XVII.: Gold being made the standard by merchants, doth not make gold to be the national standard.

37. It hath been before observed, that merchants will reckon by that metal which is most common in large payments; all coins are with them, in effect, mere bullion; they have no regard to names, or local institutions; the real quantity of pure silver or pure gold, which they give and take in exchange for other commodities, is what they reckon by. And it is very manifest, by the course of exchange between us and all the world, that gold here is the standard of merchants; and this for them is most profitable, because gold here goes farthest in the purchase of our commodities; but with what loss to the nation, doth not fall within our present consideration.

But the transactions of merchants, do not make a standard for the rest of the world; and indeed, as hath been before observed, they have in effect no money, as they do not consider it in the same light that others do; coins with them being mere merchandise, as much as cloth, iron, or any other commodity. And therefore no considerations from the practices of merchants, or from the course of exchanges, have absolutely any thing to do in the present debate. In all countries, the business of settling the standard of money, is purely a national concern, which the rest of the world have nothing to with; and merchants, as such, are of no country. If you alter the standard, whatever effect it may have among yourselves, the course of exchange will set the matter even as to the rest of the world. If you lower the price of gold, the exchange in appearance will turn proportionably in your favour; if you debase your silver standard, it will go seemingly against you, to the full amount of this debasement: That is, in both cases, the exchange will really set the matter even; and therefore, as above observed, the consideration of exchanges hath nothing to do in the present argument.

The great inland commerce or business of this country, is chiefly carried on, scarce as it is, by silver. Labourers, handy-craftsmen, and manufacturers of all sorts, are paid their day wages in silver: What they receive is palpably, and manifestly their standard; and as labour is the main foundation of all riches, what goes to pay the price of it, will be the real standard of the nation, even though laws were enacted to the contrary. Laws, though they may, and perhaps too often do, perplex, yet they cannot eradicate settled ideas. Workmen of all sorts here, have fixed ideas annexed to shillings; they do not know, perhaps, the precise quantity of silver which they ought to contain; yet they know that there is an old established law, that hath settled this matter: Whilst this law is not abrogated or tampered with, they think themselves safe; they are content with their usual wages, without scrutinizing into the precise quantity of silver in the respective coins; whilst the same laws subsist, they expect these coins will fetch them as much necessaries as usual, and they look no farther. You may raise or lower the price of guineas, as the case may require, without affecting the price of labour; and therefore without affecting the price of any home commodity, in the first instance.

It hath been observed before, and the thing is sufficiently manifest, that the ideas of silver are annexed to pounds and shillings; and no law can transfer those ideas to gold, or to to any thing else. The farmer understands that he hath contracted to pay a certain number of pounds sterling for rent: This rent may be satisfied or discharged with gold, barley, horses, &c. these commodities respectively, being supposed at the time to be worth so much silver, or so many pounds and shillings, as they reckon for. And what reason is there for fixing the idea of standard, to any one of these commodities, preferably to the rest? The same reasoning may be extended to all other things; for all things may, and often do, answer the purpose of money; but yet this doth not make commodities to be money, nor money a commodity. The rent is equally discharged with gold or barley, according to the respective rates, which certain quantities of these commodities have at the time of payment. Nor does the more uniform and certain quality of the one, make any difference in the present argument; it preserves indeed the price of a given quantity, at a more equable rate; but it is subject nevertheless to have that price altered, as the great market of the world may govern; and for such an alteration, no one can have just cause to complain: But the case is very different with respect to silver.

Thus, I think, it is very manifest that silver, and only silver, is the standard of the country, of all contracts and establishments there, whatever may be the standard at the Royal Exchange: And, I think, that it would be impossible at present, to transfer the standard from silver to gold. Enact what laws you please; what measures and pays the price of labour, will be ultimately the real standard of the nation; and gold is at present too dear for the payment of day wages, and for the purchase of small necessaries. Enough hath been said before, to shew the iniquity of altering the standard of money; and, I think, that enough also hath been said, to shew the vanity and folly of such an attempt. But to instance again, only in the case of labour: If shillings be debased, suppose a fifth, or any other given part, either by changing their usual rate of 12 pence, or the 1/20 of a pound sterling, or by putting less silver in them; the workman will soon understand, that he must have the part lopped off made good to him, by increasing his nominal wages. This matter is so obvious, that he cannot be imposed upon, and the very attempt of doing it, might be attended with fatal consequences.