other nations the balance of trade is either against us； or not
much in our favour。 But we should remember that the more gold we
import from one country； the less we must necessarily import from
all others。 The effectual demand for gold； like that for every
other commodity； is in every country limited to a certain
quantity。 If nine…tenths of this quantity are imported from one
country； there remains a tenth only to be imported from all
others。 The more gold besides that is annually imported from some
particular countries； over and above what is requisite for plate
and for coin； the more must necessarily be exported to some
others； and the more that most insignificant object of modern
policy； the balance of trade； appears to be in our favour with
some particular countries； the more it must necessarily appear to
be against us with many others。
It was upon this silly notion； however； that England could
not subsist without the Portugal trade； that； towards the end of
the late war； France and Spain； without pretending either offence
or provocation； required the King of Portugal to exclude all
British ships from his ports； and for the security of this
exclusion； to receive into them French or Spanish garrisons。 Had
the king of Portugal submitted to those ignominious terms which
his brother…in…law the king of Spain proposed to him； Britain
would have been freed from a much greater inconveniency than the
loss of the Portugal trade； the burden of supporting a very weak
ally； so unprovided of everything for his own defence that the
whole power of England； had it been directed to that single
purpose； could scarce perhaps have defended him for another
campaign。 The loss of the Portugal trade would； no doubt； have
occasioned a considerable embarrassment to the merchants at that
time engaged in it； who might not； perhaps； have found out； for a
year or two； any other equally advantageous method of employing
their capitals； and in this would probably have consisted all the
inconveniency which England could have suffered from this notable
piece of commercial policy。
The great annual importation of gold and silver is neither
for the purpose of plate nor of coin； but of foreign trade。 A
round…about foreign trade of consumption can be carried on more
advantageously by means of these metals than of almost any other
goods。 As they are the universal instruments of commerce； they
are more readily received in return for all commodities than any
other goods； and on account of their small bulk and great value；
it costs less to transport them backward and forward from one
place to another than almost any other sort of merchandise； and
they lose less of their value by being so transported。 Of all the
commodities； therefore； which are bought in one foreign country；
for no other purpose but to be sold or exchanged again for some
other goods in another； there are none so convenient as gold and
silver。 In facilitating all the different round…about foreign
trades of consumption which are carried on in Great Britain
consists the principal advantage of the Portugal trade； and
though it is not a capital advantage； it is no doubt a
considerable one。
That any annual addition which； it can reasonably be
supposed； is made either to the plate or to the coin of the
kingdom； could require but a very small annual importation of
gold and silver； seems evident enough； and though we had no
direct trade with Portugal； this small quantity could always；
somewhere or another； be very easily got。
Though the goldsmith's trade be very considerable in Great
Britain； the far。 greater part of the new plate which they
annually sell is made from other old plate melted down； so that
the addition annually made to the whole plate of the kingdom
cannot be very great； and could require but a very small annual
importation。
It is the same case with the coin。 Nobody imagines； I
believe； that even the greater part of the annual coinage；
amounting； for ten years together； before the late reformation of
the gold coin； to upwards of eight hundred thousand pounds a year
in gold； was an annual addition to the money before current in
the kingdom。 In a country where the expense of the coinage is
defrayed by the government； the value of the coin； even when it
contains its full standard weight of gold and silver； can never
be much greater than that of an equal quantity of those metals
uncoined； because it requires only the trouble of going to the
mint； and the delay perhaps of a few weeks； to procure for any
quantity of uncoined gold and silver an equal quantity of those
metals in coin。 But； in every country； the greater part of the
current coin is almost always more or less worn； or otherwise
degenerated from its standard。 In Great Britain it was； before
the late reformation； a good deal so； the gold being more than
two per cent and the silver more than eight per cent below its
standard weight。 But if forty…four guineas and a half； containing
their full standard weight； a pound weight of gold； could
purchase very little more than a pound weight could of uncoined
gold； forty…four guineas and a half wanting a part of their
weight could not purchase a pound weight； and something was to be
added in order to make up the deficiency。 The current price of
gold bullion at market； therefore； instead of being the same with
the mint price； or L46 14s。 6d。； was then about L47 14s。 and
sometimes about L48。 When the greater part of the coin； however；
was in this degenerate condition； forty…four guineas and a half；
fresh from the mint； would purchase no more goods in the market
than any other ordinary guineas； because when they came into the
coffers of the merchant； being confounded with other money； they
could not afterwards be distinguished without more trouble than
the difference was worth。 Like other guineas they were worth no
more than L46 14s。 6d。 If thrown into the melting pot； however；
they produced； without any sensible loss； a pound weight of
standard gold； which could be sold at any time for between L47
14s。 and L48 either of gold or silver； as fit for all the
purposes of coin as that which had been melted down。 There was an
evident profit； therefore； in melting down new coined money； and
it was done so instantaneously； that no precaution of government
could prevent it。 The operations of the mint were； upon this
account； somewhat like the web of Penelope； the work that was
done in the day was undone in the night。 The mint was employed；
not so much in making daily additions to the coin； as in
replacing the very best part of it which was daily melted down。
Were the private people； who carry their gold and silver to
the mint； to pay themselves for the coinage； it would add to the
value of those metals in the same manner as the fashion does to
that of plate。 Coined gold and silver would be more valuable than
uncoined。 The seignorage； if it was not exorbitant； would add to
the bullion the whole value of the duty； because； the government
having everywhere the exclusive privilege of coining； no coin can
come to market cheaper than they think proper to afford it。 If
the duty was exorbitant indeed； that is； if it was very much
above the real value of the labour and expense requisite for
coinage； false coiners； both at home and abroad； might be
encouraged； by the great difference between the value of bullion
and that of coin； to pour in so great a quantity of counterfeit
money as might reduce the value of the government money。 In
France； however； though the seignorage is eight per cent； no
sensible inconveniency of this kind is found to arise from it。
The dangers to which a false coiner is everywhere exposed； if he
lives in the country of which he counterfeits the coin； and to
which his agents or correspondents are exposed if he lives in a
foreign country； are by far too great to be incurred for the sake
of a profit of six or seven per cent。
The seignorage in France raises the value of the coin higher
than in proportion to the quantity of pure gold which it
contains。 Thus by the edict of January 1726； the mint price of
fine gold of twenty…four carats was fixed at seven hundred and
forty livres nine sous and one denier one…eleventh； the mark of
eight Paris ounces。 The gold coin of France； making an allowance
for the remedy of the mint； contains twenty…one carats and
three…fourths of fine gold； and two carats one fourth of alloy。
The mark of standard gold； therefore； is worth no more than about
six hundred and seventy…one livres ten deniers。 But in France
this mark of standard gold is coined into thirty Louis d'ors of
twenty…four livres each； 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 ten deniers； and seven hundred and twenty
livres； or by forty…eight livres nineteen sous and two deniers。
A seignorage will； in many cases； take away altogether； and
will； in all cases； diminish the profit of melting down the new
coin。 This profit always arises from the difference between the
quantity of bullion which the common currency ought to contain；
and that which it actually does contain。 If this difference is
less than the seignorage； there will be loss instead of profit。
If it is equal to the seignorage； there will neither be profit
nor loss。 If it is greater than the seignorage； there will indeed
be some profit； but less than if there was no seignorage。 If；
before the late reformation of the gold coin； for example； there
had been a seignorage of five per cent upon the coinage； there
would have been a loss of three per cent upon the melting down of
the gold coin。 If the seignorage had been two per cent there
would have been neither profit nor loss。 If the seignorage had
been one per cent there would have been a profit； but of one per
cent only instead of two per cent。 Wherever money is received by
tale； therefore； and not by weight； a seignorage is the m