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.
Were that proposition true, the consequence drawn from it would be true also, to wit, that the loss by the wearing of the coin remains entirely suspended until the worn coin is all at once cried down. But if I can prove, that the wearing of the coin does not fall upon the person in whose hands it is found when cried down, except only so far as it happens to be below the mean weight of the whole currency, or so far as the person is a debtor, and unjustly obliged, by an arbitrary law, to pay what he had received in light, with heavy coin. If this, I say, be true, I hope it will follow, that there is not the least force in this objection. This consequence is plain.
It is certain, that by the wearing of the coin there is a loss incurred by somebody; if it be proved that it is not incurred by the person in whose hands the light coin is found when cried down, it must follow, that it has already fallen proportionally upon those who, in the mean time, have been considering it as of the standard value, while it has been really below it.
Here follows the proof of this proposition.
I shall suppose the silver coin of Great Britain is actually so worn as to be 5 per cent. lighter than its standard weight at a medium. If at that time the silver is ordered to be recoined of the standard weight, I say the currency, after the coinage, will be 5 per cent. better than before. Ought not then all merchandize to fall 5 per cent. in value upon this revolution.
Two men (A) and (B) have, the day before the calling in of the light specie, each a thousand pounds sterling of it in tale; (A) goes to market and buys corn with his thousand pounds, (B) keeps his coin, and next day is obliged to carry it to the mint, where he sells it at 5 per cent. discount; that is, for nine hundred and fifty pounds of new heavy silver coin. (B) after this operation goes to market; and finding grain fallen in the price 5 per cent. he with his nine hundred and fifty pounds, buys just as much as (A) had bought the day before with his thousand pounds. I ask what loss (B) has suffered in carrying his silver to the mint?
But if we suppose the thousand pounds in silver tale money, which (B) had, to be worn more than at the rate of 5 per cent. then he would lose all the difference; because the price of things would fall only according to the general proportion of the rise upon the value of the currency: but on the other hand, he would gain upon the supposition that his thousand pounds should happen to be less worn than the 5 per cent.
Can any thing, therefore, be more absurd, than to appoint by law, that one, who shall at this time happen to be indebted for a thousand pounds, shall be obliged to pay this thousand pounds in heavy money, when he had borrowed it in light.
We have seen how (B) in buying corn with nine hundred and fifty pounds of the new coin, got as much as (A) had got the day before with his thousand. But suppose they had both bought grain the day before the crying down of the coin, (A) with his money, (B) with a note payable next day, how absurd must any law be, which should oblige (B), for one day’s credit, to pay at the rate of 5 per cent. increase of price; and this because of the accident of calling in of the money: an event he could neither foresee or prevent.
We may, therefore, conclude, that while the coin of a nation is upon the decline from the standard value of the unit (as it ought to be preserved by some invariable measure) those only through whose hands it circulates, lose upon what they have, in proportion to the debasement of the standard, while the coin remains in their hands.