The scope of this series of Acts of 1774 will be seen at a glance; as well as the tendency in policy, namely, in favour of gold, which it indicated. The gold coinage was renewed, and as a safeguard against its future depreciation the existing depreciated coin was cut off from any sapping action upon it by the above restriction as to tender by weight. For the renewal of the silver coinage itself no actual measures were taken save the prohibition of the import of light coins.
For more than twenty years the defective state of the silver coin continued quite unheeded; evidently as no longer causing international embarrassment, now that its function and differentiating action upon the companion metal had been partially tied down and limited.
In 1787 the depreciation of the silver coinage was ascertained experimentally, when it was found that half-crowns were defective by over 9 per cent., shillings by over 24 per cent., and sixpences by more than 38 per cent. of their proper weight.
To this depreciation was added an exterior cause of drain by the action of France, who in 1792 increased the scarcity of silver coins and bullion by the issue of her assignats. In that year not less than 2,909,000 oz. of silver were purchased with assignats and sent into France. Five years later an attempt was made to supply the deficiency of the silver coins by the issue of Spanish dollars, countermarked with the hall mark of the King's head. This was after the Bank of England had, in accordance with the minute of the Privy Council of 26th February 1797, suspended cash payments.
ENGLAND: ACT OF 1798
On the 7th of February of the following year, 1798, the subsisting Committee of Council for Coins was dissolved, and a new committee appointed to consider the state of the coins and Mint. During its deliberations, and until it established the new rule, the further coining of silver was suspended by the Act already spoken of, which (21st June 1798) revived the old law against importation of light silver. This suspension of silver coinage was simply a temporary precaution. "Whereas," says the Act, "His Majesty has appointed a committee of his Privy Council to take into consideration the state of the coins of this kingdom, and the present establishment and constitution of His Majesty's Mint, and inconvenience may arise from any coinage of silver until such regulations may be framed as shall appear necessary; and whereas from the present low price of silver bullion, owing to
temporary circumstances, a small quantity of silver bullion has been brought to the Mint to be coined, and there is reason to suppose that a still further quantity may be brought, and it is therefore necessary to suspend the coining of silver for the present, be it therefore enacted that no silver bullion shall be coined at the Mint, nor shall any silver coin that may have been coined there be delivered."
There can be little doubt that this enactment was due to Lord Liverpool, and if so that it was intended as an arrest, with a particular intent or bearing; for Liverpool had formed his conception of a monetary theory as early as 1773. None the less it is quite inadmissible to state, as has been done, that this restriction, so evidently and expressly only a temporary or interim measure of self-defence, was equivalent to a placing upon the statute-book of Lord Liverpool's gold monometallical theory. There was as yet no restriction on the legal tender of silver. It was still legal tender to any amount,—it was indeed the standard coin of the realm,—only, in order to avoid the effects of depreciation, and to prevent further depreciation, it was now the law of the land that payments of silver of sums over £25 should be made by weight, and the further coinage of silver was temporarily stopped.
This was not a gold monometallic system, and the Act which established that system was passed eight years after the death of Lord Liverpool, and six years after the Bullion Report of 1810 had been printed.