essay3 [16]
of 1726, few people took their old coin to the Mint, and the profit of the Mint tax which was in view had to be abandoned. It is not within my subject to explain the reasons of Ministers for lowering the coinage suddenly nor the reasons which deceived them in their project of the augmentation of 1726. I have mentioned the increases and decreases in France only because their results seem sometimes to clash with the principles I have established that abundance or scarcity of money in a State raises or lowers all prices proportionably. After explaining the effects of lowering and raising the coinage, as practised in France, I maintain that they neither destroy nor weaken my principles, for if I am told that what cost 20 livres or 5 ounces of silver before the lowering referred to does not even cost 4 ounces or 20 livres of the new money after the augmentation, I will assent to this without departing from my principles, because there is less money in circulation than there was before the diminutions, as I have explained. The difficulties of exchange in the times and operations of which we speak cause variations in the prices of things and in that of the interest of money which cannot be taken as a rule in the ordinary principles of circulation and dealing. The change in the nominal value of money has at all times been the effect of some disaster or scarcity in the State, or of the ambition of some Prince or individual. In the year A.U.C. 157 Solon increased the nominal value of the drachma of Athens after a sedition and abolition of debt. Between A.U.C. 490 and 512 the Roman Republic several times increased the nominal value of its copper coins, so that their as came to be worth six. The pretext was to provide for the needs of the State and to pay the debts incurred in the first Punic War. This did not fail to cause great confusion. In 663 Livius Drusus, Tribune of the people, increased the nominal value of amount, and this gave occasion to introduce confusion into exchange. In A.U.C. 712 Antony in his Triumvirate increased the nominal of silver by 5 per cent, mixing iron with the silver, to meet the needs of the Triumvirate. Many Emperors subsequently debased or increased coinage. The Kings of France at different times have done likewise. This is why the livre tournois, which was a pound weight of silver has sunk to so little value. These proceedings have never failed to cause disorder in States. It matters little or nothing what is the nominal value of coins provided it be permanent. The pistole of Spain is worth 9 livres or florins in Holland, about 18 livres in France, 37 livres 10 sols at Venice, 50 livres at Parma. In the same proportion values are exchanged between these different countries. The price of everything increases gradually when the nominal valne of coins increases, and the actual quantity in weight and fineness of the coins, taking into account the rapidity of circulation, is the base and regulator of values. A State neither gains nor loses by the raising or lowering of these coins so long as it keeps the same quantity of them, though individuals may gain or lose by the variation according to their engagements. All people are full of false prejudice and false ideas as to the nominal value of their coinage. We have shown in the Chapter on Exchanges that the invariable rule of them is the price and fineness of the current coins of different countries, marc for marc and ounce for ounce. If a raising or lowering of the nominal value changes this rule for a time in France it is only during a crisis and difficulty in trade. A return is always made little by little to intrinsic value, to which prices are necessarily brought both in the market and in the foreign exchanges.
Chapter VI
Of Banks and their Credit
If a hundred economical gentlemen or proprietors of land, who put by every year money from their savings to buy land on occasion, deposit each one 10,000 ounces of silver with a goldsmith or banker in London, to avoid the trouble of keeping this money in their houses and the thefts
Chapter VI
Of Banks and their Credit
If a hundred economical gentlemen or proprietors of land, who put by every year money from their savings to buy land on occasion, deposit each one 10,000 ounces of silver with a goldsmith or banker in London, to avoid the trouble of keeping this money in their houses and the thefts