a62 The Operations of Gold and Silwr as jixtd Coin:, 



in a confulcrable degree upqiv tfi£ aA-ual demand. As thefe articles are not employed 

 merely in the fabricatlgii of jCQinj, the d^^niand will vary in each according to circum- 

 llaiices, whicluadmit; of jio permanent ratio, of exchange between them. If the State were 

 to coin certain pieces of known weight and finenefs out of each of thefe metals, and de- 

 termine that a certain number of the filver pieces, for example, (hould in all cafes be 

 equivalent to one piece of the gold, it would naturally follow, fuppofing the individual to 

 pay nothing for the coinage, that a debt might be difcharged with mod facility to the 

 debtor, and confjquently lof§ to the creditor, in the cheapefl of thefe two metals, whenever 

 by the fluctuation of the market either of them (hould come to reprefent a larger portion 

 of the other than the edi61: of the government had determined. This confequence of fix- 

 ing the relative value of coins would fhow itfelf in a variety of wjys, which need not be 

 enumerated ; becaufe it is certain that the dearer metal would occupy the greater part of 

 the circulation, while the cheaper pieces would either be melted down or diminiflied, if 

 their rated value were too high, or they would be fabricated by individuals if it were too 

 low, in defiance of every public regulation which might be adopted. If we therefore ad- 

 mit, from confideratlons of this nature, that no government does in reality poffefs the means 

 of fixing a ratio between two articles of commerce, intended to be applied as the tickets 

 of transfer or mediums of exchange, we fliall be naturally led to the adoption of one of the 

 metals only, as the reprefentative fign, while the two others are applied merely as inftru- 

 ments of accommodation for the convenient fub-dlvifions of value. 



With regard to the queftion of preference in thefe three metals, experience has fliewn 

 that fociety is difpofed to afiume the dearefl: ; namely, gold. With a fiiigle ftandard of 

 value, the flu£luations of the market price of the metal, when compared with other com- 

 modities, will be nearly imperceptible, becaufe they confound themfelves with the rife 

 and fall in the prices of all other articles to which the ftandard is thus applied. If a 

 cheaper metal were to be adopted by the State, and gold were left to circulate at the elec- 

 tion of individuals, the changes of price in this metal of high value would operate fo as 

 to produce an uncertainty in the amount of large fums, and greatly dUturb the general 

 tranfaftions of commerce. Merchants would therefore confider the gold coinage as mere 

 bullion, and the community would in a great meafure be deprived of its ufe as a coin ; as 

 is aftually the cafe in Holland and other countries where Yilver is the legal medium*. Hence 

 it appears moft eligible, that gold in pieces of determinate weight and finenefs fliould con- 

 ftitute the efFe£live coin of the State, or legal tender of payment ; that filver and copper 

 (hould be formed into money for the purpofe of reprefenting fraftions of the fmallefl gold 

 coin } and that the creditor or feller fhould have the option to refufe all payments in thefe 

 laft metals for any fum exceeding the fmalleft unity of the gold coin. 



By this diftribution, though the coins of filver and copper would in flri£tnefs be fubjedl 

 to fludluations arifing from the flate of the market with regard to thofe metals, yet thcdif- 



• A ftill more dcfeftive fcheme was propofed in the Report presented by Prieur, de la C4te d'Or, frdm a Com- 

 mittee of the Council of Five Hundred, of which a very full abftraft is given in thcMoniteursof 6and 7Floreal 

 in the year VI. Nos. ii6, 217. It is, that filver coin fliould be unchangeable in weight and denomination of 

 Talue ; but that the price of gold (alfo coineti) fliould be fettled every fix months by a declaration firom the Na- 

 tional Treafury, deduced from the medium price of that metal during the preceding half-year. It was rejeft- 

 ed by the Council of Ancients, 



fcrcnce 



