But when nations owe to one another, the party debtor must pay the party creditor in his coin: the debtor, therefore, is obliged to sell his own coin for what he can get for it, and with that he must buy of the coin of his creditor’s country, and with this he must pay him.
Let us, to avoid abstract reasoning, take an example: and we cannot choose a better than that of England and France. In England, coinage is free, in France it costs 82⁄10 per cent. as shall be made out in its proper place.
France owes England 1000l. sterling. In paying the bullion contained in this sum, either in gold or silver, in the market of London, the debt is paid; because the coining[coining] of it costs nothing. Here France acquits her debt cheaper than by sending her own coin as bullion; because the bullion she sends is not worth an equal weight of her coin.
England owes France 20,000 livres. In paying the bullion contained in this sum, England is not quit; she must also pay France 82⁄10 per cent. in order to put it into coin.
I reserve the farther examination of all the intricate consequences of this principle, until I come to the application of it, in the Second part.
Variation to which the money-unit is exposed, by the arbitrary operations of Princes in raising and debasing the coin.
V. The operation of raising and debasing the coin is performed in three ways.
1mo, By augmenting or diminishing the weight of the coin.
2do, By augmenting or diminishing the proportion of alloy in the coin.
3tio, By augmenting or diminishing the proportion between the money (coin) and the money of accompt, as if every sixpence were called a shilling, and every twenty sixpences a pound sterling.