Chap 10: Coin Exportation

Chap 10. THE BAn On CoIn Exportation

  • Because of these tenets, the government banned coin exportation.
    • This ban has been extremely hurtful to the country’s commerce.
    • Because whatever amount of money there is in any country above what is needed for circulation is merely a dead stock.

 

  • In King William’s time, there were two species of coin:
    1. Milled
    2. Unmilled
  • The unmilled was frequently clipped by different persons in its circulation.
    • This caused frequent disorders among the people.
    • The parliament ordered all the clipped money to be brought into the mint.
    • The government spent about 2 million to recoin it.
      • They thought it just and proper to ban the exportation of money.
    • However, the merchants [201] complained of this hardship.
      • They were then allowed to export a little money.
  • The great complaint was always the scarcity of money.
    • To remedy this, the government established a common office for coining money.
    • Everyone could get their gold and silver turned into coin without any expense.
  • A lot of coin was melted down and exported since coin was of no more value than bullion.
    • To prevent this, melting coins became a felony.
    • But it is such a simple operation that the law was easily eluded.
    • More coin was exported than ever.
    • This could have been easily prevented by setting a price on the coinage of bullion.
      • But such a regulation was never thought of.

 

  • Any regulation of the above kind is very absurd because:
    • there is no fear if things be left to their free course that any nation will want money sufficient for the circulation of their commodities, and
    • every ban of exportation is always ineffectual, and very often occasions the exportation of more than otherwise would be.
  • Supposed the Portuguese banned exporting money by capital punishment.
    • They have few goods to give for ours.
    • Their foreign trade must cease.
    • If they attempt to smuggle, the British merchant [202] must increase the prices of his goods to reward him for his added risk in being detected.
    • The Portuguese merchant would be a loser from this higher price.
  • In general, every prohibition of this kind hurts the country’s commerce.
    • Every unnecessary accumulation of money:
      • is a dead stock which could be employed in enriching the nation by foreign commerce.
      • also raises the price of goods
      • makes the country undersold at foreign markets.

 

  • Banning the exportation of money is really one great cause of the poverty of Spain and Portugal.
    • They gained the mines of Mexico and Peru.
    • They thought they could command all Europe by the continual supplies of those mines if they could keep the money among them.
      • Therefore, they banned its exportation.
  • But this had a quite contrary effect.
    • It is very unfavourable to the country if money were dammed up to an unnatural height and there is more than the circulation requires.
    • Because it is impossible that the exportation of gold and silver can be totally stopped since the balance of trade must be against them.
    • That is, they must buy more than they sell.
    • This balance must be paid in money.
  • Every commodity rises to an extravagant height.
    • The Portuguese pay for English cloth with an addition to its natural price, as the expense and risk of bringing it there.
    • All the goods sent to Spain and Portugal are carried by ourselves and consigned to the British factors, to be disposed of by them.
    • But besides the transportation and insurance, the British merchant must be paid for the risk of having his money seized in Portugal because of the ban.
    • All risk of forfeiture or penalty must lie on the goods.
  • This has a miserable [203] effect on the domestic industry of those countries.
    • This has halted their manufactures.
    • Nobody ever saw Spanish cloth in any other country.
    • Yet they have the best materials in the world.
    • They might monopolise European trade if they had our arts.
  • A general presented to his majesty his regiment clothed in Spanish manufactures.
    • This drew the attention of the nations who trade with Spain.
  • In general, they export no manufactured commodities, except swords and armour.
    • They have:
      • the best steel in the world.
      • only the spontaneous productions of the country, such as fruits and wines.

 

  • Similar regulations were made in Britain in King William’s time.
    • Money was thought to constitute opulence.
    • Therefore, its accumulation commanded the entire public attention.
  • They coined all money brought in for nothing.
    • The expenses of coinage amounted to about £140,000, were entirely thrown away.
    • Besides, great encouragement was given to exportation because, as gold and silver were coined for nothing, coined money could never be dearer than bullion.
  • The exportation of bullion was free.
    • So they melted down the coin and sent it abroad.
  • Presently, there is a great temptation to such practices.
    • An ounce of pure silver at mint price is valued at 62 pence.
    • But bullion is often bought at 66 pence.
    • Nothing is lost in melting.
    • There is a profit of 4 pence per ounce.
  • Because of this, we seldom or never see a new shilling.
    • It is one of the causes that silver is so scarce relative to gold.

 

Words: 850

For corrections or comments, please email jddalisay@gmail.com

Advertisements