100 Coin and Currency in [No. 9, new series. 



Again, not only are the raw materials of the curreney liable to 

 fluctuation in relative value, but the two groups of coins them- 

 selves are subject to unsteadiness in their mutual relation. Coins 

 of smaller value pass through a greater number of hands than the 

 larger denominations — silver coins are more used than gold. The 

 natural depreciation of wear and tear, therefore, will affect the 

 former much more powerfully than the latter. For instance in 

 England in 1695, a guinea was legally worth 21 shillings ; in 

 reality it was equal in value to 30s. of the worn and dipt coin 

 then in circulation. Now suppose this state of things to have 

 existed anytime between 1774 and 1783, the legal tender of sil- 

 ver during that period being fixed at £25 — (and at that time the 

 silver coin was very much deteriorated by wear,* though not to 

 so great an extent as I have mentioned above) : during those nine 

 years a man who owed £25 would be able to pay it with silver 

 worth £17-10-0. Afterwards, from 1783 to 1798, there was no 

 restriction whatever on the amount to which silver was a legal ten- 

 der. I cite these facts merely as illustrations of the degree to 

 which the fluctuation in the relative values of the gold and silver 

 currencies may extend, and the consequent evils which would arise 

 from the option of discharging liabilities in either metal. The 

 debtor will of course pay his debts in the cheaper coin : the 

 other, estimated below its real value will be exported by the bul- 

 lion merchants to countries where it bears a. higher price ; and 

 the currency tends to return to its primitive state and to consist 

 of but one of the precious metals. 



I shall conclude this subject with a brief account of the failure 

 of the Double Standard System in England, America, and France. 

 In the case of the first and last countries my quotations are taken 

 from a Note by Mr. McCulloch. 



" According to the late Lord Liverpool, ( Treatise on Coins J, 

 gold coins passed current at certain rates fixed from time to time 

 by Royal Proclamation,! and have consequently been legal tender 



* In 1811, in the discussions in Parliament upon the Resumption of 

 Cash Payments, it was stated that during the period mentioned in the 

 text £25 would vary from 5 lbs. 5 oz. 15 dwt. of silver to 8 lbs. 15 oz., 

 according as it was paid in the worn sixpences or the new crowns. 



t I found accidentally in a newspaper the following variations in 

 the weight of the gold pound in England. In 1558, 174 grs. equal to 



