The 2d reason is, "That the merchants trading to America have suffered and lost by the paper-money."-This may have been the case in particular instances, at particular times and places: as in South Carolina, about 58 years since; when the colony was thought in danger of being destroyed by the Indians and Spaniards; and the British merchants, in fear of losing their whole effects there, called precipitately for remittances; and the inhabitants, to get something lodged in safe countries, gave any price in paper-money for bills of exchange; whereby the paper, as compared with bills, or with produce, or other effects fit for exportation, was suddenly and greatly depreciated. The unsettled state of government for a long time in that province had also its share in depreciating its bills. But since that danger blew over, and the colony has been in the hands of the crown; their currency became fixed, and has so remained to this day. Also in New England, when much greater quantities were issued than were necessary for a medium of trade, to defray the expedition against Louisbourg; and, during the last war in Virginia and North Carolina, when great sums were issued to pay the colony troops, and the war made tobacco a poorer remittance, from the higher price of freight and insurance: in these cases, the merchants trading to those colonies may sometimes have suffered by the sudden and unforeseen rise of exchange. By slow and gradual rises, they seldom suffer; the goods being sold at proportionable prices. But war is a common calamity in all countries, and the merchants that deal with them cannot expect to avoid a share of the losses it sometimes occasions, by affecting public credit. It is hoped, however, that the profits of their subsequent commerce with those colonies may have made them some reparation. And the merchants trading to the middle colonies (New York, New Jersey, and Pennsylvania) have never suffered by any rise of exchange; it having ever been a constant rule there, to consider British debts as payable in Britain, and not to be discharged but by as much paper (whatever might be the rate of exchange) as would purchase a bill for the full sterling sum. On the contrary, the merchants have been great gainers by the use of paper-money in those colonies; as it enabled them to send much greater quantities of goods, and the purchasers to pay more punctually for them. And the people there make no complaint of any injury done them by paper-money with a legal tender; they are sensible of its benefits; and petition to have it so allowed.

colonies that have made use of paper-money | against their parting with it could arise here, have been, and are all in a thriving condition. in the country that receives it. The debt indeed to Britain has increased, because their numbers, and of course their trade, have increased; for all trade having always a proportion of debt outstanding, which is paid in its turn, while fresh debt is contracted, the proportion of debt naturally increases as the trade increases; but the improvement and increase of estates in the colonies have been in a greater proportion than their debt. New England, particularly in 1696 (about the time they began the use of paper-money) had in all its four provinces but 130 churches or congregations; in 1760 they were 530. The number of farms and buildings there is increased in proportion to the numbers of peo ple; and the goods exported to them from England in 1750, before the restraint took place, were near five times as much as before they had paper-money. Pennsylvania, before it made any paper-money, was totally stript of its gold and silver; though they had from time to time, like the neighbouring colonies, agreed to take gold and silver coins at higher nominal values, in hopes of drawing money into, and retaining it, for the internal uses of the province. During that weak practice, silver got up by degrees to 8s. 9d. per ounce, and English crowns were called six, seven, and eight shilling pieces, long before paper-money was made. But this practice of increasing the denomination was found not to answer the end. The balance of trade carried out the gold and silver as fast as they were brought in; the merchants raising the price of their goods in proportion to the increased denomination of the money. The difficulties for want of cash were accordingly very great, the chief part of the trade being carried on by the extremely inconvenient method of barter; when in 1723 paper-money was first made there, which gave new life to business, promoted greatly the settlement of new lands (by lending small sums to beginners on easy interest, to be repaid by instalments) whereby the province has so greatly increased in inhabitants, that the export from hence thither is now more than tenfold what it then was; and by their trade with foreign colonies, they have been able to obtain great quantities of gold and silver to remit hither in return for the manufactures of this country. New York and New Jersey have also increased greatly during the same period, with the use of paper-money; so that it does not appear to be of the ruinous nature ascribed to it. And if the inhabitants of those countries are glad to have the use of paper among themselves, that they may thereby be enabled to spare, for remittances hither, the gold and silver they obtain by their commerce with foreigners; one would expect, that no objection

The 3d reason is, "That the restriction has had a beneficial effect in New England."

Particular circumstances in the New Eng-immoderately fond of its modes, manufactures, land colonies made paper-money less neces- and superfluities, cannot be restrained from sary and less convenient to them. They have purchasing them by any province law; begreat and valuable fisheries of whale and cod, cause such law, if made, would immediately by which large remittances can be made. be repealed here, as prejudicial to the trade They are four distinct governments; but and interest of Britain. It seems hard therehaving much mutual intercourse of dealings, fore, to draw all their real money from them, the money of each used to pass current in all: and then refuse them the poor privilege of but the whole of this common currency not using paper instead of it. Bank bills and being under one common direction, was not bankers' notes are daily used here as a medium so easily kept within due bounds: the prudent of trade, and in large dealings perhaps the reserve of one colony in its emissions being greater part is transacted by their means; rendered useless by excess in another. The and yet they have no intrinsic value, but rest Massachusetts, therefore, were not dissatisfied on the credit of those that issue them; as with the restraint, as it restrained their neigh- paper-bills in the colonies do on the credit of bours as well as themselves; and perhaps they the respective governments there. Their bedo not desire to have the act repealed. They ing payable in cash upon sight by the drawhave not yet felt much inconvenience from it; er is indeed a circumstance that cannot attend as they were enabled to abolish their paper- the colony bills, for the reason just abovecurrency, by a large sum in silver from Bri- mentioned; their cash being drawn from them tain to reimburse their expenses in taking by the British trade: but the legal tender Louisbourg, which, with the gold brought being substituted in its place, is rather a from Portugal, by means of their fish, kept greater advantage to the possessor; since he them supplied with a currency; till the late need not be at the trouble of going to a parwar furnished them and all America with bills ticular bank or banker to demand the money, of exchange; so that little cash was needed finding (wherever he has occasion to lay out for remittance. Their fisheries too furnish money in the province) a person that is obligthem with remittance through Spain and Por-ed to take the bills. So that even out of the tugal to England; which enables them the more easily to retain gold and silver in their country. The middle colonies have not this advantage; nor have they tobacco; which in Virginia and Maryland answers the same purpose. When colonies are so different in their circumstances, a regulation, that is not inconvenient to one or a few, may be very much so to the rest. But the pay is now become so indifferent in New England, at least in some of its provinces, through the want of currency, that the trade thither is at present under great discouragement.

The 4th reason is, "That every medium of trade should have an intrinsic value; which paper-money has not. Gold and silver are therefore the fittest for this medium, as they are an equivalent; which paper never can be." However fit a particular thing may be for a particular purpose; wherever that thing is not to be had, or not to be had in sufficient quantity; it becomes necessary to use something else, the fittest that can be got, in lieu of it. Gold and silver are not the produce of North America, which has no mines; and that which is brought thither cannot be kept there in sufficient quantity for a currency. Britain, an independent great state, when its inhabitants grow too fond of the expensive luxuries of foreign countries, that draw away its money, can, and frequently does, make laws to discourage or prohibit such importations; and by that means can retain its cash. The colonies are dependent governments; and their people having naturally great respect for the sovereign country, and being thence

province, the knowledge, that every man within that province is obliged to take its money, gives the bills credit among its neighbours, nearly equal to what they have at home.

And were it not for the laws here, that restrain or prohibit as much as possible all losing trades, the cash of this country would soon be exported: every merchant, who had occasion to remit it, would run to the bank with all its bills, that came into his hands, and take out his part of its treasure for that purpose; so that in a short time, it would be no more able to pay bills in money upon sight, than it is now in the power of a colony treasury so to do. And if government afterwards should have occasion for the credit of the bank, it must of necessity make its bills a legal tender; funding them however on taxes which they may in time be paid off; as has been the general practice in the colonies.-At this very time, even the silver-money in England is obliged to the legal tender for part of its value; that part which is the difference between its real weight and its denomination. Great part of the shillings and sixpences now current are, by wearing become five, ten, twenty, and some of the sixpences even fifty per cent. too light. For this difference between the real and the nominal, you have no intrinsic value; you have not so much as paper, you have nothing. It is the legal tender, with the knowledge that it can easily be repassed for the same value, that makes threepennyworth of silver pass for sixpence. Gold and silver have undoubtedly some properties that give them a fitness above paper, as a

of whatever remains in the country; then the rising of silver above paper to that height of additional value, which its capability of exportation only gave it, may be called a depreciation of the paper. Even here, as bullion has been wanted or not wanted for exportation, its price has varied from 5s. 2d. to 5s. 8d. per ounce. This is near 10 per cent. But was it ever said or thought on such an occasion, that all the bank bills, and all the coined sil

medium of exchange: particularly their uni- | be considered as a depreciation of the values versal estimation; especially in cases where a country has occasion to carry its money abroad, either as a stock to trade with, or to purchase allies and foreign succours. Otherwise, that very universal estimation is an inconvenience, which paper-money is free from; since it tends to deprive a country of even the quantity of currency that should be retained as a necessary instrument of its internal commerce, and obliges it to be continually on its guard in making and executing, at a great ex-ver, and all the gold in the kingdom, were depense, the laws that are to prevent the trade which exports it.-Paper-money well funded has another great advantage over gold and silver; its lightness of carriage, and the little room that is occupied by a great sum; whereby it is capable of being more easily, and more safely, because more privately, conveyed from place to place. Gold and silver are not intrinsically of equal value with iron, a metal in itself capable of many more beneficial uses to mankind. Their value rests chiefly in the estimation they happen to be in among the generality of nations, and the credit given to the opinion, that that estimation will continue. Otherwise a pound of gold would not be a real equivalent for even a bushel of wheat. Any other well-founded credit, is as much an equivalent as gold and silver; and in some cases more so, or it would not be preferred by commercial people in different countries. Not to mention again our own bank bills; Holland, which understands the value of cash as well as any people in the world, would never part with gold and silver for credit (as they do when they put it into their bank, from whence little of it is ever afterwards drawn out) if they did not think and find the credit a full equivalent.

The fifth reason is, "That debtors in the assemblies make paper-money with fraudulent views." This is often said by the adversaries of paper-money, and if it has been the case in any particular colony, that colony should, on proof of the fact, be duly punished. This, however, would be no reason for punishing other colonies, who have not so abused their legislative powers. To deprive all the colonies of the convenience of paper-money, because it has been charged on some of them, that they have made it an instrument of fraud, as if all the India, bank, and other stocks and trading companies were to be abolished, because there have been, once in an age, Mississippi and South-sea schemes and bubbles.

preciated 10 per cent? Coined silver is now wanted here for change, and 1 per cent. is given for it by some bankers: are gold and bank notes therefore depreciated 1 per cent. ? The fact in the middle colonies is really this: on the emission of the first paper-money, a difference soon arose between that and silver; the latter having a property the former had not, a property always in demand in the colonies; to wit, its being fit for a remittance. This property having soon found its value, by the merchants bidding on one another for it, and a dollar thereby coming to be rated at 8s. in paper-money of New York, and 7s. 6d. in paper of Pennsylvania, it has continued uniformly at those rates in both provinces now near forty years, without any variation upon new emissions; though, in Pennsylvania, the paper-currency has at times increased from 15,000l. the first sum, to 600,000l. or near it. Nor has any alteration been occasioned by the paper-money, in the price of the necessaries of life, when compared with silver: they have been for the greatest part of the time no higher than before it was emitted; varying only by plenty and scarcity, or by a less or greater foreign demand. It has indeed been usual with the adversaries of a paper-currency, to call every rise of exchange with London, a depreciation of the paper: but this notion appears to be by no means just: for if the paper purchases every thing but bills of exchange, at the former rate, and these bills are not above one tenth of what is employed in purchases; then it may be more properly and truly said, that the exchange has risen, than that the paper has depreciated. And as a proof of this, it is a certain fact, that whenever in those colonies bills of exchange have been dearer, the purchaser has been constantly obliged to give more in silver, as well as in paper, for them; the silver having gone hand in hand with the paper at the rate above-mentioned; and therefore it might as well have been said, that the silver was depreciated.

The sixth and last reason is, "That in the middle colonies, where the paper-money has There have been several different schemes been best supported, the bills have never kept for furnishing the colonies with paper-money, to their nominal value in circulation; but that should not be a legal tender, viz. have constantly depreciated to a certain degree, whenever the quantity has been increased." If the rising of the value of any parti cular commodity wanted for exportation, is to

1. To form a bank, in imitation of the bank of England, with a sufficient stock of cash to pay the bills on sight.

This has been often proposed, but appears

Impracticable, under the present circumstances of the colony-trade; which, as is said above, draws all the cash to Britain, and would soon strip the bank.

2. To raise a fund by some yearly tar, securely lodged in the bank of England as it arises, which should (during the term of years for which the paper-bills are to be current) accumulate to a sum sufficient to discharge them all at their original value.

This has been tried in Maryland: and the bills so funded were issued without being made a general legal tender. The event was, that as notes payable in time are naturally subject to a discount proportioned to the time; so these bills fell at the beginning of the term so low, as that twenty pounds of them became worth no more than twelve pounds in Pennsylvania, the next neighbouring province; though both had been struck near the same time at the same nominal value, but the latter was supported by the general legal tender. The Maryland bills, however, began to rise as the term shortened, and towards the end recovered their full value. But, as a depreciating currency injures creditors, this injured debtors; and by its continually changing value, appears unfit for the purpose of money, which should be as fixed as possible in its own value; because it is to be the measure of the value of other things.

3. To make the bills carry an interest sufficient to support their value.

This too has been tried in some of the New England colonies; but great inconveniences were found to attend it. The bills, to fit them for a currency, are made of various denominations, and some very low, for the sake of change; there are of them from 102. down to 3d. When they first come abroad, they pass easily, and answer the purpose well enough for a few months; but as soon as the interest becomes worth computing, the calculation of it on every little bill in a sum between the dealer and his customers, in shops, warehouses, and markets, takes up much time, to the great hinderance of business. This evil, however, soon gave place to a worse; for the bills were in a short time gathered up and hoarded; it being a very tempting advantage to have money bearing interest, and the principle all the while in a man's power, ready for bargains that may offer; which money out on mortgage is not. By this means numbers of people became usurers with small sums, who could not have found persons to take such sums of them upon interest, giving good security; and would therefore not have thought of it; but would rather have employed the money in some business, if it had been money of the common kind. Thus trade, instead of being increased by such bills, is diminished; and by their being shut up in chests, the very end of making them (viz. to furnish a medium

of commerce) is in a great measure, if not totally defeated.

On the whole, no method has hitherto been formed to establish a medium of trade, in lieu of money, equal in all its advantages, to bills of credit-funded on sufficient taxes for discharging it, or on land-security of double the value, for repaying it at the end of the term; and in the mean time, made a GENERAL LE

GAL TENDER.

On Coin.

THE clamour made of the great inconveniences, suffered by the community in regard to the coin of this kingdom, prompted me in the beginning of his majesty's reign to give the public some reflections on coin in general; on gold and silver as merchandise and I added my thoughts on paper passing as money.

As I trust the principles then laid down are founded in truth, and will serve now as well as then, though made fourteen years ago, to change any calculation, would be of little use.

Some sections, in the foregoing essay of principles of trade, might in this appendix, appear like a repetition, have been omitted.

I always resolved not to enter into any particular deduction from laws relating to coin; or into any minutia, as to accurate nicety, in weights. My intention was, and still is, no more than to endeavour to show, as briefly as possible; that what relates to coin, is not of such a complex, abstruse nature as it is generally made: and that no more than common justice with common sense are required, in all regulations concerning it.

Perhaps more weighty concerns may have prevented government doing more in regard to coin, than ordering quarter guineas to be made; which till this reign had not been done.

But as I now judge by the late acts relating to gold coin, that the legislature is roused: possibly they may consider still more of that, as well as of silver coin.

Should these reflections prove of any public utility, my end will be answered.

1. Coins are pieces of metal, on which an impression is struck; which impression is understood by the legislature to ascertain the weight, and the intrinsic value, or worth of each piece.

2. The real value of coins depends not on a piece being called a guinea, a crown, or a shilling; but the true worth of any particular piece of gold, or silver, is what such piece contains of fine or pure gold or silver.

3. Silver and copper being mixed with gold, and copper with silver, are generally understood, to render those metals more

durable when circulating in coins: yet air and moisture evidently affect copper, whether by itself or mixed with other metal; whereas pure gold or silver are much less affected or corroded thereby.

4. The quantity of silver and copper so mixed by way of alloy, is fixed by the legislature. When melted with pure metal, or added, or extracted to make a lawful proportion, both gold and silver are brought to what is called standard. This alloy of silver and copper is never reckoned of any value. The standard once fixed, should ever be invariable; since any alteration would be followed by great confusion, and detriment to the state.

5. It is for public convenience, and for facilitating the bartering between mankind for their respective wants, that coins were invented and made; for were there no coins, gold and silver might be made, or left pure; and what we now call a guinea's worth of any thing, might be cut off from gold, and a crown's worth from silver, and might serve, though not so commodiously as coin.

6. Hence it is evident that in whatever shape, form, or quality, these metals are, they are brought to be the most common measure between man and man, as serving to barter against, or exchange for, all kinds of commodities; and consequently are no more than an universal accepted merchandise: for gold and silver in bullion, that is to say in an uncoined mass, and gold or silver in coin, being of equal weight, purity, and fineness, must be of equal value, the one to the other: for the stamp on either of these metals, duly proportioned, neither adds to, nor takes from their intrinsic value?

8. 62 shillings only, are ordained by law to be coined from 12 ounces of standard silver: now following the proportion above mentioned of 15 one fifth to 14 one half, no regard being necessary as to alloy, 65 shillings should be the quantity cut out of those 12 ounces.

9. No everlasting invariable fixation for coining, can be made from a medium of the market price of gold and silver, though that medium might with ease be ascertained so as to hinder, either coined gold or silver from be coming a merchandise: for whenever the price shall rise above that medium, so as to give a profit; whatever is coined will be made a merchandise. This in the nature of things, must come from the general exchangings, circulation, and fluctuation in trade, and cannot be hindered; but assuredly the false proportions may be amended by the legisla ture, and settled as the proportion between gold and silver is in other nations; so as not to make, as now is the case, our coined silver a merchandise, so much to be preferred to the same silver uncoined.

10. What has been said seems to be selfevident; but the following calculations made on the present current price of silver and gold, may serve to prove beyond all doubt, that the proportion now fixed between gold and silver should be altered and fixed as in other countries.

By law, 62 shillings are to be coined out of one pound, or 12 ounces of standard silver. This is 62 pence an ounce. Melt these 62 shillings, and in a bar, this pound weight at market will fetch 68 pence an ounce, or 68 shillings the pound. The difference therefore between coined and uncoined silver in Great Britain is now nine and two thirds per cent.

Out of a pound or 12 ounces of standard gold, 44 guineas and are ordained to be coined. This is 31. 17s. 104d. an ounce. Now the current market price of standard gold is 31. 19s. an ounce, which makes not quite 1 per cent. difference between the coined and uncoined gold.

7. The prices of gold and silver as merchandise, must in all countries, like other commodities, fluctuate and vary according to the demand; and no detriment can arise therefrom, more than from the rise and fall of any other merchandise. But if when coined, a due proportion of these metals, the one to the other, be not established, the disproportion will be felt and proved; and that metal wherein the excess in the proportion is allowed, will preferably be made use of, either in exportation, or in manufacture; as is the case now, in this kingdom, in regard to silver coin, and which, in some measure, is the occasion of its scarcity. For so long as 15 ounces and about one fifth of pure silver in Great Britain, are ordained, and deemed, to be equal to 1 ounce of pure gold, whilst in neighbouring states, as France and Holland, the proportion is fixed only 14 and a half ounces of pure silver, to one ounce of pure gold; it is very evident, that our sil-proper proportion fixed in the value of one ver when coined, will always be the most acceptable merchandise, by near five in the hundred, and consequently more liable to be taken away, or melted down, than before it received the impression at the mint.

The state, out of duties imposed, pays for the charge of coining, as indeed it ought: for it is for public convenience, as already said, that coins are made. It is the current market price of gold and silver, that must govern the ́ carrying it to the mint. It is absurd to think any one should send gold to be coined that should cost more than 31. 17s. 104. an ounce, or silver more than 62 pence the ounce: and, as absurd would it be, to pretend, that those prices only shall be the constant invariable prices. It is contended that there is not a

metal to another, and this requires alteration.

11. It may be urged, that should the legis lature fix the proportion of silver to gold as in other countries, by ordering 65 shillings instead of 62 to be cut out of a pound of stand