BULLION usually means uncoined gold and silver, in bars or other masses; but in discussions on the currency, the term is frequently employed to signify the precious metals coined and uneoincd. The origin of the word B. in its present sense, as well as that of the French billon (q. v.), and the corresponding Spanish vellon, seems to'be as follows: B. originally meant the mint, where the alloy for the coinage was prepared, and the coin stamped (either from the Lat. bulk, a round boss or stud, or stamp; or from the verb bullare, to boil or bubble); and hence it came in England to signify the standard metal of which the coins are made. In France, where the kings debased the currency much more than ever took place in England, billon, the mint, came to signify the base mixture issued therefrom.
It is a question not yet satisfactorily settled, how far any great increase in the sup ply of B. has that effect in lessening the value of money, and •consequently raising prices, which has always been very naturally attributed to it. It may indeed be main tained with some plausibility, that if B. were capable of being produced to such an extent beyond the actual demand for it as to glut the market, it would cease to be that general standard of money value which it has become, just because it is of all others the article which is steadiest in requiring a certain outlay of labor to produce it. Rises in prices have accompanied large supplies of gold, but they have also accompanied large supplies of other commodities indicative of a great increase in riches. It is certain that great increases in the supply of B. do not, as in the case of other goods, glut the mar ket. For some years past, the supply of gold, owing to the new fields opened in America and Australia, has been quadrupled, with certainly no more influence on prices than what a general increase in prosperity might cause. There is, it will be observed, this great difference between gold and other commodities, that besides what may be within the crust of the earth, there is a great mass which has been accumulating for thousands of years in the possession of mankind, which comes forth as it is wanted.
A few millions of tons of iron, or bales of cotton, beyond the usual annual average, would perhaps add a hundred per cent to the available quantity for consumption; but a few millions of pounds' worth of gold, having to be counted with all the gold in existence in the world, makes a scarcely perceptible addition to the stock.
The term B. is in this country associated with the memorable BULLION REPORT of 1810. In the year 1797, by what was called the restriction act (see BANK), the bank of England was restrained from paying its notes in gold. There thus came to be two sep arate and independent currencies in the country—one of B., the other of paper. They came to differ in value from each other so much that in the year 1813, gold, of which the mint price was £3 17s. 10d. per ounce, was actually worth, in bank paper, £5 10s., or, in other words, the one-pound bank-note was worth 148. 2(1. There were various opinions on the cause of this difference. Some people simply said that gold was dear, taking paper as the standard of value; others said it was owing to our exports not bal ancing our imports; others, to too great facilities in discounting, by which money was advanced on bad security; and in general, it was held that there could he no overissue of paper-money, if it was backed by good security, and employed only for genuine transactions, and not in fictitious credits. In the meantime, the select committee on the high price of gold 13., had been wishing to get, not through theories or speculations, but through actual facts, at the truth. The work of the committee was chiefly con ducted by Mr. Horner, aided by sir Robert Peel, then a young man; and both of them entered on the task without any prepossession, and the desire to find the truth. They established the conclusion, among other important truths, that paper-money is always liable to be overissued, and consequently depreciated, unless it be at all times imme diately convertible into gold, and the monetary policy of the empire was subsequently established on this principle. A full analysis of the B. report will be found in Macleod's Dictionary of Political Economy.