I think I can satisfy the reader, who will be at the pains to consider what I have already written, that it is practicable to retain a great portion of our gold in circulation as coin.

We must consider that when we have a silver standard, gold and silver will be relatively to each other, as coin, in the exact opposite to what they are now. Silver is now an article only of merchandise; it does not, as silver coin, pass according to its intrinsic value as silver; and gold is now exclusively our coin, as a measure of value. Silver will then be exclusively our coin as a measure of value, and gold will be only merchandise; as our silver coins now circulate as tokens, representing fractional parts of the gold pound sterling, so then our gold coins may be made to circulate as tokens relatively to the silver crowns, as fractional parts of the silver pound sterling. To accomplish this, we must place the gold coins in the same relative position to the silver coins, as the silver coins now occupy relatively to the gold coin.

As the silver coins now contain about 74 per cent. less than they should contain of silver, to be equal in value as silver bullion to the gold coin, so the gold coins must contain about 7 per cent. less gold than they should contain to be equal in value, as bullion, to the silver coin. The present gold coin should be called in to prevent the inconvenience of a double standard.

The gold sovereign, or by whatever name it may be called, must contain about 7 per cent. less weight than the present sovereign, and be declared by law exchangeable for twenty shillings or four crowns. The half-sovereign should be also coined of half the weight of the new sovereign, and be declared by law to be exchangeable for two crowns or ten shillings. The present sovereigns are coined after the rate of 441 guineas, or 467. 14s. 6d., to the pound of standard gold of twelve ounces troyes. If we add 7 per cent,

to 46l. 14s. 6d., which will be 37. 10s. 1d., there will be 50l. 4s. 7d. If the pound troyes of gold were coined into fifty sovereigns, we should have a gold coinage about 7 per cent. less valuable as bullion, than as coin. The pound troyes might also be coined into 100 half-sovereigns. The shillings would be made exchangeable at the rate of five shillings to the crown, and the other silver coins at the same ratio. As the limitation of the amount for which this gold coin should be a legal tender is a matter simply of public convenience, and not affecting its value, whilst it is declared exchangeable by law with the more valuable legal tender coin, this amount may be determined as may be judged most expedient, the State alone having the privilege to coin the gold coin and the other ancillary coins. The sovereign might bear the device, on the one side, of the effigies of the Sovereign, and, on the other, the

crown.

It would be immaterial to the Government, as regards the new coinage, at what price silver bullion may be, except for the difference between the weight of the old and the new crowns; the new crowns would be issued at the same price for which the bullion was purchased, and there would be neither loss nor gain; on account of the nearness of size between the present crowns and the new ones, it would be advisable to call in the present crowns in circulation, and to exchange them for the new crowns, and the difference in the weight of the two would be the only loss added to the expense of coining them.

If the new coinage were to embrace all the silver coins, the half-crowns, shillings, sixpences, and fourpennies, if these coins were called in, and new coins issued to this amount, having the intrinsic value equal to the nominal value, there would be a loss upon the coinage equal to the difference of the weight of the new and the old coins now circulating. But

as tokens relatively to the crown-piece, in the same manner as they now circulate relatively to the sovereign, this additional expense would be saved.

If we suppose the present gold circulation to be thirty millions, and that one half were to be retained still in our circulation, it would not perhaps be too high an estimate. Let us suppose fifteen millions of the circulation to be filled by the new sovereigns, and that these sovereigns were issued at the rate of fifty sovereigns to the pound of gold, there would be a large profit or seignorage upon the gold coin.

The profit upon the gold coinage would be the difference between 46l. 14s. 6d., at which the gold coins would be received, and 50l. per lb., at which they would be issued.

It would require 300,000 lbs. of standard gold to coin 15,000,000 of sovereigns at the rate of fifty sovereigns to the pound. £ 15,000,000

The 300,000 lbs. at 46l. 14s. 6d.

per lb. would cost

14,017,500

£ 982,500

The gain upon the gold would be thus 982,500l. against the expense of the coinage and the difference in weight between the old crowns called in and the new crowns issued for the amount.

I know not what this expense may be, it may not exceed 100,000l.

If 10,000,000 of the new sovereigns circulated, there would be a gain of 655,000l., and so in proportion for a smaller quantity.

Even with our present gold standard and our present currency, I see no reason why gold pieces of the current value of fifteen shillings each might not be coined, and made exchangeable with the gold sovereign at five per cent. beyond their intrinsic value as gold bullion; the State reserving to itself the exclusive privilege of coining them, and declaring them, by law, to be exchangeable with the gold sovereigns

at the rate of four of these gold pieces for three sovereigns, and not to be a legal tender in the payment of debt beyond three pounds, or sovereigns: these coins would not be melted or exported; they would be confined to our circulation by the same rule of private interest, as the present shillings. These coins might have the device of the effigies of the Sovereign on one side, and on the other the crown, and under it 15 shillings, the sum for which it was current these coins might have what name the Sovereign may please.

If five millions of these coins were issued in the United Kingdom, they would yield a seignorage of 5 per cent. on five millions, or two hundred and fifty thousand pounds. They would circulate as sovereigns now circulate, and might be weighed at the banks: such a coin might be very convenient, and may be issued in such quantities as may be thought advisable and gradually introduced - but I doubt if they should exceed, in any case, in value, one fourth of the value of the sovereigns in circulation.

This calculation is founded upon the principle that whatever coin, of whichever metal, whether gold or silver, is declared to be the legal tender of value to any amount, that coin will determine the value of the whole currency, provided the other coins of different metals are made by law exchangeable with the legal tender coin at a rate higher than they are intrinsically worth, and the right of coinage of the ancillary coins is reserved to the State.

F

CHAP. VI.

ON THE FOREIGN EXCHANGES.

THE following extract from Adam Smith will convey to the reader a true account of the nature of commercial exchange (b. iv. c. 3. v. ii. p. 272.) :

:—

"When for a sum of money paid in England, containing, according to the standard of the English mint, a certain number of ounces of pure silver, you receive a bill for a sum of money to be paid in France, containing, according to the standard of the French mint, an equal number of ounces of pure silver, exchange is said to be at par between England and France. When you pay more, you are supposed to give a premium, and exchange is said to be against England, and in favour of France. When you pay less, you are supposed to get a premium, and exchange is said to be against France, and in favour of England."

Adam Smith reasons as if the Standard in France and in England was the same, and as if both nations had a silver standard; he observes (b. i. c. 5. v. i. p. 52.):.

"In England, therefore, and for the same reason, I believe in all other modern nations of Europe, all accounts are kept, and the value of all goods, and of all estates, is generally computed in silver; and when we mean to express the amount of a person's fortune, we seldom mention the number of guineas, but the number of pounds sterling which we suppose would be given for it."

If England and France had the same measure of value, whether silver or gold, the par would be the like weight of silver or gold; to have this par it is evident that the metal forming the measure of value must be the same in both countries, as the deviation