April — sept. 1859.] Ancient and Modern times. 107 



legal tender by weight only, the light pieces are withheld from 

 circulation by the Bank of England.* By this means the gold 

 currency is kept up to its proper standard of weight. The silver 

 coins bear only a conventional value higher than the intrinsic ; 

 their depreciation by wear therefore is of little consequence. 



This last remark leads me to mention again a species of Depre- 

 ciation by design. I allude to the overrating of the silver coinage 

 in England and America. This is a depreciation — the coins are 

 not worth the value they represent. But its object and its result 

 are public convenience. Its motive is very different from that of 

 the Depreciations by design to which I now proceed. 



Wherever there has been a coinage there have been fraudulent 

 depreciations by the governing power. " In every country of the 

 world, I believe," says Adam Smith, " the avarice and injustice 

 of princes and sovereign states, abusing the confidence of their 

 subjects, have, by degrees diminished the real quantity of metal 

 which had been originally contained in their coins." In another 

 place he quaintly writes, " Princes and sovereign states have fre- 

 quently fancied that they had a temporary interest to diminish the 

 quantity of pure metal contained in their coin, but they seldom 

 have fancied that they had any to augment it." In days when 

 the identity of interest of the governors and the governed was 

 little understood or recognised, interference with the coinage 

 seemed a very easy and effectual method of getting rid of an im- 

 portunate state creditor. It was the " most usual expedient for 

 disguising real bankruptcy under appearance of payment." 



In Sir Dudley North's Tract (1691), from which I have quoted 

 before on the subject of seignorage, it is laid down that " debas- 

 ing the coyn is defrauding one another, and to the public there is 

 no sort of advantage in it : for that admits no character or value 

 but intrinsic :" and that " the sinking by alloy or weight is all 

 one." These principles have, with few exceptions, prevailed in 

 practice ever since. Perhaps the barefaced depreciation by James 

 II., who in Ireland struck pieces of gun-metal of the same size as 



* The number of these so withheld is, I believe, very considerable 

 but appears to be kept a profound secret, at least I have seen it so 

 stated. 



