the change is dated 16th May 1544. Gold was raised from 45s. to 48s. the oz., and silver from 3s. 9d. to 4s. In the purchase price of the two metals, therefore, there was no change in the ratio, but calculating on the basis of the issue price, i.e. the pieces issued from the Mint, the alteration of ratio was from 11 59⁄220 to 10 10⁄23. In the proclamation the change was attributed to "the enhancement of the prices of these metals beyond the sea, as well in Flanders as in France, which would have drawn all the coins out of the realm if a remedy had not been applied. And although the customers of the ports of the kingdom had been ordered to put in execution the statutes for the conservation of the coins, yet for the great gain they were still secretly carried abroad."
The coinage measures, therefore, of the year 1544, when justly considered, do not possess the aspect which has been generally attributed to them. It is incorrect to look upon them as the tentative beginning of that debasement of the coinage which disgraced the later years of the reign of Henry VIII. and the days of his son Edward VI. The measures of 1544 were simply acts of justifiable self-defence and currency safeguard. The real debasement began two years later, in 1545-46, when, by indenture, the silver coins (testoons) were reduced from 10 oz. to 4 oz. fine silver, the 2 oz. of alloy in the former case being increased to 8 oz. in the latter. In 1550 the content of fine silver in the testoon was further reduced to 3 oz.
The plan of this history makes it incumbent to treat questions of debasement as standing apart from the subject-matter of the book, which is restricted to the natural and normal ebb and flow of the precious metals, due to the action of bimetallic law. The operation of debasing a coinage—of lowering it, that is, so far and so arbitrarily as to remove it at once from the action of natural law of prices ruling around—means an arrestation of natural economic processes and laws, and the events which follow thereupon stand apart from such laws and ought to be treated as so separate. In reality, debasements always favoured the action of this malignant bimetallic law, and the fact might possibly lead one to attribute to the normal action of a natural law what is in three-fourths of it due to arbitrary action of government.
It would be, therefore, unfair to treat of debasements in a history of bimetallism.
Given, however, the above standpoint, and mental reservation of deduction and innuendo, it is permissible to treat of this debasement as showing how or in what way a debasement does actually facilitate the malignant action of bimetallic law.[14] Further, the present
instance of debasement is the only one on record in English currency history, and the testimonies regarding it are of extreme interest.
THE TUDOR DEBASEMENT
For the purpose of external or foreign trade, a debasement of currency is fatuous and pernicious. The coins are estimated at their content of pure metal, and the international exchange is so rated. The consequence is an apparent rise of foreign prices proportioned to the extent of the debasement. This at once unsettles internal or home trade prices, and they rise to the same level, but with such inequality of motion as may happen to follow from friction, local ignorance, want of communication, or from the intricacies of trade. The inequality of exchange-coinage rates which results from this is the bullionist's or the financier's opportunity, and swiftly and invisibly the good species—or any, bad or good, upon which any differential profit can be had—disappear from circulation. The consequence is that the rising prices which instituted the process are no longer accompanied by an expanding or increasing volume of currency, but, on the contrary, with an enormous decrease in the total of acceptable or efficient currency. Hence come decay of trade, and ruin of town and country.
This is no paper, a priori argument. It is the patent unmistakable statement of history and fact.