During all this period there were frequent and constant supplies of silver, just as the process of coinage was attaining perfection. Currency, prices and coinage were in the same jumble in England even up to the close of the eighteenth century as it is in China to-day. Sir David Barbour states that the English silver currency fell into a very unsatisfactory state owing to the clipping of the coins in the reign of William III and great difficulties were experienced at the time of the re-coinage of the silver money under that king. The clipped money was liable to frequent fluctuations and its value was determined by the amounts available; curiously enough it was current at a price midway between its nominal value and its value as bullion. The guinea was, therefore, in great demand and passed at one time for as much as thirty shillings - it being understood of course that the guinea was coined in gold and its real value was twenty-one shillings and six pence. Lord Liverpool says that "the high rate of the gold coins to which the people then voluntarily submitted (i.e., after the re-coinage) can only be ascribed to the preference which at that time began to be given to the use of gold coins in all payments, at least of considerable amount." There is no doubt, however, that they paid this high price for the guinea on account of the interposition of public authority. At first the Government received guineas at 21/6 per piece; later on, however, they reduced it to 21/ - which was about its market value as bullion. The guinea, however, was over-valued; and naturally the result was that gold became the chief currency of England and silver was being gradually abandoned. The English people had been accustomed to, and suffering from, an inconvertible and depreciated paper currency, and consequently did not display any repugance to the use of gold.
* Extract from "The Effects of Great Discoveries of the Precious Metals."