The Diplomatic Correspondence of the American Revolution, Vol. 12

by Unknown

Another inconvenience, which admits of the same easy remedy, and which would indeed be cured by the very same Act, is the want of a legal tender. This is as necessary for the purposes of jurisprudence, as a general currency is for those of commerce. For although there is great impropriety, not to say injustice, in compelling a man to receive a part of his debt in discharge of the whole, yet it is both just and proper, that the law should protect the honest debtor, who is willing to pay, against the vexatious suits of an oppressive creditor, who refuses to receive the full value.

The nature, value, and use of money have always occasioned strong temptations to the commission of fraud, and of consequence, the practice of counterfeiting is coeval with that of coining. No government can guard its subject entirely against the wicked ingenuity, which has been exercised in this respect. But it has always been the object of every wise government to take all the precautions against it, which are within the compass of human ability. These precautions will be least effectual where the coins are so numerous, that the knowledge of them being a kind of science, the lower order of citizens are constantly injured by those who carry on the business of debasing, sweating, clipping, counterfeiting, and the like. It is, therefore, to be lamented, that we have so many different coins in the United States.

It is not necessary to mention what is in everybody's mouth, that the precious metals were first used as bullion, and that the inconvenience of weighing, and the difficulty of assaying introduced the practice of coining, in order that the weight and fineness, might be known at the first view, and of consequence, the value be instantly ascertained. It is equally unnecessary to observe, that the great privilege of declaring this value by particular marks has, among all nations, been vested exclusively in the Sovereign. A trust so important could not indeed be vested anywhere else; because the danger of abusing it was too great. And history informs us, that Sovereigns themselves have not on this occasion behaved with that integrity, which was alike due to their subjects and to themselves, to the interests of their people and their own personal glory.

Experience has already told us, that the advantage of gold as a coin is in this country very considerably diminished, for every distinct piece must be weighed before it can be safely received. Both gold and silver coins are indeed preferable in one respect to common bullion, that the standard is presumed to be just, and consequently, they are received without the delays and expenses of assaying. It must, however, be remembered, that they are all foreign coins, and of course, we are not only exposed to the tricks of individuals, but should it suit the interest or convenience of any Sovereign to make base money for us, there is nothing to prevent it. If, for instance, the King of England, or any of his Birmingham artists, should coin guineas worth but sixteen shillings sterling, our citizens would readily and freely receive them at twentyone shillings sterling. It is my duty to mention to Congress information I have received, that guineas of base metal are coined at Birmingham so well as to escape any common attention. Now there can be no doubt, that every such guinea received here would be a national loss to us of an English crown. How much we suffer in this way at present it is impossible, to estimate.

What I have already had the honor to observe contains some of the reasons why it appears to me highly necessary, that an American coin should be adopted without delay, and to these reasons it may be added, that there is a want of small money for the common occasions of trade, or that it is more felt by our soldiery than any other persons. For the little pay, which they do receive, being either in gold or at best in dollars, the sutlers and others with whom they have dealings, continually take the advantage of their want of change, and rate the prices of their goods accordingly.

Shortly after my appointment, finding that there was a considerable quantity of public copper at Boston, I ordered it round to this place. It has safely arrived, and will when coined amount to a considerable sum. The necessary machinery of a mint can be easily made, and there are persons who can perform the whole business. I must pray leave, therefore, to submit to Congress some few more particular remarks on this subject, as introductory to a plan for an American coin.

Although most nations have coined copper, yet that metal is so impure, that it has never been considered as constituting the money standard. This is affixed to the two precious metals, because they alone will admit of having their intrinsic value precisely ascertained. But nations differ very much in the relation they have established between gold and silver. In some European countries an ounce of pure gold passes for fifteen ounces of pure silver. In others for fourteen. In China it passes for much less. The standard, therefore, which is affixed to both metals is in reality affixed to neither. In England, gold is to silver nearly in that proportion of one to fifteen, and in France nearly of one to fourteen. If a man carries fourteen ounces of gold from France to England he receives two hundred and ten ounces of silver, which in France purchases fifteen ounces of gold. In like manner he who carries from England fourteen ounces of silver to France receives one ounce of gold, which in England purchases fifteen ounces of silver. If it be, then, supposed that the coins of these two countries were alike pure, it must follow that in a short time all the gold coin of full weight would be in England, and all the silver coin of full weight in France. But the light silver circulating in England, and the light gold in France, the real standard of coin in each would be different from the legal, and seek a medium of fourteen and a half of silver for one of gold, although the legal standard might still be in the one place fifteen and in the other fourteen.

The demand which commerce might make for any of the precious metals, in preference of the other, would vary this real standard from time to time, and in every payment a man would get more or less of real value for his debt, according as he was paid in the coin of greater or less value, in relation to the real standard. If, for instance, the debt were contracted when the silver was to gold as one to fifteen, and paid when as one to fourteen; if the debt were paid in silver he would gain one thirtieth, and if in gold he would lose one thirtieth. In England the money standard is rather affixed to gold than to silver, because all payments are made in the former; and in France it is rather affixed to silver than to gold.

Arguments are unnecessary to show, that the scale by which everything is to be measured ought to be as fixed as the nature of things will admit of. Since, therefore, a money standard affixed to both the precious metals will not give this certain scale, it is better to make use of one only. Gold is more valuable than silver, and so far must have the preference. But it is from that very circumstance the more exposed to fraudulent practices. Its value rendering it more portable is an advantage, but it is an advantage, which paper possesses in a much greater degree, and of consequence the commercial nation of England has had recourse to paper for the purposes of its trade, although the mass of circulating coin is gold. It will always be in our power to carry a paper circulation to every proper extent. There can be no doubt, therefore, that our money standard ought to be affixed to silver.

But silver is liable, like everything else, to a change of value. If there is a demand for it to export, the value will rise; if the contrary it will fall; and so far it cannot be considered as a fixed measure of value. Before this objection be considered it will be proper to make a few reflections on another part of the present subject; but in this place I remark, that if the objection cannot be removed, we must not suffer it to be preponderate, because it weighs alike against every other metal.