SHORT

OBSERVATIONS

ON

A PRINTED PAPER,

ENTITLED,

For encouraging the coining silver money in England, and after for keeping it here.

THE

HE author says, "Silver yielding the proposed "2d. or 3d. more by the onnce, than it will do "by being coined into money, there will be none coined "into money; and matter of fact shows there is none.

It would be hard to know what he means, when he says, "silver yields 2d. or 3d. more by the ounce, than "it will do by being coined into money:" but that he tells us in plain words at the bottom of the leaf, "that "an ounce of silver uncoined is of 2d, more value "than after it is coined it will be;" which, I take the liberty to say, is so far from being true, that I affirm it is impossible to be so. For which I shall only give this short reason: viz. Because the stamp neither does, nor can take away any of the intrinsic value of the silver; and therefore an ounce of coined standard silver, must necessarily be of equal value to an ounce of uncoined standard silver. For example; suppose a goldsmith has a round plate of standard silver, just of the shape, size, and weight of a coined crown-piece, which, for brevity's sake, we will suppose to be an ounce; this ounce of standard silver is certainly of equal value to any other ounce of unwrought standard silver in his shop; away he goes with his round piece of silver to the Tower, and has there the stamp set upon it; when he brings this numerical piece back again to his shop coined, can any one imagine, that it is now 2d. less worth than it was, when he carried it out smooth, a quarter of an hour before; or, that it is

I 3

not

118

Considerations of the lowering of Interest,

not still of equal value to any other ounce of unwrought standard silver in his shop? He that can say it is 2d. less worth, than it was before it had the king's image and inscription on it, may as well say, that 60 grains of silver, brought from the Tower, are worth but 58 grains of silver in Lombard-street.

But the author very warily limits this ill effect of coinage only to England; why it is in England, and not every where, would deserve a reason.

But let us grant it to be true, as our author affirms, that coined silver in England is one-thirtieth worse, or of less value, than uncoined; the natural consequence from this, if it be true, is, that it is very unfit that the mint should be employed in England, where it debases the silver one thirtieth; for, if the stamp lessens the value of our silver this year, it will also do so the next, and so on to the end of the world, it always working the same way. Nor will the altering the denomination, as is proposed, at all help it.

But yet he thinks he has some proof for his proposition, because it is matter of fact that there is no money coined at the mint. This is the great grievance, and is one indeed, but for a different reason from what seems to inspire that paper.

The matter in short is this; England sending more consumable commodities to Spain than it receives from thence, the merchants, who manage their trade, bring back the overplus in bullion, which, at their return, they sell as a commodity. The chapmen, that give highest for this, are, as in all cases of buying and selling, those who can make most profit by it; and those are the returners of our money, by exchange, into those countries, where our debts, any way contracted, make a need of it for they getting 6, 8, 10, &c. per cent. according to the want and demand of money from England there, and according to the risque of the sea, buy up this bullion, as soon as it comes in, to send it to their correspondents in those parts, to make good their credit for the bills they have drawn on them, and so can give more for it than the mint-rate, i. e. more than equal weight of milled money for an equal weight

of

1

of standard bullion; they being able to make more profit of it by returns.

Suppose the balance of our trade with Holland were in all other commodities equal, but that in the last EastIndia sale we bought of them of East-India commodities to the value of a million, to be paid in a month; within a month a million must be returned into Holland; this presently raises the exchange, and the traders in exchange sell their bills at high rates; but the balance of trade being (as is supposed in the case) equal in all other commodities, this million can no way be repaid to their correspondents, on whom those bills were drawn, but by sending them money, or bullion, to reimburse them.

This is the true reason why the bullion brought from Spain is not carried to the mint to be coined, but bought by traders in foreign exchange, and exported by them, to supply the overplus of our expences there, which are not paid for by our commodities. Nor will the proposed raising of our money, as it is called, whether we coin our money for the future one thirtieth, or one twentieth, or one half lighter than now it is, bring one ounce more to the mint than now, whilst our affairs in this respect remain in the same posture. And I challenge the author to show that it will; for saying is but saying. Bullion can never come to the mint to be coined, whilst the over-balance of trade and foreign expences are so great, that to satisfy them, not only the bullion your trade in some parts now yearly brings in, but also some of your formerly coined money is requisite, and must be sent out: but when a change in that brings in and lodges bullion here, (for now it seems it only passes through England) the increase of silver and gold staying in England will again bring it to the mint to be coined.

This makes it easily intelligible, how it comes to pass, that when now at the mint they can give but 5%. 2d. per ounce for silver, they can give 5s. 4d. the ounce in Lombard-street, (which is what our author means when he says, "silver is now worth but 5s. 2d. the ounce at "the mint, and is worth 5s, 4d, elsewhere.") The

14

reason

reason whereof is plain, viz. Because the mint, giving weighty money for bullion, can give so much and no more for silver than it is coined at, which is 5s. 2d. the ounce, the public paying all the odds, that is between coined and uncoined silver, which is the manufacture of coinage: but the banker, or returner of money, having use for silver beyond sea, where he can make his profit of it by answering bills of exchange, which he sells dear, must either send our money in specie, or melt down our coin to transport, or else with it buy bullion.

The sending our money in specie, or melting it down, has some hazard, and therefore, if he could have bullion for 5s. 2d. per ounce, or a little dearer, it is like he would always rather choose to exchange corn for bullion, with some little loss, rather than run the risque of melting it down for exportation.

But this would scarce make him pay 2d. in the crown, which is almost three and an half per cent. if there were not something more in it, than barely the risque of melting, or exportation; and that is the lightness of the greatest part of our current coin. For example, N. has given bills for thirty thousand pounds sterling in Flanders, and so has need of ten thousand weight of silver to be transported thither; he has thirty thousand pounds sterling by him in ready money, whereof five thousand pounds is weighty milled money; what shall hinder him then from throwing that into his meltingpot, and so reducing it to bullion, to be transported? But what shall he do for the other twenty-five thousand pounds, which, though he has by him, is yet clipped and light money, that is at least twenty per cent. lighter than the standard? If he transports or melts down this, there is so much clear loss to him; it is therefore more advantage for him to buy bullion at 5s. 4d. the ounce with that light money, than to transport, or melt it down; wherein, though the seller of the bullion has less weight in silver than he parts with, yet he finds his account, as much as if he received it in weighty coin, whilst a clipped crown-piece, or shilling, passes as well in payment for any commodity here in Eng

land

land as a milled one. Thus our mint is kept from coining.

But this paper, For encouraging the coining, &c. would fain have the mill at work, though there be no grist to be had, unless you grind over again what is ground already, and pay toll for it a second time: a proposition fit only for the miller himself to make; for the meanest housewife in the country would laugh at it, as soon as proposed. However, the author pleases himself, and thinks he has a good argument to make it pass, viz. because the toll to be paid for it will not amount to three hundred and thirty thousand pounds, as is said in a late treatise about raising the value of money, p. 170. for, he says that writer is mistaken, in saying that 3s. and 6d. is allowed at the mint for the "coinage of every pound troy," whereas there is but sixteen-pence halfpenny there allowed for the same; which sixteen-pence halfpenny being above one-third of 3s. 6d. it follows by his own computation, that the new coining our money will cost the nation above one hundred and ten thousand pounds; a small sum in this our plenty of riches, to be laid out for the purchasing these following inconveniencies, without any the least advantage.

1. A loss to the king of one thirtieth (if you coin your money 2d. per crown, one twentieth, if you coin your money 3d. per crown lighter) of all his standing

revenue.

2. A like loss of one twentieth, or one thirtieth, in all rents that are settled; for these have, during the term, the nature of rent-sec: but five per cent. loss in a man's income he thinks so little, it will not be perceived.

3. Trouble to merchants in their trade. These inconveniencies he is forced to allow. He might have said disorder to all people in their trade, though he says it will be but a little trouble to merchants, and without any real damage to trade. The author would have done well to have made out this, and a great many other assertions in that paper; but saying is much easier, if that may pass for proof.

Indeed