COIN. Among the impediments to commerce, the greatest, undoubtedly, is the charge of conveyance from place to place. This is the great obstacle, which limits the exchange of commodities from one extremity of the world to the other. Whenever the charges of carriage arise to such an amount as to equal the effec• tual return in any remote market, the motive for conveying merchandize to that place ceases. If goods were always ex changed for goods, it is clear that the conveyance, under the uncertainty of dis. posal, would take place to a very small distance indeed ; and the labour required to discover the persons willing to ex. change would greatly enhance the charge It would require a volume to enumerate and describe the expedients, moral as wel as mechanical, by which these difficultiee are in part subdued, and still more to de duce their origin and ppneral effects. One of the chief of these expedients consists it the use of some article of merchandize a! medium of exchange, which shall be acceptable to every man, and will there% fore be received and held by the seller of any commodity, until he shall meet with another individual, who he knows will again take it for the article he wants.
In the island cdttIadagascar, it is said, that the exchangeable value of goods is reckoned in hatchets, bullocks, and slaves; these commodities being universally ven dible, and for that reason every where re ceived. Smith affirms, that nails answer the same purpose in some parts of Great Britain. These, and other instances, may serve to shew how a preferable medium of exchange becomes adopted ; and it will without difficulty be seen, that the scarcest and least destructible metals must have at length become the univer sal substitutes : for their value does not depend on their figure; they may be sub divided and joined again without loss ; they receive no injury by keeping ; and the labour of conveying them from place to place forms a less part of their value than of any other article.
The first monies were mere quantities of metals ascertained by weight, as the names of most species still indicate. The inter ference of government was found neces sary to assure the weight, and more par ticularly the fineness of determinate por tions of metal ; and this has given rise to an opinion, that a part of the value of coin must depend on the edict of the state which issues it. Whether statesmen them
selves have in reality thought this to be the case, is little to the purpose ; but it is certain that they have, from time to time, yielded to the temptation of diminishing the quantity of precious metals issued un der a given denomination, either by openly deducting from the weight, or secretly debasing the coin. Transactions of this kind must have operated to the loss of all the creditors in the state : but they have never deceived the sellers, who have al ways regulated their prices by their knowledge of the real quantities of the metal, and not by the denomination, or the supposed weight or fineness, it might denote. The imaginary coin, or money of account, to be found in the mercan tile books of almost every commercial na tion, must have arisen partly from this cause.
This diminution has taken place throughout Europe. With us the pound. of money, which about the year 1087 con tained a pound weight of silver, has continued at less than one third (or .14) of that quantity, ever since the reign of Elizabeth . Our neighbours, however,have universally exceeded us in this respect. Thus the pound Flemish is less than eleven shillings, the French livre is ten pence, and the Italian lire is less than 21d.
The Chinese still use fine silver, which they actually cut and weigh at every sin gle payment. They are said to have for merly possessed silver coin; but whether they were urged to their present prac tice by the uncertain variation in its value caused by their rulers, or by the difficul ty of otherwise resisting the artifices of coiners, we know not The metals used for coinage are, gold, silver, and copper. According to the exchangeable value of gold, half a grain of this metal would purchase as much bread as a man could eat at one meal. This small piece of gold, if as thin as pa per, would not measure the tenth part of an inch in breadth, and would therefore be perfectly inconvenient for use. It has, in fact, been found that the gold coin of the weight of 32 grains (or the quarter guinea) was too small to be conveniently used. The same observations will apply to the smaller subdivisions of the shilling of silver ; whence, upon the whole, it v.. pears that coins of all the three metals are required, to facilitate our commerce of buying and selling.