An Inquiry into the Principles of Political Oeconomy (Vol. 1 of 2) / Being an essay on the science of domestic policy in free nations. In which are particularly considered population, agriculture, trade, industry, money, coin, interest, circulation, banks, exchange, public credit, and taxes

by Sir James Steuart

By this it appears that all the silver coin must be raised in its denomination ¹⁄₅₈, and all the gold coin must be lowered in its denomination ¹⁄₅₈; yet still S + G, will be equal to two pounds sterling, as before, whether they be considered according to the old, or according to the new denominations.

But it may be observed, that the imposition of coinage rendering the value of the coin greater than the value of the bullion, that circumstance gives a certain latitude in fixing the new denominations of the coin, so as to avoid minute fractions. For providing the deviation from the exact proportion shall fall within the advanced price of the coin, no advantage can be taken by melting down one species preferably to another; since, in either case, the loss incurred by melting the coin must be greater than the profit made upon selling the bullion. The mint price of the metals, however, may be fixed exactly, that is, within the value of a farthing upon a pound of fine silver or gold. This is easily reckoned at the mint; although upon every piece in common circulation the fractions of farthings would be inconvenient.

15 How contracts are to be fulfilled, after a change in the denominations has taken place.

15. That notwithstanding of the temporary variations made upon the denomination of the gold and silver coins, all contracts formerly[formerly] entred into, and all stipulations in pounds, shillings, and pence, may continue to be acquitted according to the old denominations of the coins, paying one half in gold, and one half in silver; unless in the case where a particular species has been stipulated; in which case, the sums must be paid according to the new regulation made upon the denomination of that species, to the end that neither profit or loss may result to any of the parties.

16. The weight of the several coins never to be changed, except upon a general recoinage of one denomination at least.

16. That notwithstanding the alterations on the mint price of the metals, and in the denomination of the coins, no change shall be made upon the weight of the particular pieces of the latter, except in the case of a general recoinage of one denomination at least: that is to say, the mint must not coin new guineas, crowns, &c. of a different weight from those already in currency, although by so doing the fractions might be avoided. This would occasion confusion, and the remedy would cease to be of any use upon a new change in the proportion of the metals. But it may be found convenient, for removing the small fractions in shillings and sixpences, to recoin such denominations all together, and to put them to their integer numbers, of twelve, and of six pence, without changing in any respect their proportion of value to all other denominations of the coin: this will be no great expence, when the bulk of the silver coin is put into 5 shilling pieces.

How this will preserve the same value to the pound sterling at all times, and how fractions in the denominations of coin may be avoided.

By this method of changing the denominations of the coin, there never can result any alteration in the value of the pound sterling: and although fractions of value may now and then be introduced, in order to prevent the abuses to which the coin would otherwise be exposed, by the artifice of those who melt it down, yet still the inconvenience of such fractions may be avoided in paying, according to the old denominations, in both species, by equal parts. This will also prove demonstratively that no change is thereby made in the true value of the national unit of money.

17. Small coins to be current only for twenty years, and larger coins for forty years or more.

17. That it be ordered that shillings and sixpences shall only be current for twenty years, and all other coins, both gold and silver, for forty years, or more. For ascertaining which term, there may be marked, upon the exergue of the coin, the last year of their currency, in place of the date of their fabrication. This term elapsed, or the date effaced, that they shall have no more currency whatsoever; and when offered in payment, may be received as bullion at the actual price of the mint, or refused, at the option of the creditor.