XVIII.: Lowering the price of gold would be of no loss to the nation; and the lowering it directly, by lessening its rat

38. It is, in effect, agreed on all sides, that the price of gold should be reduced; but for debasing the standard, or as they call it, raising the value of silver, it is said: “That as our stock is chiefly in gold, should we depreciate or lessen the rates of guineas, it would be undervaluing our own treasure, and bringing a great loss both upon the nation and upon individuals; but, as we have a scarcity of silver coins, the debasing of these would be so little felt, as not to be worth regarding.”

We have already met with many pretences for debasing the standard; which, upon examination, appeared sufficiently weak and frivolous: But amongst them all, I think, there is not one quite so vague and ridiculous, as this before us. Let us suppose that the reduction, wanted to be made in the rate of a guinea, is one shilling; for it is nothing to the argument, what the precise quantity really is; and that will come to be considered in another place. You say, that if the rate of a guinea be reduced one shilling, there would be a loss of the one and twentieth part, upon all the guineas in the nation; but that there would be no loss at all upon guineas, if they were ordered to pass for twenty one shillings, having in them no more silver, than there is at present in twenty shillings. Strange, very strange indeed, that there should be such magic in the word shilling, and in the number twenty-one, as to make the same thing, only calling it by different names, have such different effects! It is scarce necessary to take any farther notice of such a mere jingle of words; but out of tenderness to these young logicians, but more out of regard to those who may be deceived by them, if any such there can be: I shall endeavour to shew, that our scheme is more favourable to them, than their own.

1. It is self-evident, that the nation would not lose one farthing upon all the gold it exported, by a reduction of the mint price of gold. For this reduction, would not in the least debase the intrinsic quality of the gold; and every guinea that went into foreign parts, would fetch there as much afterwards, as it doth at present; unless, perhaps, there is now a trade abroad for purchasing guineas, and re-exporting them to us again; and if there be such a trade, it is much to our disadvantage.

2. Let us suppose, that the reduction is made, by calling twenty of our present shillings, by the name of twenty-one shillings; or, which is the same thing, by a new coinage wherein twenty-one pieces, called shillings, are cut out of the same quantity of silver, as before used to be put into twenty shillings. Here, it is self-evident, that every one will lose a shilling upon a guinea; and that his loss will be in the same proportion, upon all the silver coins which he hath to receive. For, it hath been shewed, that the prices of all things at home, are regulated by the silver standard; and therefore they would soon raise against us, in proportion as that standard had been debased; unless you think, that sounding the words twenty-one in their ears, would lull men asleep, and deprive them of their understanding. By this scheme then, the one and twentieth part of all their cash, gold as well as silver, would be taken away from, and irrecoverably lost to, every body; and this loss would fall, not only upon the present stock in hand, but also upon all that they had to receive for the future, in consideration of any contracts already made.

3. Let us suppose, that the rate of a guinea is, without using any other indirect means, directly reduced to twenty shillings. Here then, whilst this property in general is left unviolated, both now and in future; the only loss any one can sustain, is upon his present stock in hand of guineas, and this loss cannot exceed one shilling upon each. But, it is not improbable, that by the falling of commodities, there might be some abatement of this loss: For, by the concessions of those who abett the contrary measure, they making gold to be the standard of merchants, foreign exchanges will alter in our favour, proportionably to our reduction upon gold; and with the exchanges, it is likely, the prices of all foreign commodities, would in some degree likewise alter, which would also cause an abatement in the prices of our own.

It is difficult to state to any exactness, what influence foreign exchanges or the dealings of merchants, have upon the prices of goods in general; that is, how far our high valuation of gold, and so the mercantile trade, may clash with the legal standard, in measuring the values of contracts and of commodities: I admit, that this may have some effect; but, I think, for the reasons which have been already given, that this effect is very inconsiderable.

But to bring this whole debate, as far as it any way relates to our present subject, to a short issue: If it be admitted that contracts, and the prices of all things, are governed wholly by the established silver standard; then, it is manifest, that if you alter that standard, the prices of all things will raise, at least, in that proportion: On the other hand, if you insist that gold is the standard; then, I say, that if you lower its price, and that will be equally done by either of the preceding methods, the prices of all things will fall proportionably. But whether gold hath any share jointly with silver, in settling and measuring the prices of things; or, whether gold takes all upon itself; it is as clear as the day, that, according to which method is taken in adjusting the present disproportion between the legal rates of gold and silver, there will follow a difference, at least, in the prices of things in general, to the full amount of that disproportion: And, it is as clear, that our method of reducing them, would be by much the most favourable to the present possessors of guineas, as well as a security to them of their full property for the future; which, by the other method, would be invaded and taken from them, to the whole amount of the reduction or debasement of the standard. But is there need of balancing, so exactly, the immediate profits and loss, between these two different methods, of reducing the price of gold? The one, all the world knows, is fair, equitable, and perfectly agreeable to public faith; whilst the other, would be reproachful, unjust, and a thousand ways injurious, both to the state and to individuals. The case of men as they are mere debtors and creditors, hath been already considered; and so far as they are equally so, it hath nothing to do with the present argument; and we shall have again occasion to speak more to this point a little farther on. In its proper place, the cases of bankers, and public receivers, shall be duly considered.