Former transactions have no relation to the present value of money.

40. It hath been before shewed, that money is a standard measure by its quantity only, without regarding in the least the fluctuating value of its material with respect to other things. This restriction to quantity only, is essential to the nature and very being of money, as without which it would lose its place as such, and dwindle into mere commodity: How could that be called money, the value or price of which was fluctuating; and at all markets, and in all contracts to be bargained for, like other commodities? But should we admit money to be a commodity; those who would infer from thence, that the standard of money should be debased, are very unlucky in the choice of their argument, for it proves directly against them; as it is notorious that in Europe, both gold and silver have been gradually, and, I might say, continually sinking in their value for a long time past, from the continual increase of their quantity: And upon this principle, the standard of money should be inlarged, and not curtailed; and all creditors, both public and private, would have an undoubted right to demand back a greater quantity, than they had lent. But how could the several claims be adjusted, according to the different times of the respective loans? What infinite contests, distractions, and confusions, must needs follow any departure from the true nature and use of money?

It hath been also abundantly proved, both in this and the preceding part of this essay, that silver only and not gold, is, and time immemorial hath been, the measure of all our contracts: And therefore the inference in the preceding, viz. “As we have great plenty of gold coins, should we lower the price of gold we should undervalue our own treasure, and pay our foreign creditors more than we received from them;” this inference, I say, is fallacious, and nothing to the purpose. But before I proceed any farther, I cannot help taking notice of the artifice used, in making the application to our foreign creditors only: How could this distinction be supported in practice; and if it could, where would be the justice of it, and what would become of the public faith? Was not that faith given, or which is the same thing, understood to be given, to all sorts of creditors indiscriminately, that they should be paid again by the same scale that the loans were measured with? And was this scale anything else than sterling money, or our present silver standard?

That assertion, that lowering the price of gold would be undervaluing our own treasure, hath been before sufficiently answered: And almost every part of this whole chapter, is a full answer to the application above made to our public creditors; and indeed, creditors of all sorts would be the greatest of sufferers by a debasement of money, as their losses would be irretrievable and past all redemption. But to speak more particularly to the point before us: Admitting, what is hardly to be admitted, that all our loans have been made in gold coins; and that these coins at the several times of borrowing, were, as at present they manifestly are, over-rated: This over-rating of gold was undoubtedly prejudicial to us; and this prejudice we shall continue to sustain, till the cause is removed. But this hath nothing to do in the present debate: The scale by which we borrowed, was silver; and it must have been understood, that we engaged to pay by the same scale, whenever the day of payment came. The due proportion of value of gold to silver, or the just rates which gold coins ought then to have, was not considered by either side; nothing was regarded but the current rates, at which on the one side they were given, and on the other taken, in full consideration of certain specific quantities of silver; which silver, was on both sides understood to be, and for ever to continue to be, the true and only measure of the contracts.

Again, our loans were made for present use; and the money, in the same specie, and at the same rates, as we received it; was, soon after the borrowing, dispersed into other channels, for such things, services, and considerations, as were then deemed an equivalent. And by these dispersions, the public escap’d the immediate loss from receiving gold at too high a rate. But in truth, our over-rating gold, is a consideration to be referred wholly elsewhere; and from which, nothing can be fairly drawn that may affect the present argument.

Every true patriot wishes to see our public debt reduced; and grievous as the burden at present is, there is great room to hope, that the time is not far off, when our expences may be lessened, and our debts gradually discharged, in a manner that shall be consistent with the faith, honour and renown of the nation; and of this we need not despair, if the wise, just, and solid maxims of our present administrators, will be imitated and followed by their successors. But whatever may be the fate of future times, and whatever the exigencies of affairs may require; it is to be wished that that aukward, clandestine, and most direful method of cancelling debts, by debasing the standard of money, will be the last that shall be thought of; as that method would make a havock alike of all property, and create universal panics and distrusts, not easily to be afterwards repaired.