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.There was an evidentprofit, therefore, in melting down new coined money, and it wasdone so instantaneously, that no precaution of government couldprevent it.The operations of the mint were, upon this account, somewhatlike the web of Penelope; the work that was done in the day wasundone in the night.The mint was employed, not so much inmaking daily additions to the coin, as in replacing the very bestpart of it which was daily melted down.Were the private people, who carry their gold and silver to themint, to pay themselves for the coinage, it would add to the valueof those metals in the same manner as the fashion does to that ofplate.Coined gold and silver would be more valuable thanuncoined.The seignorage, if it was not exorbitant, would add tothe bullion the whole value of the duty; because, the governmenthaving everywhere the exclusive privilege of coining, no coin cancome to market cheaper than they think proper to afford it.If theduty was exorbitant indeed, that is, if it was very much above thereal value of the labour and expense requisite for coinage, falsecoiners, both at home and abroad, might be encouraged, by thegreat difference between the value of bullion and that of coin, toAdam Smith ElecBook ClassicsThe Wealth of Nations: Book 4 725pour in so great a quantity of counterfeit money as might reducethe value of the government money.In France, however, thoughthe seignorage is eight per cent, no sensible inconveniency of thiskind is found to arise from it.The dangers to which a false coineris everywhere exposed, if he lives in the country of which hecounterfeits the coin, and to which his agents or correspondentsare exposed if he lives in a foreign country, are by far too great tobe incurred for the sake of a profit of six or seven per cent.The seignorage in France raises the value of the coin higherthan in proportion to the quantity of pure gold which it contains.Thus by the edict of January 1726, the1 mint price of fine gold oftwenty-four carats was fixed at seven hundred and forty livresnine sous and one denier one-eleventh, the mark of eight Parisounces.The gold coin of France, making an allowance for the remedy ofthe mint, contains twenty-one carats and three-fourths of finegold, and two carats one fourth of alloy.The mark of standardgold, therefore, is worth no more than about six hundred andseventy-one livres ten deniers.But in France this mark ofstandard gold is coined into thirty Louis d ors of twenty-four livreseach, or into seven hundred and twenty livres.The coinage,therefore, increases the value of a mark of standard gold bullion,by the difference between six hundred and seventy-one livres tendeniers, and seven hundred and twenty livres; or by forty-eightlivres nineteen sous and two deniers.1See Dictionnaire des Monnoies, vol.ii, article seigneurage, p.489, par M.Abot de Bazinghen, Conseiller-Comissaire en la Cour des Monnoies àParis.Adam Smith ElecBook ClassicsThe Wealth of Nations: Book 4 726A seignorage will, in many cases, take away altogether, and will,in all cases, diminish the profit of melting down the new coin.Thisprofit always arises from the difference between the quantity ofbullion which the common currency ought to contain, and thatwhich it actually does contain.If this difference is less than theseignorage, there will be loss instead of profit.If it is equal to theseignorage, there will neither be profit nor loss.If it is greater thanthe seignorage, there will indeed be some profit, but less than ifthere was no seignorage.If, before the late reformation of the goldcoin, for example, there had been a seignorage of five per centupon the coinage, there would have been a loss of three per centupon the melting down of the gold coin.If the seignorage had beentwo per cent there would have been neither profit nor loss.If theseignorage had been one per cent there would have been a profit,but of one per cent only instead of two per cent.Wherever moneyis received by tale, therefore, and not by weight, a seignorage isthe most effectual preventative of the melting down of the coin,and, for the same reason, of its exportation.It is the best andheaviest pieces that are commonly either melted down orexported; because it is upon such that the largest profits are made.The law for encouragement of the coinage, by rendering it duty-free, was first enacted during the reign of Charles II for a limitedtime; and afterwards continued, by different prolongations, till1769, when it was rendered perpetual.The Bank of England, inorder to replenish their coffers with money, are frequently obligedto carry bullion to the mint; and it was more for their interest, theyprobably imagined, that the coinage should be at the expense ofthe government than at their own.It was probably out ofcomplaisance to this great company that the government agreed toAdam Smith ElecBook ClassicsThe Wealth of Nations: Book 4 727render this law perpetual.Should the custom of weighing gold,however, come to be disused, as it is very likely to be on account ofits inconveniency; should the gold coin of England come to bereceived by tale, as it was before the late recoinage, this greatcompany may, perhaps, find that they have upon this, as uponsome other occasions, mistaken their own interest not a little [ Pobierz caÅ‚ość w formacie PDF ]