The smith's case seems certainly to have been a hard one.

the value or equivalent for which goods are exchanged, and in which contracts are generally made payable." Starting with this definition, we are at once confronted by four important difficulties.

In the first place, whatever metal is chosen for the purpose of coinage, its value must always vary with respect to itself, as well as with respect to the commodities for which it is exchanged. Gold is, for instance, more common now than before the discovery of the mines of California and Australia, and therefore less than formerly of a commodity of which the value has in the mean time remained the same can now be bought for the same amount of gold. This difficulty is indeed inherent in the subject, and is necessarily consequent upon the above definition of money. If we choose for our standard measure a material of trifling value and therefore insusceptible to market operations, it is not an equivalent; if, again, for the sake of equivalence, a material of value be chosen, its market variations render it no longer an exact and uniform measure.

In the second place, if more than one metal be used for currency, and each of them be equally legal tender to any amount, they will be perpetually varying in price with respect to each other, and it will happen that only that metal will be brought to the Mint which has the lowest value in reference to the other. The public will moreover be exposed to a traffic of one coin against the other, in which those unacquainted with the fluctuations of the market must be defrauded.

In the third place, if the sovereign determines the rate at which coins of two metals shall pass with respect to each other, it will happen that money-jobbers and others will always exchange the coin least priced in the market, and will melt down the other for exportation, and one coin or the other will consequently be incessantly liable to be driven temporarily from circulation.

In illustration of these remarks we need only refer to the account already given of the perpetual confusion and inconvenience occasioned by the existence of a double standard in this country. Between 1663 and 1717, when gold coin took its intrinsic value and rose or fell in price like any other commodity, there was always a dearth of coins of one or other metal, while the popular ignorance as to the proper relative value of gold and silver naturally unsettled the prices of all things; even the acute intellects of Locke and Newton could not satisfactorily cope with these evils. When, on the other hand, the value of the guinea was, by the advice of Newton, fixed at 21 shillings, then, since its intrinsic worth was only 20s. 8d., all considerable payments were thenceforward made in gold coin, and the good and weighty silver coins were exported. Thus the silver currency once more fell into a state of grievous imperfection.

In the' fourth place, the wear and tear to which the coins are subject in passing from hand to hand gradually diminishes their value. In 1773, for instance, it was estimated by Lord Liverpool that the shillings then current had been diminished by one sixth, and the sixpences by one fourth even, of their original value. Previous to the great re-coinage of 1696, the silver coin, as already stated, was reduced by nearly half its weight. Especially addressing himself to the consideration of the second and third of these difficulties, Lord Liverpool struck at once to the root of the question by advocating, first, the adoption of a single standard of value, secondly, the choice of gold as that standard, and, thirdly, the issue of silver coin at a nominal value in excess of its intrinsic worth, its functions being at the same time limited to the payment of sums not exceeding forty shillings. In 1816 these important reforms were further supported by a committee of the Privy Council, and were carried into effect by an Act of Parliament of that year. Gold had, indeed, for a hundred years previously, been, to all intents and purposes, the measure of value in England, all large payments being made in gold coin; the real benefit of the Act was the prevention of the disastrous consequences of the exportation of the silver coin, to which it was continually liable whenever that metal reached a high price. As the Troy pound of standard silver was now divided into sixty-six shillings, and gold was thereby estimated with regard to silver in the ratio of about 14 1/6 to 1, the temptation to export silver coin was removed, as its intrinsic value could never exceed that which it bore by law. On the other hand, by converting it into a subsidiary currency for domestic use, and fixing a trifling sum beyond which it could not be legally tendered in payment, a profit on exchanging silver for gold was equally provided against.

As regards the diminution of the coin by abrasion in passing from hand to hand, the Act of 1774, as already mentioned, pronounced gold coins below a certain weight to be no longer legally current, while the withdrawal and recoinage of silver coins was, upon the demonetization of silver in 1816, undertaken by the Government. The loss on gold coins which have become' light,' i.e., below their 'least current weight,' was made to fall, and still falls, on the last holder. We shall, later on, have occasion to refer to the vexed question of the justice of this law.

Meanwhile, another very different consideration arose from the change. The great increase of gold coinage necessarily following upon the adoption of that metal as the sole standard raised to an enormous extent the profits of the moneyers, who had already reaped a rich harvest from the general recoinage of gold in 1774. In 1837 a select committee of the House of Commons commenced an inquiry into " the establishment of the Mint, and the system under which the fabrication and delivery of the coin were conducted," but the dissolution of Parliament prevented its completion. The work was resumed, however, in 1848 by a Royal Commission under the presidency of Mr. Shiel, master of the Mint, and in consequence of their report, which was published in the following year, an entire change of constitution was carried out in 1850. The contract system was finally abandoned, and the operations of melting and coining were conducted by salaried employees of the Government under the superintendence of the Mint-master, whose appointment was made permanent. The moneyers attempted to defend their position on the ground that they were a corporation, and had a prescriptive right to contract for the coinage; but this plea, which could not be maintained in 1697, found no better fate in 1848, and its fallacy was fully exposed by the able statement of the secretary of the commission.* It is clear that this reform saved the country a sum at least as large as the profits previously made by the moneyers, and, as a matter of fact, the annual saving has been found to be some £10,000. In further pursuit of the recommendations of the commissioners, the system of "Indentures" was abandoned, and the regulation of the coinage was placed in the hands of the Treasury.