion between the metals in the coin, it has been proposed to remedy that disorder all at once, by crying down the value of guineas to 20 shillings, without making a new coinage, or taking any measures for preventing the horrid consequences which would follow upon such a step, as matters stand at present. Whoever inclines to read all that may be said in favour of this operation, may consult Mr. Harris’s _Essay upon Money and Coins_, Part II. p. 84. et seq.

My intention is not to refute the sentiments of particular people, but to trace out the principles I have laid down, and to apply them to the removing such objections as I think either plausible in themselves, or which may appear plausible to people who do not thoroughly understand those matters.

I shall then, in the first place, examine what consequence this bringing down the legal currency of guineas to 20 shillings would have upon common voluntary circulation; that is to say, buying and selling, abstracting from unvoluntary circulation which takes place when people are about to pay, or acquit obligations; two things totally different in themselves, and which ought carefully to be set asunder.

[Sidenote: will make coin disappear altogether.]

The consequences of reducing guineas to 20 shillings, without a re-coinage of the silver, will be, 1. To fix the standard of the pound sterling to the mean proportion of the worn out silver money in present currency. 2. To make the light guineas, which are below the value of 20 old shillings, to pass by tale for pounds sterling; though intrinsically not worth the new guineas. 3. To occasion the melting down of all the new guineas. And 4. When once the coin is brought to consist of nothing but old unequal pieces, to occasion the heaviest of these to be melted down in their turn, until at last coin must disappear altogether.

If to supply specie, government shall send silver or gold to be coined at the mint at the legal standard, the moment it appears, the old shillings and the light gold will buy it up, and it will be thrown into the melting pot. This will stop even the melting down of the more weighty pieces of the old specie; because (by this trade) they will become more valuable; since in currency they will be an equivalent for the new specie of full standard weight. No private person surely will carry either of the metals to the mint, because there they would receive but 62 shillings or 44½ guineas for their troy pound of the respective metals, whereas in the market they will get a greater number of old shillings and guineas to buy, weight for weight, which will serve the same purpose in circulation.

[Sidenote: How light shillings are bought by weight.]

Let not my reader laugh at the scheme of buying old shillings at the market by weight. The thing is done every day. For whether I sell my silver bullion for 65 shillings _per_ pound (paid in shillings, guineas, or bank-notes) or buy old shillings weight for weight, it is quite the same thing. The reason why people do not sell the old shillings by the pound, is only because they are not all of the same weight, although they be all of the same value in circulation; but they sell their bullion, as it were, against old worn shillings reduced to a mean proportion of value; which sale of bullion is virtually buying old shillings at market by weight. A man, therefore, who can with a pound of silver bullion buy the value of 65 old shillings, will certainly never employ it to buy 62 heavy ones from the mint, which are no where worth more, except in the melting pot. The same is true of the gold.

[Sidenote: Consequences as to circulation with merchants and
bankers.]

I have endeavoured to shew by the plainest arguments, that no silver coin, the value of which is above the value of any other currency within the kingdom, can remain in circulation, or can escape the money-jobber and the melting pot. I think this is a point pretty well agreed on all hands; because it is the argument made use of against those who propose to introduce shillings of base metal into circulation, as an expedient for procuring change for the gold: a scheme so entirely repugnant to all the principles of money, that I have taken no notice of it.

[Sidenote: That guineas would still pass current for 21
shillings:]

If, therefore, it be true, that the shillings are really worth no more than 1⁄21 of a guinea, what effect would the law, reducing guineas to 20 shillings, have as to merchants? Guineas would pass as before with every banker in London for 21 shillings, and 21 shillings for a guinea.

[Sidenote: That the standard would be affixed to the light silver,
as it was in 1695:]

But as we suppose no new coinage set on foot, and that the light silver would continue to pass current by tale, as at present, what security would there be for the pound sterling not falling every year lower? The standard would then be entirely affixed to the old silver; and no man would pay in guineas at 20 shillings, any more than he will now pay in silver of standard weight. The only expedient then to obtain coin would be, to allow guineas to seek their own value. Upon this they would rise to 21 shillings, which is their intrinsic worth. In this case, would not the shillings, by becoming lighter, become of less value in proportion to the guinea? Was not this the case 1695? Did not this abuse raise the price of guineas, and proportionally debase the worth of the pound sterling?

[Sidenote: That merchants would gain by it;]

As every thing, therefore, which gradually debases the standard, must be advantageous to those who can avail themselves of it, so the making gold a merchandize, while the bulk of the nation has no standard to measure it with, must be advantageous to those who have a sure one, to wit, the foreign exchange.

[Sidenote: debtors would be ruined.]

Besides the evident tendency such a measure would have to debase the standard, below the present value, it would be accompanied with the most ruinous consequences to all the class of debtors. I shall beg leave to state an example. A person is debtor, I shall suppose, for a great sum, 100,000_l._ his creditor demands payment. He offers guineas at the current and conventional value of 21 shillings, the creditor refuses the offer; he offers bank notes, refused: it is no excuse to say that 100,000_l._ of silver coin cannot be picked up; he who owes must find it. The creditor tells him that the mint is open. Here the debtor is obliged either to part with his guineas at 20 shillings value, or to carry silver, which costs him 65 shillings the pound troy, to the mint, and to pay it to his creditor at the rate of 62. There would be still some consolation, if, from such a hard necessity, the state were to be provided with weighty coin; but that is not the consequence. The creditor is no sooner paid in silver, than he throws his coin into the melting pot, and then sends the bullion to market to be sold at 65 pence the ounce in bank notes.

[Sidenote: Consequences as to the bank.]

He next goes to the bank, and demands payment of his notes, It is not to be supposed that there is old worn silver enough there to pay all the notes in circulation. The bank must be in the same situation with every debtor, it must send silver to the mint; not as perhaps at present to be afterwards exported, or to furnish work for the mint and then to be melted down again, but to acquit the notes which it had issued in lieu of light silver, or guineas at 21 shillings. The creditor melts down his new silver again, sells it as bullion for bank notes as before, and returns upon the hank with a new demand.

[Sidenote: Reducing guineas to 20 shillings, is the same as making
them a commodity.]

It is the same thing as to this last supposition, whether the guineas be left as merchandize to seek their value, or be fixed at 20 shillings; for no man upon earth will give a heavy guinea for 20 shillings present currency; and if debtors were obliged to pay at that rate, the hardship would be exactly the same as in the foregoing supposition; for the difference in paying with heavy silver or with good guineas at 20 shillings, is no more than that of 1718.7 to 1719.9; a guinea, which weighs 118½ grains fine gold, being worth 1719.9 grains of fine silver, according to the proportion of 1 to 14½, and a pound sterling, according to statute, is worth no more than 1718.7 grains of the same metal.

We may therefore conclude, that the scheme of reducing guineas to 20 shillings must proceed upon the supposition of a new coinage of all the silver: without this, the same confusion as to the coin would remain as formerly; a new disproportion of the metals would take place; no body would pay in gold, as at present no body will pay in silver.

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CHAP. XI.
_Method of restoring the Money-unit to the Standard of Elizabeth, and
the Consequences of that Revolution._

[Sidenote: How to fix the pound sterling at the standard of Queen
Elizabeth.]

I come now to the proposal of restoring the standard to that of the statute of Elizabeth, which is in other words the same with what has been proposed in bringing down the guineas to 20 shillings; only that it implies a new coinage of all the silver specie and of all the old gold. Nothing is more easy than to execute this reformation.

I. The first step is to order all coin, gold and silver, coined preceeding a certain year, to pass by weight only.

II. To preserve the mint price of silver as formerly, at 5 _s._ 2 _d._ the ounce, and to fix that of gold at 3 _l._ 14 _s._ 2¼ _d._

III. To order the pound troy standard silver to be coined as formerly, into 62 shillings, and the pound of gold into 44½ guineas.

IV. And last of all, to order these guineas to pass for 20 shillings.

Thus the standard is restored to the value of the silver by the statute of Elizabeth, the metals are put at within a mere trifle of the proportion of 1 to 14½: all the coin in the kingdom is brought to standard weight: no profit will be found in melting or exporting one species preferably to another: exchange will answer, when at par, to the real par (when rightly calculated) of either silver or gold, with nations, such as France, who observe the same proportions: and the pound sterling will remain attached to both the gold and silver, as before.

[Sidenote: The consequences of this reformation will be to raise
the standard 5 _per cent._]

The consequences of this reformation will be, that the pound sterling will be raised from 1638 grains fine silver (the value of the present worn silver currency) to 1718.7; and from 113 grains fine gold (the present gold currency) to 118.644; that is to say, the value of the pound sterling will be raised upon both species 4.9 _per cent._ above the value of the present. This all creditors will gain, and all debtors will lose. From the day of the regulation, the exchange upon all the places in Europe will rise 4.9 _per cent._ in favour of England, and every man who is abroad, and who draws for the rents of his estate, will yearly gain 4.9 _per cent._ upon his draughts or remittances made to him. Whether prices in England will fall in proportion I do not know; one thing is pretty certain, that every article bought for foreign exportation will fall; for this good reason, that merchants will not be the dupe of this innovation, nor will they buy with heavy money at the same rate they were in use to buy with light. Justice will be done to all gentlemen whose ancestors let their lands in the reign of Queen Elizabeth, or at any time since, when gold and silver were at the proportion of 1 to 14½, and when the silver coin was at its standard weight. All taxes imposed by pounds, shillings, and pence, will be raised; all those imposed at so much _per cent._ of the value will stand the same, but will appear to sink in the denomination; that is, they will produce as much value, but fewer pounds, shillings, and pence, than before. The nation will lose 4.9 _per cent._ upon the whole capital and interest of the public debts; this the creditors will gain. The bank will gain in its quality of creditor upon the public, and will lose (together with all the bankers in England) 4.9 _per cent._ upon all their circulating paper. All annuitants, landlords, and creditors of every denomination, whose contracts are under 30 years standing, will gain. All debtors, mortgagors, tenants, whose contracts are of a fresher date, will lose. All merchandize whatsoever ought to fall 4.9 _per cent._ in its value; and every farthing any thing falls less in its price is lost to the consumers.

These are some of the most evident consequences which must result from this plan of reformation, and the nation is the best judge how far they will contribute to her advantage.

Either this reasoning is just, or all the principles I have laid down are false from the beginning.

[Sidenote: Every interest in a nation equally entitled to
protection,]

A wise nation, I apprehend, is actuated by a spirit of justice. Every class, every denomination of inhabitants is equally entitled to the protection of a good government. Whatever step of administration can profit one set of men, to the detriment of another, is ill combined: whatever step can do justice to one set of men who have wrongfully suffered loss, to the detriment of another who have unjustly gained, is well combined. Upon these principles it is impossible to approve of the operation we have described. It is a political hodge-podge: it is, as it were, throwing all the interests of Great Britain into a bag, and drawing them as in a lottery.

[Sidenote: Those who suffer by the debasement of the standard,]

We must, therefore, enter into a more particular examination of those opposite and jarring interests; we must inquire into the interests which have suffered, and which continue to suffer, from the actual debasement of the standard, and into those which must suffer upon a restitution of it according to the plan proposed. When we are informed concerning the sufferers, we shall easily perceive who must be the gainers.

Those who suffer by the debasement of the standard, are

_1mo._ Every person who is creditor in a contract entered into before the debasement of the standard.

_2do._ In proportion as the disorder in the coin continues, and as the currency becomes lighter, every man who sells to merchants is a loser.

In a trading nation such as England, it is not possible that any currency can long sustain itself by virtue of the stamp, at a higher value than its intrinsic worth. Whoever therefore, from a habit of selling any particular merchandize, continues to consider a currency which is daily becoming lighter as remaining at the same value, is deceived in his dealings by every man who is instructed in the matter of fact.

[Sidenote: ought only to benefit by the restitution,]

Those, I think, are the only persons who are really losers by the debasement of the standard, and who have a right to be redressed.

I must not omit however, to mention another set of people infinitely more considerable than both, who think fit to rank themselves in this class, without having the smallest pretension to enter into it.

These are such who would be gainers, were the government of England to restore the standard upon the supposition that justice required it, without giving themselves the trouble to examine into the merits of that important question.

[Sidenote: and not the whole class of creditors,]

Of this class are all the public creditors, all enjoying any salary, pension, or pay whatsoever for personal service; all annuitants, landlords, &c. In short, every man in the kingdom, so far as he is a creditor upon any public or private interest.

But to this class I must beg leave to put a question: What title has any person to receive in payment one grain of silver or gold more than he had stipulated from his debtor at the time of contracting, because the government of Great Britain thinks proper to make a new regulation with respect to their coin? If it be true that every man has a right to complain of the _debasement_ of the standard so far as he is thereby defrauded of that weight of the fine metals which he was entitled to receive, surely every man has a right to complain of the _rising_ of the standard, who thereby becomes obliged to repay more weight of the fine metals than ever he received value for.

In justice and in common sense, the raising of the standard of the coin ought never to be allowed to benefit any person but those who have been unjustly sufferers by the debasement of it, nor ought it ever to be prejudicial to any person but to such as by the debasement have been unjustly gainers.

[Sidenote: whose claim ought to be liable to a conversion,]

In every contrast where neither of the parties can produce any palpable loss sustained by the former debasement of the standard, the alteration ought to have no manner of effect. All debts of whatever kind, ought to be liable to a fair conversion, as much as those contracted in guilders, florins, livres, &c. when they come to be paid in pounds sterling. The old and the new standards are not the same, because they carry the same denominations of value, any more than a piastre is a pound, because they begin with the same letter.

All the world must agree that the standard of queen Elizabeth is debased, and that a pound sterling is no longer worth 1718.7 grains troy fine silver. Every body must also agree that were the standard restored, merchandize of every kind ought to fall in value.

[Sidenote: according to justice and impartiality.]

If therefore, after the restitution, a person who has merchandize to buy, shall have the privilege to proportion his price according to the change of money, why should another who is a debtor be in a worse situation? Why should permanent contracts be obligatory according to language, and momentary contracts, such as sale, be obligatory according to things?

Two people hire each a servant, the one stipulates to pay twenty guineas wages, the other stipulates twenty-one pounds sterling: the standard is in a short time after restored in the manner we have been describing; can any thing be more absurd, than that he who stipulated the twenty guineas, shall be quit after the restitution, on paying the twenty guineas as before, and that he who stipulated the twenty-one pounds sterling, shall be obliged to pay twenty-one guineas?

What pretension therefore can any man who is possessed of a salary, an annuity, or of a bond or other security for a sum due to him by another, have to be paid the same number of pounds sterling stipulated at first, when the pound comes to be increased in its intrinsic value 5 per cent. above the value it had when the obligation was contracted?

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CHAP. XII.
_Objections stated against the Principles laid down in this Inquiry, and
Answers to them._

I hope it will be remarked, that I do not pretend that the coining the pound troy standard silver into 65 shillings, or the making a new coinage upon the old footing of 62, reducing the guineas to 20 shillings, and then allowing conversions from the old to the new standard at a deduction of 5 per cent. upon permanent contracts formerly entred into, is not a manifest debasement of the value of the pound sterling, from what it was while affixed to the silver according to the statute of Elizabeth. All I pretend to allege is, that neither of these operations (which are nearly the same thing) would be a debasement of the present value of the pound sterling, or of what it has been worth for these thirty years past at least.

But as this opinion is by no means generally adopted, I must now do justice to its adversaries, and set before the reader the several objections which may be opposed to it.

[Sidenote: That a pound will always be considered as a pound.]

_OBJECTION_ I. That the force of habit is so strong in uniting the ideas of value to the denominations of coin, that a pound sterling, whether it be raised or no, will always carry along with it the same measure of value: that merchandize will not sink in price according to the due proportion of the rise: that if conversions are suffered, the confusion will be endless; and that in the main, the diminution thereby operated upon the _numerary_, will turn out a real diminution upon the _intrinsic_ value.

[Sidenote: That the standard is not debased at present, being
affixed to the statute not to the coin.]

_OBJ._ II. That the disorder in the proportion of the coin, and the wearing and lightness of the currency are not a real debasement of the standard. That the money-unit preserves its intrinsic value, in virtue of the statute of Elizabeth which establishes it. That it is false to allege that the English standard is solely affixed to the coin, or that it has no invariable measure to be compared with. That the pound sterling is really fixed to that statute not to the coin; and therefore that no variation of the coin, but only a variation of that statute, can change the standard.

[Sidenote: That the pound sterling is virtually worth 1718.7
grains fine silver.]

_OBJ._ III. That the pound sterling is still virtually, and in many respects worth the silver statute of Elizabeth, although traders in bills of exchange, and jobbers in the metals may make it appear otherwise. That consequently a new regulation either by the coinage of silver at 65 shillings in the pound troy, or by admitting deductions of 5 per cent. upon the old standard, on pretence that a pound sterling is worth no more at present than 1638 grains of fine silver, is not preserving the standard at what it has been these thirty years, but really a debasement of it from the present value.

[Sidenote: That these principles imply a progressive debasement of
the standard every new coinage.]

_OBJ._ IV. That if the rubbing and wearing of the coin be said to debase the standard in spite of all statutes, and if every new coinage is to be regulated by the weight of the former grown light, in order to support the actual value of the money-unit, it is plain, that in time that unit must be reduced to nothing.

[Sidenote: That the same argument holds for debasing the standard
measures of weights, capacity, &c.]

_OBJ._ V. That were the measures in common use, by wear and by fraudulent practices, rendred less than the standard measures kept in the exchequer, it would appear manifestly absurd, for that reason, to diminish these standard measures. That for the same reason, while the statute of Elizabeth subsists, it would be equally absurd to diminish the silver standard of the pound sterling.

[Sidenote: That the wearing of the coin falls on them who possess
it at the crying down, but does not debase the standard.]

_OBJ._ VI. That debasing the standard by law is violently invading every man’s property; that when the coin is debased by circulation, the loss only falls upon him who happens to be in possession of any part of it at the time it is cried down.

[Sidenote: That inland dealings, not the price of bullion, or
course of exchange, regulate the standard.]

_OBJ._ VII. That although merchants and money-jobbers may consider the value of a pound sterling according to its weight of silver or of gold; and although exchange and the price of bullion may make it appear to be at present of no greater value than 113 grains of fine gold, and 1638 grains of fine silver; yet still in inland dealings it is worth its standard weight, to wit, 1718.7 grains of silver; because the inhabitants of England never consider their money by its weight, but by tale. The currency by tale regards the standard, as currency by weight regards the coins themselves.

That the quantity of money which goes abroad, or even the quantity of foreign dealings, is so inconsiderable, when compared with domestic circulation, that the value foreigners put upon English money can but very little affect the value of it in the country.

[Sidenote: That public currency supports the value of the coin.]

_OBJ._ VIII. That the coin, though light, being received by the King in all the public offices for its value, keeps up that value to the standard, notwithstanding its being under the weight.

[Sidenote: That this scheme is the same with that of Lowndes.]

_OBJ._ IX. That the scheme proposed is the same with that proposed by Lowndes in 1695, so fully refuted by Mr. Locke, and rejected by the decision of the nation on a parallel occasion.

[Sidenote: Answers to these objections.]

In order to leave nothing unsaid which can tend to set this matter in a clear light, I shall briefly give an answer to all these objections, in the most distinct manner I am capable of. I have gathered them from every quarter, particularly from Mr. Harris. I have endeavoured to state them in all their force, and I shall answer them with candor, according to the principles laid down, and according to uncontroverted matters of fact.

[Sidenote: That a pound will be considered at its worth by all
debtors, and those who buy.]

_ANSWER TO OBJECTION_ I. Here I reply, that no habit any people can contract, is strong enough to blind them with regard to their interest. Nothing is so familiar in many countries, as to raise and sink arbitrarily the numerary value of the several denominations of coins; but no sooner is the change made, than it becomes familiar, even to the children of twelve and fourteen years old; and any person who has had occasion to travel, must have been astonished at the acuteness of the common people in their knowledge of the value of coins. The habit of uniting ideas to old pounds sterling will, upon a restitution of the standard only, be found in the heads of sellers and creditors; buyers and debtors will very quickly learn to profit of a deduction of 5 _per cent._ provided they are legally authorised to do it. It will greatly depend upon government to oblige commodities to follow the just proportion of their worth, by making conversions of the taxes, new regulations of assize, for bread, beer, &c. and by putting into the hands of the people convenient tables for that purpose. When the thing is once understood, the execution will be easy.

[Sidenote: If the standard was affixed to the statute, people
would be obliged to pay by weight.]

_ANSW._ II. Could it be made out that the standard of the pound sterling is affixed to the statute of Elizabeth, and not to the coin, this objection would be invincible. But were the matter so, the payment of all obligations might be exacted by weight of silver; because the statute regulates nothing else. A man owes me a thousand pounds, he makes me a legal offer of silver or gold coin to the current value, were the standard affixed to that statute, I should have the privilege to refuse both the current species, if light or ill proportioned, and demand of him to weigh me down 1718700 grains of fine silver, or 1858060 grains weight of the nation’s silver coin.

As this is not the case, the standard is not affixed to the statute of Elizabeth; consequently, not affixed to an invariable measure; consequently, must vary according as the coin varies, to which alone it is by law attached.

[Sidenote: No body can be obliged to pay 1718.7 grains of fine
silver for a pound sterling.]

_ANSW._ III. That if it is said, that the pound sterling is in any case of the value of 1718.7 grains of fine silver, I am entitled to ask who can force any man in Great Britain to pay him at that rate? But if it be true on the contrary, that there is not any pound sterling due within that kingdom which may not be legally acquitted with 113 grains of fine gold, or with 1638 grains of fine silver, then I am authorised to state the present value of the pound sterling at that rate. If this be the case, then the addition of one grain of silver or of gold more, in a new coinage, necessarily implies a raising of the standard.

[Sidenote: That it is not the regulation of the mint, but the
disorder of the coin which must debase the standard.]

_ANSW._ IV. This objection lies against the rubbing of the coin, not against the regulation of the mint. I have frequently observed, that it is the rubbing of the coin which of itself debases the standard, in spite of the statute as it stands, but not in spite of what it might be.

There is no doubt, that as long as any nation permits her current coin to pass below the standard weight, by virtue of the stamp, she by that neglect, opens a door to the debasement of the standard, and totally disappoints that part of the statute which regulates the weight; consequently the act of making a new coinage afterwards, at the then debased value, is not of itself a new debasement.

The new coinage, in that case, is a temporary interruption put to the circulation of coin unequally worn, which is what occasions, more than any thing, the progressive debasement of the standard; but it is no new debasement in itself, nor is it any preservative against debasements for the future.

If it be not provided by statute, that debtors shall make good the weight of the coin with which they pay, in one way or other, of necessity the state must either go on regularly debasing her standard every new coinage, or be obliged to raise it by jerks, to the detriment of all the debtors who have contracted during the preceding debasement.

[Sidenote: That people are obliged to measure by the standard
weight, but are not obliged to pay by the standard pound.]

_ANSW._ V. The comparison between the standard weights in the exchequer, with the standard of the pound sterling, is not just. If a merchant offers me grain, bullion, or cloth, by a measure which is not of the legal content, weight, or length, I may refuse it. I have even an action against him for fraudulent dealing, in case I shall have unwarily accepted of the merchandize. But I cannot reclaim (as has been said) the measure of the money-unit according to the statute.

Now let me suppose, that for 40 years no access could be got to the standard measures of the exchequer, that during this time all the measures of the nation should be debased; that notwithstanding this, the landlords over all England should continue to stipulate their rents in grain, by the debased bushel of their respective counties: if after 40 years of such confusion, the exchequer should be opened, and all measures fitted to the standards, would it not be a horrid piece of injustice not to allow both landlords and farmers who had entred into leases within the 40 years, the liberty of converting their rents from the _debased_ to the _standard_ bushel.

[Sidenote: That the loss upon light money when called in does not
fall upon the possessors.]

_ANSW._ VI. This objection proceeds entirely on the supposition, that it is the _altering the statute_, and not the _rubbing of the coin_, or the _changing the proportion of the market price of the metals_ which debases the standard.