1811.] 
being interchangeable for a paper cur- 
tency which is not at wili convertible 
into gold, it is, in either case, most desi- 
table for the public that our circulating 
medium should again be conformed, as 
speedily as circumstances will permit, to 
its real and legal standard, vold bullion. 
If the gold coin of the country were at 
any time Lo become very much worn and 
lessened in weight, or if it should soifer 
a. debasement of its standard, it is evi- 
Went that there would be a proportion. | 
able rise of the market price of gold bul- 
lion above its mint price: for the mint 
price is the sum in coin, which is equi- 
valent in intrinsic value to a given quan. 
tity, an ounce for example, of the metal 
in bullion; and if the intrinsic value of 
that sum of coin be lessened, it is equi- 
valent to a less quantity of bullion than 
before. The same rise of the market 
price of gold above its mint price will 
take place if the local currency of this 
abe itne country, being no longer con- 
rtible into gold, should at any time be 
issued to excess. That excess cannot be 
exported to other countries, and, not 
being convertible into specie, it is not 
necessarily returned upon those who 
issued it; it remains in the channel of 
circulation, and is gradually absorbed by 
increasing the prices of all commodities, 
An increase in the quantity of the local 
currency of a particular country, will 
raise prices in that country exactly in the 
same inanner as an increase in the gene- 
ral supply of precious metals raises prices 
all over the world. By means of the in- 
crease of quantity, the value of a given 
portion of that circulating medium, in 
exchange for other commodities, is low- 
ered; in other words, the money prices 
of all other commodities are raised, and 
‘ that of builion with the rest. In this 
manner, an excess of the local currenty 
of a particular country will occasion a 
rise of the market price of gold above its 
mint price. It is no less evident, that, 
in the event of the prices of commodities 
being raised in one country by an aug- 
mentation of its circulating medium, 
while no similar augmentation in the cir- 
culating mediuin of a neighbouring coun- 
try has led to a similar rise of prices, the 
currencies of those two countries will no 
longer continue to bear the same relative 
value to each other as before. The in- 
trinsic value of a given portion of the 
one cufrency being lessened, while that 
of the other remains unaltered, the ex- 
change will be computed between those 
“a P 3 
on the High Price of Gold Bullion. 
493 
two countries to the disadvantage of tha 
former. 
Iv this manner, a general rise of all 
prices, a rise in the market price of gold, 
and a fall of the foreign exchanges, will 
be the effect of an excessive quantity of 
circulating medium in a-country which 
has adoptéd a currency, not exportable 
to other cotintries, or not convertible at 
will inte a coin which is exportable. 
It appears to your committee to have 
been long setded and understood as @ 
principle, phat the difference of exchange 
resulting from the state of trade and pay- 
ments between two countries is limited 
by the expense of conveying and insuring 
the precious metals from one country to 
the other: at least, that it cannot for any 
considerable length of time exceed that 
limit. The real difference of exchange, 
resulting from the state of trade and pay- 
ments, never can fall lower than the 
amount of such expence of carriage, in- 
cluding the insurance. ‘The truth of this 
position is so plain, and it is so uniformly 
agreed to by ail the practical authorities, 
both commercial and political, that your 
committee will assume it as indisputable, 
Your committee are disposed to think 
from the result of the whole evidence, 
contradictory as it is, that the circum- 
stances of the trade of this country, in 
the course of the last year, were such as 
to occasion a real fall of our exchanges 
with the continent to a Certain extent, 
and perhaps at one period almost as low 
as the limit fixed by the expense of re= 
mitting gold from hence to the respective 
markets, And your committee is ine 
clined to this opinion, both by what is 
stated regarding the excess of imports 
from the continent above the exports, 
though that is the part of the subject 
which is left most in doubt: and also by 
what is stated respecting the mode in 
which the payments in our trade have 
been latterly effected, an advance being 
paid upon the imports from the continent 
of Europe, and a long credit being given 
upon the exports to other parts of the 
world. ws 
Your committee, observing how en- 
tirely the present depression of our ex- 
change with Europe ts referred by many * 
persons to a great excess of our imports 
above our exports, have called for an 
account of the actual value of those for 
the last five years; and Mr. Irving, the’ 
Inspector-general of Customs, has accore 
dingly furnished the most accurate esti- 
mate of both that he has been eunned ta 
one 
