Having seen how admirably adapted the precious metals are for use as money, we pass to a consideration of those artificial arrangements by which they are still further and more completely fitted for that purpose.

At first, these metals were used in ingots and bars, and passed by weight. Whenever a pecuniary transaction was made, scales were required to determine the quantity given in exchange.

This was a clumsy and imperfect mode of payment; for there would arise the question of quality as well as quantity, — of the pureness or fineness of the metal. This could only be ascertained by assay; and that could be accomplished only by persons having the necessary knowledge of metallurgy, with apparatus for conducting the process.

It was therefore natural, that, at an early period, a contrivance was hit upon which obviated all difficulties.

The bars, or ingots, designed for money, were first assayed, and made of one degree of fineness. This degree was called the standard. The metal thus assayed was then divided into pieces, and the weight carefully ascertained, and stamped upon each. These pieces were called coins; the process, coinage.

As this coinage involved great responsibility, it very properly became the duty and prerogative of the government. Each government established an institution for the purpose, called a mint. To these mints the people carried their gold and silver, and, by paying a very trifling seigniorage, had the whole amount returned to them in coin.

Such, at least, has been the general fact; but in the United States, and possibly some other countries, no seigniorage is charged, the whole being done at the expense of the government. The policy of this is quite doubtful. Government should retain a slight compensation for two reasons: first, a benefit has been conferred, for which the recipient should pay a fair equivalent: additional value, within the particular country, has been given by the additional labor; gold in the national coin being more useful than in bars. Second, because coin should be a slight fraction less valuable for mechanical purposes and for export than bullion; otherwise it will be wrought up into jewelry at home or shipped abroad, instead of bullion, and thus an unnecessary waste in coinage will be the consequence.

Such is the character of a currency composed entirely of money, or that which has value in itself. Of all subjects, this is one of the most simple, most free from all complexity and mystery. No one can fail to understand it. Government has not the slightest occasion to interfere with or regulate it. It obeys certain natural laws, which cannot be improved by man. All that government can usefully do is to certify to the weight and fineness of the coinage. It has no further concern with money.

The main point to be borne in mind, in relation to coinage, is, that government does not determine the value at all, but simply certifies to the weight and purity.