PART II. THE PRINCIPLES OF MONEY APPLIED TO TRADE. (continued 3)

This being the case, we have no method left to judge of the proportion of the metals in the coin of Holland, but by the proportion of fine gold and fine silver found in the same sum, paid in florins 85of full weight, and in new riders; the one and the other coined according to the regulations of the mint above mentioned.

It has been shewn that a marc of fine gold in riders, circulates for f. 374, and that a marc of fine silver in florins, circulates for f. 25.572; divide the first by the last, you have the proportion as 1 to 14.62: But we shall afterward discover a circumstance, not taken notice of in this place, which will reduce the proportion lower.

Quantity of fine silver in a florin piece.

From the above calculations, we may easily discover the exact quantity of fine silver and fine gold contained in a Dutch florin, whether realized in silver florin pieces, in gold riders, or in ducats. As this will be of use when we come to examine the par of exchange, it will not be amiss to set before the reader, the exact state of that particular before we proceed. We have said that whoever receives f. 25.57225.572 in silver florins of full weight, receives a marc of fine silver, which contains 5120 aces. Divide the last sum by the first, you have 200.21 aces of fine silver for the florin.

Quantity of fine gold in a florin of riders.

Whoever receives f. 374 in gold riders, receives a marc of fine gold, which contains 5120 aces. Divide the last sum by the first, you have 13.69 aces of fine gold for the florin.

Investigation of this proportion as to the ducat;

We have seen that ducats fluctuate in their value, having no legal denomination, which obliged us to state the current value of a marc of them at 71.687 ducats, not being able to express that value in florins; because of the unsettled denomination of that species. Let us now specify that value in florins, upon three suppositions. The first, that the ducat is worth what it passes for among the people, to wit, 5f. 5st. The second, at the value of new ducats from the mint, to wit, 5f. 4⅜st. The last, at the merchant price of good ducats, which have circulated, to wit, 5f. 4⅜st.

In the first case (the ducat at 5f. 5st.) 71.687 ducats are worth 376.35 florins, this being the value of a marc of fine gold in ducats, and the marc containing 5120 aces; divide the last by the first, you have 13.604 aces of fine gold for the florin.

86In the second case (the ducat at 5f. 4⅝st.) 71.687 ducats are worth 375.04 florins; by which number divide 5120 as before, you have 13.651 aces of fine gold for the florin.

In the last case (the ducat at 5f. 4⅜st.) 71.687 ducats are worth 374.11; by which number dividing 5120, you have 13.685 aces of fine gold for the florin, which comes within a trifle of the florin in riders.

by which it appears that the late war has raised the value of gold, and set the market price of the metals in Holland at 1 to 14.785.

But now (in June 1762) I learn, that the course of new ducats from the mint in the Holland-market, is got up to 5f. 5½st. InIn this case, 71.687 ducats are worth 378.1 florins; by which number dividing 5120, as before, you have 13.541 aces of fine gold for the florin.

If we seek here the proportion between the gold and silver, we must state thus. If a florin in ducats contain 13.541 aces of fine gold, and a florin in silver coin contain as above 200.21 aces of fine silver, then 13.541 : 200.21 :: 1 : 14.785. So the effect of this war has already been to raise the value of gold 1.12 per cent. above what it was esteemed to be, when the riders were coined.

The proportion as to riders is, as before, 1 to 14.62.

Which is a rise upon the value of gold of 1.12 per cent.

The present proportion as to ducats is 1 to 14.785.

14.62 : 100 :: 14.785 : 101.12.

I must farther observe upon this subject, that although we have seen that the ducats which have circulated for ever so short a while, when bought at 5f. 4⅜st. produce for the florin 13.685, (which is more than is produced by the new coined ducats fresh from the mint) we are not from this to conclude, that the former are intrinsically a cheaper currency than the latter. I have been at all the pains imaginable to weigh these ducats against others fresh from the mint; and also to compare their weight with what it ought to be by the regulation; and I have constantly found near ¼ per cent. difference between them. This is entirely owing to the nature of the coin. The ducat has a large surface in proportion to its weight; it carries a very sharp impression, full of small points; the cord about the edges is exceedingly rough; so that the least rubbing, 87breaking off those small points, diminishes the weight of the piecepiece near ¼ per cent. which is clear loss, not only to the proprietor, but to the state, and to all the world. Besides, those who are obliged to go to the mint for new ducats, are supposed to bear the greatest weight of the coinage of a piece which, having no legal denomination, is left afterwards to seek its own value, according to that of the metals at the time.

The intention of this minute detail is in order to calculate the real par of the coins of Europe.

As I have entred into this minute detail of the weight of fine silver and fine gold contained in the Dutch florins, with a view to facilitate the calculation of the par of the metals contained in the coins of Holland, and those of other nations; I must next mention the proportion between the aces in which we have expressed the weight of the Dutch specie, and the grains in use in some of the principal nations with which they trade: These I take to be England, France, and Germany.

Proportion between the mint weights of Holland, England, France, and Germany.

The reduction of weights to mathematical exactness, is beyond the art of man; and to this every one, who ever tried it, must subscribe. I have been at all the pains I am capable of, to bring those weights to an equation; and here follows the result of my examination into that matter.

By all the trials and calculations I have made, I find that 5192.8 aces Holland-troes; 3840 grains English troy weight; 4676.35 grains Paris poid de marc; and 4649.03 grains Colonia (which is the gold weight of the empire) are exactly equal.

I reckon by the lowest denomination of these several weights, to wit, their grains; to avoid the endless perplexity of reducing to a proportion, their pounds, marcs, and ounces, which bear no regular proportion to their grains.

Par of a pound sterling, in weighty silver, with Dutch florins in riders is 11 florins 12 stivers.

To give some examples of this method of calculating the exact par of the metals contained in the coin of those nations, reduced to the weights of Holland, I shall state the following computations.

A pound sterling in silver, by the statute of the 43d of Elizabeth, is 1718.7 grains troy fine; to know how many aces Holland-troes that makes, state thus, 3840 : 5192.8 :: 1718.7 : 2324.1.

88Divide 2324.1 by 200.21, (the number of aces contained in a silver florin) you have for the par of the pound sterling, f. 11.609.

Par of the pound sterling in gold with ditto, is 11 florins 3 stivers and ⅕.

A pound sterling in guineas, by the statute fixing guineas at 21 shillings, contains 113 grains troy fine; to know how many aces Holland-troes that makes, state thus,

3840 : 5192.8 :: 113 : 152.8.

Divide 152.8 by 13.69, (the number of aces contained in a gold florin in riders) you have for the par of the pound sterling in guineas, f. 11.161.

Par of a French louis d’or with the same florin, is 11 florins 3 stivers and ¾.

A French louis d’or contains 137.94 grains poid de marc fine gold; to know how many aces Hollands that makes, state thus,

4676.35 : 5192.8 :: 137.94 : 153.17.

Divide 153.17 by 13.69, (the number of aces contained in a gold florin in riders) you have for the par of the louis d’or, f. 11.188.

Par of 24 livres French in silver with the same florin, is 11 florins 1½ stiver.

24 livres French, contain 1996.88 grains poids de marc of fine silver; to know how many aces Hollands that makes, state thus,

4676.35 : 5192.8 :: 1996.88 : 2217.4.

Divide 2217.4 by 200.21, (the number of aces in a silver florin) and you have for the par of 24 livres French silver, f. 11.076.

Great balance of trade against France, in September 1761.

The French silver here is less valuable in Holland than the gold: this is no proof that the proportion between the metals in the respective coins of these two nations is different (we shall soon find it to be very exactly the same); but this preference in favour of the French gold, is owing to the temporary demand for gold on account of the war; for which reason no French silver coin appears at present in Holland. I write in September 1761.

I must also observe, that at this time the course of louis d’ors is 11f. 4st. which is little or nothing above the real par of the metal they contain; which in peaceable times is not the case. This proves how strongly the balance of trade is against France with respect to Holland, as it has reduced her specie to the price of bullion: it is not so in Germany.

Low value of the pound sterling in Holland, in 1761.

The low value which a pound sterling has borne for these several years in exchange, and the great fall of its worth in Holland of 89late, when it has been at 10f. 10st. is no argument against the high conversion I have given it, to wit, above 11f. 12st. Were there nothing but silver coin in England, and were it all of standard weight, exchange would frequently run even above that value in peaceable times; because the silver coin in Holland is light, and I have reckoned it as if it were of full weight.

It will be observed, that the par upon the gold does not quite amount to 11f. 4st. the reason of which is the great disproportion in the British coin, between the intrinsic value of a pound sterling in silver, and in gold, when both are of standard weight; the latter being near 5 per cent. worse than the former, when the proportion of the metals is supposed to be at 14½. But at present there are no sterling pounds in silver money; there is no silver in England in any proportion to the circulation of trade; and therefore the only currency by which a pound can be valued, is the guinea.

Owing to the lightness of the gold coin in England at that time,

It has been said, and I think sufficiently proved, that the price of the metals in the market, shew very exactly the weight of the currency in nations where coinage is free, when there is no severe prohibition (put in execution) against the exportation of the coin. This I take to be the case in England. Now gold there has risen of late to 4l. 0s. 8d. per ounce; from which I conclude, that the guineas with which it is bought, or with which bank notes are paid, are at present so light, that 4l. 0s. 8d. of them do not weigh above an ounce, (the good guineas are exported) whereas an ounce of new guineas is worth no more than 3l. 17s. 10½d.

Gold, therefore, which now sells for 4l. 0s. 8d. would certainly be worth no more than 3l. 17s. 10½d. were English gold coin of its proper weight: and the price of it will come down to that value, in proportion as circumstances shall call back the heavy guineas.

To facilitate the verification of this point, I shall first observe, that the difference between 4l. 0s. 8d. and 3l. 17s. 10½d. is 4.57 per cent. The English gold currency, therefore, at the time standard bullion was worth 4l. 0s. 8d. must have been worn 4.57 per cent. Guineas, 90when of full weight, weigh 129.43 grains of troy weight; if such guineas are worn 4.57 per cent. they ought to weigh no more than 123.23 grains troy. Now let any man try the experiment, and put an old guinea, taken by chance (not picked out) into a scale, and see whether it has not been worn down to 123.23 grains; and let him also examine whether the greatest part of the guineas, at the time when gold bullion has got to so high a price, are not of King George I. and his predecessors: these I call old.

Besides these there are other circumstances to be attended to. Men who job in coin, pick up all the worst guineas they can when they go to market; or if they buy with paper, we may decide, that the bank at that time pays in guineas not above the weight of 123.23 grains troy; for if the bank paid with guineas of a greater weight, he who had occasion to carry his paper to market to buy gold bullion, would certainly rather go to the bank, and afterwards melt down their guineas. Were the bank of England never to pay but in gold of full weight, and were the exportation of guineas free, it is impossible that gold should ever rise above the mint price, which is 3l. 17s. 10½d.

As a farther confirmation of the justness of the high valuation I have put upon a silver pound sterling of standard weight, I shall observe, that a new guinea passes in Holland (at the time when the exchange is at 10f. 10st.) for 11f. 11st. and every body knows, that such a guinea in England is not above the intrinsic value of a silver pound sterling of full weight. If then I can get 11f. 11st. for a new guinea, I ought to get as much for a new silver pound sterling, since the intrinsic value of both is the same, when the proportion of gold to silver is as 1 to 14½. Now this guinea must be worth more than 11f. 11st. because the Jews, who carry them to the mint, give that price for them (I have disposed of them to Jews at that value^[4]); and as the coinage of ducats costs, as we have seen, near 1 per cent. the guinea is intrinsically worth 2 stivers more, that is 11f. 13st. but as gold at present bears an advanced price 91upon account of the war, and that the proportion between gold and silver is in Holland above 1 to 14½, these are the reasons why the guinea, in Holland, is at present something above the intrinsic value of a silver pound sterling, which we have stated at f. 11.609, a trifle above 11f. 12st.

and not to the wrong balance of their trade, as is alledged.

Let me here observe, by the bye, that all the pounds remitted from Holland to England, for filling the subscription for 12 millions of last year, cost the remitters but about 10f. 10st. for the pound sterling. If this low course of exchange be owing (as some pretend) to a wrong balance of trade against England, and not (as I pretend) to the lightness of the gold currency; then we must allow, that the expence of the German war (which is what alone carries off coin out of the kingdom) must have exceeded all the profits of the English commerce, which I apprehend to be at present immense; and also all the money lent by foreigners towards the loan of 12 millions. I leave to others more knowing than myself, to determine if such a supposition be admissible. If it be rejected, let any man reflect how absurd it would be to raise, at this time, the standard of the pound sterling to the old value; and to repay at 11f. 12st. such sums as have been borrowed at the value of 10f. 10st. or in other words, to make a present to the Dutch creditors of above 11 per cent. upon account of a loan for a year or two.

Defects of the silver currency of Holland.

Having now given as good an account as I can of the Dutch coin, according to the regulations of the state, I shall next point out the defects of their silver currency, and shew the consequences which result from them. As for the gold, it is at present perfectly well regulated. The riders are all exact in their weight, fineness, and denomination; the ducats are all now recoined of legal weight and fineness; and the denomination not being fixed, they serve, in a trading nation, as a merchandize, of which the weight and fineness are well ascertained. The only defect, therefore, I can discover in the Dutch gold currency, is the form of the pieces. They have too much surface in proportion to their weight, and the impression 92is too sharp; both which contribute greatly to the wearing of the coin.

Account of this currency.

The silver currency of Holland is of two sorts. The bank species, and the current species. Here it must be observed, that by bank species is not meant Amsterdam banco, or bank money, but certain coins which are called bank species. These are,

Pieces of 3 guilders.

————— 30 stivers.

————— 20 stivers.

These are called groff gelt, as being the good specie, of which hitherto we have only spoken. Sums to be paid in bank species, must be composed of ⅔ of this currency, and of ⅓ of what follows, viz.

Riders of 14 florins.

Dutch half crowns of 28 stivers.

Ses t’halves of 5½ stivers.

I have put in the riders, though a gold coin, in order to give a compleat enumeration of all the kinds of these bank species.

Regulations for the payment of foreign bills in coin.

Foreign bills drawn on Rotterdam in banco (i. e. bank species) are often received there, in any of the above species, without regard to the ⅔ which ought to be groff gelt; but when the holder of the bill desires the acceptor (which the latter cannot refuse) to write it off to his credit in the current bank of Rotterdam, and that he has there no stock, then, if he brings in specie to the bank, it must be as above specified.

Ditto for current bills.

Current bills, not specified by the word banco, are generally paid according to the following proportion:

³⁄₁₀ in schillings of 6 stivers.

¹⁄₁₀ in dubleties of 2 stivers.

⁶⁄₁₀ in good silver.

Ditto for merchandize.

Merchandize are paid with all kinds of Dutch silver, ⅒ only in dubleties, and ⅓ gold, less or more, or sometimes none, according to agreement.

The denominations of the several silver currencies not proportioned to their intrinsic value.

From this exposition of the matter, it is very evident, that all these currencies must be of different intrinsic values, in proportion 93to their denomination; otherwise, why all this trouble about regulating the proportion to be received in payments? |Cause of this.| This proceeds from two causes: first, from the wearing of the pieces; the second, from the disproportion of the fineness in pieces of the same weight and denomination.

Regulations concerning the weighing of silver species in banks current.

As to the first, to wit, the wearing of the coin, I shall observe, that the three denominations of the good silver, to wit, the 3 guilder pieces, the 30 stiver pieces, and the 20 stiver pieces, are put up promiscuously in the same bags; being of the same fineness, and consequently of the same value, in proportion to their weight. These bags contain 600 florins each, and the legal and full weight, with which they are weighed at the bank current of Rotterdam, is 25 marcs 5 ounces and 10 engles. Now the exact weight of a florin, according to the regulation, is, as we have said, 200.21 aces fine; then the 600 florins ought to weigh 120126120126 aces fine, which at the standard of 263 parts fine to 25 alloy, is 131545 aces standard: by this analogy, 263 : 120126120126 :: 288 : 131545; which is equal to 25 marcs 5 ounces 10 engles and 13 aces. So the weight at the bank is but 13 aces lighter than in strictness it ought to be; which is so small a difference, that it could hardly turn a scale with such a weight suspended in it: for which reason, I suppose, it is left out, for the sake of the even reckoning of 25 marcs 5½ ounces.

Did these bags of silver coin come up to the full weight, then the silver currency in Holland would be good as to those pieces; but as the greatest part of them are old, having been struck with the hammer, and are of unequal weight, having been coined (al marco) in the old fashion, when coin was weighed by the marc, and not as at present piece by piece, it is impossible they should be of legal weight: the bank, therefore, allows 2 ounces of remedy in receiving those sacs, that is, they put 2 ounces into the scale with the sac, and if they find that the sac is still light, but that the deficiency does not exceed one ounce more than the remedy, they throw out the coin and reckon it over; and if the tale be just, and that none of the pieces appear to have been clipped, they receive it as if it 94were of due weight: if it prove above 3 ounces short of the just weight, they do not receive it.

All allowances for light weight are an abuse.

Here is a palpable abuse, from a disorder in the coin. If a sac is ever so little too light, why allow it to pass, as if it were of due weight? Nothing is so easy as to order such deficiency to be made good by the deliverer. Weights are made for exactness, and all remedies are aukward and incorrect.

This allowance must open a door to malversations in a country like Holland, where there is almost no milled silver coin. The old hammered money was not weighed at the mint, as has been said, piece by piece: it was sufficient that every marc of it answered to the legal denomination: under such a regulation, it is very plain, that there must be many pieces above the legal weight, as well as many pieces below it. Is it to be supposed that money-jobbers will not profit of that inequality, by reducing the heavy pieces to their standard weight, when by such an action they cannot be convicted of any crime? This is one abuse.

By reducing the heavy pieces to their legal weight, the currency is degraded; because that which is taken from these ought to be left to compensate what the light pieces fall short. The bank, therefore, by giving the remedy, gives a kind of sanction to this malversation.

Frauds of money-jobbers in Holland.

Farther, if a money-jobber gets some sacs above the current weight, is it to be doubted but he will reduce them as near as he can to the lowest weight received at the bank? And if he should mistake, and reduce them too low, he has still an expedient for cheating the public, which shall be mentioned presently.

The best silver coin in Holland is, upon an average, 1 per cent. too light.

Now let us suppose, that the specie we are speaking of is, upon an average, only 2 ounces per sac below the standard. If it be no more, this circumstance does great honour to the money-jobbers. Such a deficiency, however, amounts to within a mere trifle of 1 per cent. Is not this an object of great importance, upon all the silver specie of Holland; especially as the remedy given by the 95current bank, is a tacit permission given to every body who has address, to rob so much from all the weighty coin?

From which it follows, that the actual proportion of the metals in their coin is as 1 to 14.479.

Now let us, by the way, correct the former calculation we made upon the proportion of the metals in the Dutch coin. We said above, that a marc of fine gold in riders circulated for f. 374, and that the same weight of silver circulated for f. 25.572, which gave for the proportion 1 to 14.62; but here we find that the marc of silver has lost by fraud and wear 1 per cent.

Now the marc of silver being 5120 aces, if they have lost 1 per cent. there will remain 5068.8 aces. If these 5068.8 aces, therefore, circulate for f. 25.571, the full marc must be worth in the coin f. 25.83.

In order then to find the exact proportion of the metals in the Dutch currency, we must divide 374 by 25.83, instead of dividing by 25.572, as we did when we supposed the silver of full weight. Now ³⁷⁴⁄_25.83 is = 14.479. So the proportion is as 1 to 14.479, the same, within a trifle, of that received in France; which is as 1 to 14.47. But if we attend to every circumstance, we shall find the proportion still lower than the last calculation makes it; for in that, we have searched for it with respect to the best silver specie in Holland; whereas we ought, in strictness, to calculate the gold, against a mixture of ⅓ of less valuable specie, with ⅔ of the good: but when computations cannot be brought to perfect exactness, it is better not to attempt a calculation.

Another abuse in the silver coin of Holland.

Before I leave the consideration of the inequality in the weight of the Dutch currency, I must take notice of another circumstance of considerable importance.

No payments made in silver, below f. 600, are subject to be weighed; any more than what circulates without being put up in bags. What restraint, therefore, is there laid upon money-jobbers, with respect to this part of the currency? When these gentlemen have occasion for money bagged up, they take care that such specie shall be of the proper weight to pass at the current bank, and as for all that is light, they either employ it in payments below 96f. 600, or throw it into the common circulation. This circumstance presents us then with two sorts of silver currency in Holland; that which is bagged up, and weighty; and that which is not, and light.

If we consider the trade of Holland, and the prodigious quantity of payments made in current money, we shall find the quantity of silver which circulates in loose pieces very small, in proportion to that which is bagged up: the regulation therefore of weighing the bags is of infinite importance; and were it not for that, the currency would be debased in a very short time. But the cashiers, who are the great depositaries of this currency, being obliged to deliver the bags of the legal weight, they are thereby restrained from tampering with it: and the bagging up, greatly preventing the wear, supports tolerably well the weight of this old currency of hammered money.

Reason of the great apparent scarcity in Holland of silver coin.

To people who do not attend to all these circumstances, there appears a prodigious scarcity of silver currency in Holland. It is there as difficult to get change for ducats, as it is in England to get change for guineas; and yet, upon examination, we shall find, that the intrinsic value of the silver coin, commonly given in exchange for the gold species, is far below the value of the gold.

A paradox to be resolved.

Here then is a paradoxical appearance to be resolved; to wit, How it can happen in trading nations, such as England and Holland, that in the exchanging light silver coin for weighty gold coin, people should be so unwilling to part with the silver, although really of less value than the gold.

This is the case in both countries: thus it happens in England, where there is so little silver currency; and the case is the same in Holland, where there is a vast deal. Let me therefore endeavour to account for these political phænomena.

Since the time I composed the former part of this inquiry into the principles of money and coins, I have found, by the trials I made in Holland upon the weight of the English silver currency, that shillings are at present (1761) far below the weight of ¹⁄₆₅ of 97a pound troy, which is what they ought to be, in order to make 21 of them equal in value to a new guinea, according to the present proportion of the metals. It is therefore demanded,

1mo, How it comes about that such shillings do not debase the value of the English standard below that of the gold?

2do, Why are they so difficult to obtain, in change even for new guineas, which are of more intrinsic value every where? And,

3tio, Why money-jobbers are not always ready to give them in exchange for new guineas?

These appearances seem inconsistent with the principles above laid down; and a reason must be given why these principles do not operate their effect in this example.

Solution of it.

I answer, that circumstances are infinite, and must constantly be attended to; and there are in the case before us several specialities not to be overlooked; I shall therefore point them out, in my answers to the three questions, as they lie in order.

As to the first, I answer, that these shillings are in so small a quantity, in proportion to the gold species, that they cannot be employed in payments. Now it has been said above, that exchange (in trade) regulates the value of the pound sterling, and considers it as a determinate value, according to the combination of the intrinsic worth of all the several currencies, in proportion as payments are made in one or the other. Now (generally speaking) no commercial obligations are acquitted in silver. I do not understand by the word payments, a few pounds sterling sent from farmers in the country, perhaps in payments of their rents to their landlords; nor what falls into the public offices, in the payment of taxes. It is trade alone, and the payment of bills of exchange between different countries, which can ascertain the true value of that currency in which mercantile payments are made. Were these worn-out shillings in such plenty as to allow bills of exchange to be acquitted in them, I make no doubt but they would fall below the value of the ¹⁄₂₁ of new guineas; every one would be glad to dispose of them for guineas, at the rate of their currency; 98and guineas, then, would be as difficult to be got for silver, as silver is now to be had for guineas. This would bring the standard still lower than it is at present; that is, below the value of the gold: but as payments cannot be made in shillings, their currency cannot affect the standard.

The second question is, Why they should be so difficult to obtain in change for guineas, which are above their value?

I answer, that it is not the intrinsic worth of the light shillings which makes them valuable, and difficult to be got; but the utility they are of in small circulation, forces people to part with their guineas for a less valuable currency. These shillings I consider (now) as marks, not as material money, fitted to a standard. Every body knows the difference between marks or counters, and specie of intrinsic worth. The copper coin of most nations is marks, and passes current, although it does not contain the intrinsic value of the denomination it carries; nor ought it to be a legal tender in payments above a certain sum. Such a regulation preserves its usefulness for small circulation, and prevents it, at the same time, from debasing the standard, and involving in confusion the specific currency (as I may call the gold and silver coins) when properly proportioned, and of just weight.

But shillings in England, although they be at present in a manner no better than marks, because of their lightness; yet in the eye of the law they continue to be lawful money, and a legal tender in payments. It is therefore of great consequence that such shillings be not in too great plenty. That would have been the case, had government come in to the plan proposed for the coinage of shillings below the standard; such shillings would have been coined abroad, and run in upon England, to the great detriment of the nation; and although they had been proscribed in payments, beyond a certain sum, yet they would have been so multiplied in small payments, as to have furnished a means of buying up the gold coin, and carrying it out of the country for an under-value. Whereas the worn shillings do not produce that bad effect, from 99the scarcity of them, and from the impossibility of imitating them in foreign mints^[5].

The answer to the third question, viz. Why money-jobbers are not always ready to give old shillings for new guineas? is easy, from what has been said. They cannot pick them up below the mean value of the currency; because of the great demand there is for them in exchange for guineas; therefore they can gain nothing by providing them for that purpose.

It comes next in order, to solve a similar phænomenon in Holland, where there are great quantities of silver specie, and yet one can hardly find change for a ducat, except in a shop, where one has occasion to buy something.

This mystery is easily resolved. The great quantities of silver in Holland consist of what is put up in bags of due weight, according 100to the regulations mentioned above. This part of their currency is about ½ per cent. better, in intrinsic value, than ducats at 5f. 5st. tale for tale; which is a sufficient reason not to part with it, in change for ducats at that rate. But besides this bagged up bank specie, there are many other sorts of old worn-out coin, of unequal weight and fineness.

These serve as marks for the small circulation, and are not a legal tender in all payments; such as foreign bills. What is the consequence of this? Since this old specie carries denominations above its value, when compared with the bagged-bank-silver coin, it serves to buy up this good silver, when it falls into circulation; that is, it serves to buy up, or to exchange, florin pieces, which are, as I have said, ½ per cent. better than ducats at 5f. 5st. Such good silver pieces are not very common in ordinary circulation; but as it frequently happens that people receive silver in sacs, for their daily expence, who do not mind the difference of ½ per cent. when they pay in this good money, it circulates for a little time, until it falls into the hands of those who know it, and bag it up again. Thus it happens in Holland, from the disorder of their coin, that you may be paid a million sterling, if you please, in good silver coin; and yet you find difficulty to procure silver for a ducat, in the lightest, basest, and most aukward pieces imaginable for reckoning. The bad consequences resulting from this disorder, have been taken notice of in the proper place.

End of the Third Book.

101AN

INQUIRY

INTO THE

PRINCIPLES OF POLITICAL OECONOMY.