is a matter requiring much care. The objects aimed at in imposing the stamp are (1) to prevent the coin being counterfeited, and (2) to prevent any of the metal being abstracted. The former of these objects can be best attained by making the device such as can be obtained only by powerful and expensive machinery. The most improved methods must be adopted, and the greatest pains taken to have the device perfectly executed. The latest improvement in the process of coining is the introduction of the knee-joint press. The latter difficulty is best obviated by using special care in marking the edges of the coins. Ancient coins were issued with unstamped edges which presented no impediment to clipping, but modern coins, at least those of any size, are protected by the edge being milled or by a legend being inscribed round it. The combination of milled edges with a raised legend would be a still more effectual
means of protecting the coinage from interference.Another matter of importance in the process of coining is the nature and proportion of alloy to be used. The necessity for some mixture arises from the fact that gold and silver are both naturally soft, and, to obviate this, copper has been mixed with them, so as to produce a harder substance. The Austrian ducat is the nearest approach to purity among the principal coins of Europe, being composed of seventy-one parts of pure gold to one of alloy. The English gold coins are eleven-twelfths pure gold, while the silver ones are thirty-seven-fortieths pure silver. The origin of the difference is purely historical. The general gold proportion is nine-tenths gold to one-tenth alloy, while in some coinages the proportion of silver to alloy is nearly five to one, the countries composing the Latin Union having adopted that proportion in order to reduce their smaller silver coins to tokens. Copper is the usual material for alloying, but the Melbourne mint used silver for some time. It is this silvery alloy that accounts for the yellow appearance of many Australian sovereigns. They, however, are rapidly disappearing, as it is profitable to melt them down. It has been mentioned above that the wear of small coins is greater than that of large ones, and it may be added here that the wear of coins in general is an important question in connexion with their legal circulation. The English sovereign is believed to remain above the least current weight for from fifteen to twenty years. For the technical processes of coining, &c., reference may be made to the article Mint.
The next topic to be considered is: Who should issue money? In the earlier stages of currency the question was not so prominent, but the establishment of coining brought it forward. In Greece each city being autonomous claimed and exercised the right of freely coining as it desired, the coins being, of course, received in other cities only at their real value. The consequences of this system were generally beneficial. The Greek coins were usually up to their nominal value, as debased coinage was unable to circulate beyond the place of issue, and therefore extremely inconvenient to the members of the state issuing it.[1] Under the Roman republic private persons were probably allowed to bring metal to be coined, though the coins seem generally to have had the name of one of the consuls for the year on them. Under the empire the doctrine became established that the right of coining belonged exclusively to the emperor, and till the fall of the Western empire this was acted on. After the establishment of the various barbarian kingdoms, each sovereign assumed the privilege of coining, a right which in France was extended to or rather usurped by the principal nobles.[2] In England the king alone coined silver.[3] At present the control of the operations of the mint is completely in the hands of the executive; and, until recently, no question on theoretical grounds as to the propriety of this method has ever been raised.[4]
the consideration as to the proper persons to bear the expense of the process. At first sight the answer seems plain enough. Coins are a manufactured article quite as much as plate, and are rendered more valuable by being assayed, weighed, and certified. It appears therefore quite proper that those who bring metal to be coined should bear the expense of the coinage, or, in other words, should give up a part of the metal to the mint, thus paying for the service rendered to them in the same manner as those sending letters pay the postal department for their transmission. This course has been usually adopted. England, however, has taken a different line. In order to encourage the coining of the precious metals, no charge was made at the mint beyond that involved in the necessary delay in the operation; and this is at present the case with gold. Though this arrangement was originally introduced in obedience to the prejudices of the mercantile system which regarded gold and silver as being peculiarly wealth, it may be defended on reasonable grounds: for (1) the expense of the mint is very small compared with the amount of coin turned out, and (2) the coins produced are used by the nation, and therefore their expense may quite fairly be defrayed from the national revenue. Again, as the profit on the silver coinage (owing to circumstances to be subsequently discussed) is large, that may be set off against the free coinage of gold. The charge levied on coining, if confined to the expenses incurred, is called brassage; if it is anything above that cost it is known as seigniorage, which latter term is also used to denote both kinds of charge. The effect of seigniorage (using the term in its more extended sense) on the value of coins is to lower them, in fact, as Tooke has put it, seigniorage is always a kind of debasement, unless accompanied with limitation.[5] If the same quantity of metal be in circulation there will be a greater number of coins, and therefore nominal prices will be higher. It is, however, possible that the increased prices may check the production of the precious metals, thus making the value of the metal higher than it would otherwise be. Whether this will happen or not depends on the actual conditions of production, and is incapable of being predicted. One advantage which undoubtedly results from a charge on coinage is that it checks the tendency to melt coin when exported, for where a seigniorage is imposed coins are more valuable than the uncoined metal by the amount of the seigniorage. It therefore becomes the interest of the holder not to melt down the coins, as in doing so he loses the extra value given by the coining. Another factor in the expense of currency is the loss which arises from the wear and tear which money undergoes, and the consequent cost of replacing the light or missing pieces. The last and largest item is the interest on the total amount of money in use. To take the case of England, the value of the metallic
currency is estimated at about £130,000,000. The interest
- ↑ See Lenormant, Contemp. Rev., February 1879.
- ↑ Hallam, Middle Ages, i. pp. 205–206.
- ↑ Lord Liverpool, Coins of the Realm, cli. v.
- ↑ “We may take as an example the function (which is a monopoly too) of coining money. . . . No one, even of those most jealous of state interference, has objected to this as an improper exercise of the powers of government.” Mill, Princ., B. v. ch. 1, § 2. But see, for objections, H. Spencer, Social Statics, pp. 400–402, and J. L. Shadwell, System of Pol. Econ., p. 264.
- ↑ Tooke, Hist. of Prices, i. 121 sq. It is impossible, however, to agree with Tooke that uncoined bullion would be higher in value than coin when a seigniorage is charged on the latter. He seems to ignore the fact that the value of the precious metals is partly dependent on their use as currency, and that the seigniorage represents a tax levied on the extra value resulting from the use of the metal as money.
