As M. Chevalier and the Reviewer admit that in speaking of relative values, it is difficult to decide which rises and which falls, should we not select that article which suffers the least physical' change, and is least dependent on the seasons ? Gold is peculiarly such an article. Abstractedly, gold may be less valuable than irdn, but from its beauty, and the difficulty and labour of procuring it, it has been accepted by all mankind as the representative of value. From its indestructibility, the amount remains unwanted, which is the case with few other articles ; from its portability and intrinsic value it can be secured with lass danger, and used with greater convenience, than most other materials; its value is therefore more likely to be fixed than anything else.
Both gold and silver are alike subject to the general law of demand and supply, and are therefore imperfect standards of value. If one be the standard independently of the other, it is liable to change in itself, and also in its relation to other commodities : if both be adopted as standards at the same time, they will not only each vary in themselves, and in relation to other commodities, but they will vary also in regard to each other. And thus another element of uncertainty is introduced into the coinage, which becomes still more imperfect as a standard.
But it is not customary for the state to allow coins to fluctuate in their legal value according to the circumstances which determine the market prices of gold and silver. Coinage does not merely authenti cate the weight and fineness of a piece of metal, leaving it to find its own level in exchange for other commodities ; but it attaches to it a definite value, by fixing the standard price of the metal as well as the weight and fineness of the coin. The object of this regulation is to maintain a greater equality in the standard ; and as regards small fluctuations in the value of the precious metals, it will generally have that effect, at any rate for the country for which they were coined. But if any considerable disproportion should arise between the standard price of bullion and the market price, no such regulation can prevent a practical change in the standard. If the market price should become considerably higher than the standard price, the coins would be melted down for the sake of the profit arising from the difference. If it should become considerably lower for any length of time, the value of the coins, though nominally unchanged, would in fact be depre ciated; .for they would exchange for a less quantity of other com modities than they exchanged for before. And thus a currency com posed exclusively of metals cannot be made an accurate standard of value by any expedients of law.
We may here remark, however, that a seignorage, or charge by government to cover the expenses of coinage, acts as a protection, within certain limits, against the melting of coins, because unless their value be depreciated by over-issue, the whole charge will be a lded to their value as coins, and will be lost when they are melted. For this amongst other reasons a seignorage should always be charged by the state.
There is yet another imperfection in coins as standards of value. Notwithstanding their natural durability, they are subject to con tinual wear, and must be gradually diminished in weight. They are also exposed to the fraudulent experiments of men whose trade it is to rob them of a portion of their weight by artificial wear. The value of coins is therefore certain to be continually depreciated by loss of weight, apart from any other causes of variation.
From all these circumstances it is evident that gold and silver coins have qualities inherent in them which render them necessarily imper fect standards of value, with whatever care and skill they may be regulated. But, in addition to these natural causes of imperfection, others have been artificially produce.] by erroneous or dishonest politi cal expedients. There is no country perhaps in which the coinage has never been debased by the government. Debasement of coins was formerly a common artifice for increasing the revenue of states, and it has been effected in three different ways :-1. By diminishing the quantity of metal, of the standard fineness, in coins of a given denomi nation ; 2. By raising their nominal value and ordaining that they shall pass current at a higher rate ; and, 3. By debasing the metal itself, that is, by leaving the coin of the same weight as before, but reducing the quantity of pure metal and increasing the quantity of alloy In all these ways have the coins of England been debased at different periods of our history; and to so great an extent were they debased by successive kings, that from the Conquest to the reign of Queen Elizabeth the total debasementa of the silver coins have been estimated at 65 per cent. (Lord Liverpool, ' On Coins.) By expedients of an opposite character the standard of coins may be artificidlyraisead ; and the result of meuures connected with the coinage of this country was, that in a period of 115 years, from the 14 James 1. to the 1st George I., the value of gold coins, as compared with silver coins, was raised 39 per cent. (Ibid.) No further examples are needed to prove the inconstancy of coins as a standard, when they forum the sole currency of a country.