itself of this method of checking the export of specie to Asia. For this purpose it was directed, that all exports of specie should be made in dollars of its own coinage, hoping in this way to make the exporters give a preference to the domestic products of its own territory. Thus, after wantonly depreciating the Spanish dollar, without prejudice, it is true, to the specie remaining current within the territory of the Union, it went on further to enjoin its use in the least profitable way, viz. in the commercial intercourse with those nations, that set the least value on it. The natural course would have been, to suffer the value exported to go out of the country in the form, that might offer the prospect of the largest returns. Self-interest might have been safely relied on in this particular. (1)

But what are we to think of the wisdom of the Spanish government, which was enabled, by the confidence in its good faith in the execution of its coinage, to export dollars with a profit, and sell them abroad at an advance upon their intrinsic value; and yet thought fit to prohibit so advantageous a traffic, which would have furnished a vent to a product of the national soil, worked up by domestic industry for an ample recompense?

Though a government be the exclusive coiner of money, and is by no means bound to coin gratuitously, it can not with justice deduct the expense of coinage from its payments, in discharge of its own contracts. If it has engaged to pay a million, say for supplies advanced, it can not honestly say to the contractor: "We bargained to pay a million, but we pay you in specie just coined; and therefore shall deduct 20,000 fr., more or less, for the charges of coinage." In fact, all pecuniary engagements, contracted by government or individuals, virtually imply a promise to pay a given sum, not in bullion but in coin. The act of exchange, wherein the bargain originated, is effected with the implied condition, on behalf of one of the contracting parties, to give a commodity somewhat more valuable than silver bullion; namely, silver in crown pieces, or coin of some denomination or other. The virtual contract of government is to pay in coined money; and since, in consequence of that implied condition, it obtains a greater quantity of goods, than it will, if the bargain be to pay in bul

(1) This paragraph contains three errors in relation to the coinage of dollars by the United States, and the exportation of specie, which it is of importance to point out: 1st. Spanish dollars are not, and never have been, simply re-stamped at our mint, without varying their weight or standard: 2d. A pound, Troy, of Spanish dollars, contains 10oz. 15dwts. of fine silver: A pound, Troy, of American dollars contains 10oz. 14dwts. 5 grains of fine silver: 3d. No law has ever been enacted by Congress, directing the exportation of specie to be made in dollars of our own coinage; nor has the executive the power to regulate, or in any manner interfere with the exportation of specie from the United States. AMERICAN EDITOR.

lion. In this instance, it offers the charge of coinage into the bargain at the time of concluding the contract, and thereby obtains better terms, than if it is in the habit of paying in bullion.

The charges of coinage should be deducted from the metal brought to the mint to be coined, at the time of its re-delivery in a coined state.

These considerations lead us to the necessary conclusions, -that the manufacture of bullion into coin increases the value of the metal, in the ratio of the additional convenience resulting to the community, from the circumstance of coinage, and not an item further, whatever charges or duties the state may attempt to saddle it with;* that a government, by monopolizing the business of coining, may make a profit to the whole extent of this accession of value; that it can not possibly advance this profit any further, in its discharge of engagements, fairly and freely entered into; and that it can not do so with regard to prior engagements, without committing an act of partial bankruptcy.

Moreover, it is evident, that, in all dealings between individuals, the public authority has still less power, by means of the impression of its die, to make the commodity, acting as money, pass for more than its intrinsic value, plus the value added by the fashion it receives. Vain will be any enactment, that the stamp impressed shall give to an ounce of silver a specific or determinate value; it will never buy more goods, than an ounce of silver, bearing that impression, is worth at the time being.

SECTION V.

Of Alterations of the Standard Money.

THE first thing to be observed on this head is, that the public authority has generally taken upon itself to fix arbitrarily the commodity, that shall serve as money. This assumption, on its part, has little inconvenience in itself; for the interests of the nation and of the ruling power happen to be exactly the same. Should a government attempt to force an ill-adapted medium into circulation, it would sustain a loss itself on every bargain, and the people would, by degrees, adopt some other

1n Spanish America, a higher duty is charged, amounting according to Humboldt to 11 1-2 per cent. on silver, and 3 per cent. on gold, over and above the actual charges of coinage; for the government allows no bullion to be exported in an uncoined state. So that, in fact, this is not a seignorage, but a duty on exportation, exacted at the time of converting the bullion into coin.

medium. Thus, the first issue of coined money among the Romans was their King Numa, and his coinage was of copper, which at that time of day was the properest metal for the purpose; for, before the time of Numa, the Romans knew no other money but copper in bars. On the same principle, modern governments have made choice of gold and silver, which would undoubtedly have been selected by the general accord of individuals, without the interference of their rulers.

But the sovereign power, being firmly persuaded, that its mandate was necessary and competent to invest any commodity whatever with the currency of money, succeeded in impressing its subjects with the same notion during the darker ages, and that too at the very time, that individuals, with a view to personal interest, were acting upon principles diametrically opposite; for, whoever was dissatisfied with the authorized money, either abstained from selling altogether, or disposed of his goods in some other way.

This error led to another of much more serious mischief, that has overset all order whatever.

The public authority persuaded itself, that it could raise or depress the value of money at pleasure; and that, on every exchange of goods for money, the value of the goods adjusted itself to the imaginary value, which it pleased authority to affix to it, and not to the value naturally attached to the agent of exchange, money, by the conflicting influence of demand and supply.

Thus, when Philip I. of France, adulterated the livre of Charlemagne, containing 12oz. of fine silver,* and mixed with it a third part alloy, but still continued to call it a livre, though containing but 8oz. of fine silver, he was nevertheless fully persuaded, that his adulterated livre was worth quite as much as the livre of his predecessors. Yet, it was really worth 1-3 less than the livre of Charlemagne. A livre in coin would purchase but 2-3 of what it had done before. However, the creditors of the monarch, and of individuals, got paid but 2-3 of their just claims; land-owners received from their tenants but 2-3 of their former revenue, till the renewal of leases placed matters on a more equitable footing. Abundance of injustice was committed and authorized: but, after all, it was impossible to make Soz. of fine silver equal to 12.†

The measure of weight called a livre contained 12oz. in the time of Charlemagne.

According to the principles established suprà Sect. 3. of this Chapter, there is reason to believe, that the value of the adulterated livre of 8oz. of fine silver might have been kept up to that of the old livre of 12oz., if the volume of the coin had not been augmented. But the rise of moneyprices, consequent upon the adulteration of the coin, is a ground of presumption, that the government, with a view to profit by this monetary operation, ordered a re-coinage, and made 12 pieces out of 8, by the addition of alloy, so as to increase the total quantity proportionately to the reduction of the standard of quality.

In the year 1113, the livre, as it was still called, contained no more than 6oz. of fine silver. At the commencement of the reign of Louis VII. it had been reduced to 4oz. St. Louis gave the name of livre to a quantity of silver weighing but 2oz. 6 gros. 6 grains.* At the era of the French revolution, the money bearing that name weighed only the 1-6 of an oz.; so that it had been reduced to 1-72 of its original standard of weight or quality in the days of Charlemagne.

I take no notice, at present, of the great fall experienced in the relative value of fine silver to commodities at large, which has been reduced so low as 1-4 of its former amount; but this is foreign to the subject of the present section, and I shall take occasion to speak of it hereafter.

Thus the term, livre tournois, has at different times been applied to very different quantities of fine silver. The alteration has been effected, sometimes by reducing the size and weight of the coin bearing that denomination, sometimes by deteriorating the standard of quality, that is to say, mixing up a larger portion of alloy, and a smaller one of pure metal; and, sometimes, by raising the denomination of a specific coin; making, for instance, what was before a 2fr. piece pass under the name of one of 3fr. As no account is ever taken of any thing but the pure silver, which is the only valuable substance in silver coin, all these expedients have had a similar effect; for this reason; that they all, in fact, reduced the quantity of silver contained in what was called a livre tournois. And this is what all French writers, in compliment to the royal ordinances, have dignified by the term, raising the standard; on the ground, that the nominal value of the coin is raised by these operations; which might, with much more propriety, be said to lower the standard, since the metal, which alone constitutes the money, is thereby reduced in quantity.

Though the quantity of metal in the livre has been continually decreasing from the days of Charlemagne till the present period, many of our monarchs have, at different times, adopted a contrary course, and advanced the weight and standard of quality, particularly since the reign of St. Louis. The motives for deterioration are evident enough: it is extremely con venient to pay one's debts with less money than one borrowed. But kings are not only debtors; they are very frequently creditors too. In the matter of taxation, they stand precisely in the same relative position to the subject, as landlords to their tenants. Now, if every body be enabled by law to pay their debts and discharge their contracts with a less amount of silver than bargained for, the subject, of course, can pay his taxes, and the tenant his rent, with a smaller quantity of that metal. And, although the king received less silver, yet he continued

*We find in the Prolegomènes of Le Blanc, 25, that the silver sol of St. Louis weighed 1 gros. 7 1-2 grains which, multiplied by 20, makes 2oz. 6 gros. 6 grains, the livre.

to spend as much as before; for the nominal price of commodities rose, in proportion to the diminution of metal in the coin. When what was before 3 fr. was declared by law to be 4 fr., the government was obliged to pay 4 fr. where it before paid but 3 fr.; so that it was necessary, either to increase the old, or to impose new taxes; in other words, the government, to obtain the same quantity of fine silver, was obliged to demand a greater number of livres from the subject. This course, however, was always odious, even when it really made no difference in the real pressure of taxation, and was often quite impracticable. Recourse was, therefore, had to restoration of the coin to the higher standard. The livre being made to contain a greater weight of silver, the nation really paid more silver in paying the same number of livres.* Thus we find, that the ameliorations of the coin commence nearly about the same period, as the establishment of permanent taxation. Before that innovation, the monarch had no personal motive for increasing the intrinsic value of the coin he issued.

It would be a great mistake to suppose, that the frequent variations of standard alluded to, were effected in the same clear and intelligible manner, which I have adopted to explain them. Sometimes the alteration, instead of being openly avowed, was kept secret as long as possible;t and this attempt at concealment gave occasion to the barbarous technical jargon used in this branch of manufacture. At other times, one denomination of coin was altered, while the rest were left untouched; so that, at a given period, a livre, paid in one denomination, contained more silver than if it paid in another. Finally, to throw the matter in still greater obscurity, the subject was commonly forced to reckon up his accounts, sometimes in livres and sous, sometimes in crowns, and to pay in coin representing neither livre, sol, nor crown, but either fractions or multiplies of these several denominations. Princes, that resort to such pettyfogging expedients, can be viewed in no other light, than as counterfeiters armed with public authority.

The injurious effect of such measures upon credit, commercial integrity, industry, and all the sources of prosperity, may

• The same expedient was resorted to by that monster of prodigality, the Roman Emperor Heliogabalus. The taxes of the empire were payable in specific gold coin, called aurei, and not in gold by the tale: and the emperor, to enlarge his receipts, made a new issue of aurei, weighing as much as 24oz. each. The virtuous Alexander Severus, actuated by an opposite motive, made a considerable reduction of the weight.

Philip de Valois, in his official instructions to the officers of the mint, A. D. 1350, enjoins the utmost secrecy on the subject of the purposed adulteration, even with the sanction of an oath, for the express purpose of taking in the commercial classes: directing them "to put a good face upon the matter of the course of exchange of the mark of gold, so that the intended adulteration might not be discovered." Many similar instances are to be met with in the reign of King John. Le Blanc, Traité Hist. des Monnaies, p. 251.