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may yet be prejudicial to their being sold abroad, restrict their consumption at home, and even insure to foreign commodities, which are not liable to it, a preference over those which are burthened with this duty. * 2. It keeps bullion from the countries where it is deprived of the facility of being converted into money, or where, at least, that faculty is burthened with a duty; and consequently it must render coin scarcer than in countries where bullion is converted into money without paying any duty or seignorage. Every thing therefore tends to shew, that even the smallest duty upon coinage is of no avail to keep metallic money in the country, that it alters its destination and its functions, and injures the general circulation of the produce of labour. Another question, originating in the very mature of money, has occupied the attention of governments and philosophical inquirers, and has not yet been generally answered ; that is, whether either gold or silver alone ought to be admitted as money, or whether equal favour ought to be shewn to both these metals. The doubts on this question arise from the circumstance, that if it be difficult to fix the fluctuating exchangeable value of money, the inconvenience is still more serious when the exchangeable value of two metals is to be fixed, which, varying in their value, render commercial exchanges unequal, and subject them to chances which carry confusion into mercantile operations.

Suppose a person sells four quarters of wheat for tes guineas. If gold and silver perform alike the functions of money, the purchaser may pay the ten guineas either in gold or in silver : yet it may not be immaterial to the vender, whether he be paid in gold or in silver. If the proportion between the two metals be not accurate ; if gold, which, according to its marketprice, should be fixed in the proportion of fifteen to one, be only fourteen and a half, the buyer will pay in silver, and the seller, instead of receiving ten guineas, or ten pounds ten shillings, will actually get but about ten pounds two shilliags. Should the contrary happen, should gold be rated fifteen and a half, when its market-price is fifteen ; then the buyer will pay in gold, and the vender again will only receive about ten pounds two shillings instead of ten pounds ten shillings. This fact may appear of small importance at first sight, because individuals become alternately venders and purchasers; and what they lose in one transaction, they regain in the other. But this view of the matter is evidently erroneous and defective. Most commodities are exchanged by the intervention of merchants, who, when they make their purchases, pay in the least advantageous coin ; and when they sell, they take care to fix the prices as if they were to be paid in the least favourable coin : so that the fluctuation in the value of gold and silver coin gives the trading class, in every instance, an infallible advantage over the labouring and productive classes. The inconvenience of two metallic currencies was early observed by the best understandings, Locke saw no other remedy for it, than to attribute the function of money exclusively to silver. His opinion has been followed by most commercial nations, and, some slight differences excepted, gold is every-where considered as a merchandize, and silver alone performs thé functions of money. * This example has been neglected by nations less familiar with the operations of commerce. In spite of the doctrine of all good writers, and notwithstanding the efforts of all enlightened minds, some nations have not ceased to admit both gold and silver as money ; which occasions considerable inequalities in their dealings with other nations, and subjects them to infallible and unexpected losses. Let it however not be inferred from this theory, that all nations ought suddenly to apply it to their monetary system ; local and temporary considerations may oppose the actual depriving gold of the functions of money, or at least require important modifications in the operation. The care of repairing the evils occasioned by time must sometimes be left to time, and, as I have frequently observed in the course of this work, it is not always in the power even of the most enlightened governments to, attain the end pointed out by the philosophical inquirer. Between practical truth and speculative doctrines, the interval is immense, and it is to their approximation in proper times, that the philosopher confines his wishes, and that governments ought to direct their efforts.

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* Such as Hambu gh. I,ubeck. Bromen, Dantzick, and Holland. Such as Hamburgh, subeck, Bremen, Dantzick, and Hollam

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It is only since 1728, that England has given currency to gold.

Another question, more interesting, more extensive and more difficult to resolve, is, whether there be a known and fixed proportion between money and the produce which it is to circulate, and, in case the exist ence of such a proportion should be doubted, whether the abundance of metallic money be beneficial, injurious, or indifferent to the progress of wealth. Many celebrated writers on subjects connected with political economy have examined this question : but their opinions are mere conjectures, on which no positive doctrine can be grounded. Sir 17'illiam Petty thought that England required a quantity of money equal to half of the annual rent of her lands, to a fourth of the rent of dwellinghouses, to the weekly expences of the people, and to the value of a fourth of all commodities exported. D'Avenant, who quotes the opinion of Sir William Petty, regards it as extremely well founded. * Cantilion thinks, that the money which circulates in the different countries of Europe is generally equal to at least half of the produce of the soil, and at the utmost to two thirds of that produce +. JIonfesquieu thinks, that the quantity of inoney is pretty nearly indifferent, because the rising or sinking of its value proportionates it to all wants. “ If we compare,” say this illustrious author, “ the mass of gold and silver which is in the world with the amount of existing merchandize, it is certain that every commodity or merchandize in particular may be

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* On the i'rotection and Cares due to Trade, vol. i. page 410. + Esso su" (a Nature du Commerce, liv. ii, chap. 3.

compared to a certain portion of the whole mass of gold and silver. As the total amount of one is to the total amount of the other, so will be a portion of one to the portion of the other. Suppose there be but one commodity or merchandize in the world, or only one that is purchased, and that it be divided like metallic currency, that portion of merchandize will correspond to a portion of the metallic currency, half of the amount of one to half of the amount of the other, the tenth, the hundredth, the thousandth part of one to the tenth, the hundredth, the thousandth of the other : but as that which constitutes the property of men is not all at once in trade, and as the metals or coins which are the representatives of that property are neither in trade all at the same time, prices will be fixed in the compound ratio of the totality of commodities to the totality of representative coins, and of the totality of commodities actually in trade to the totality of the representative coins actually current; and as commodities which are not in trade to-day may be so to-morrow, and as the coin which is not in circulation to-day may return to it to-morrow, the fixing of the price of things is always chiefly dependent on the proportion of the total amount of commodities to the total amount of representative coin.” + y Adam Smith has neither adopted nor combated an

opinion on this point. He contents himself j observing, that “ what is the proportion which the circulating money of any country bears to the whose

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* Fsprit des Lois, liv. xxii. chap. 7.

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