utter, publish, or sell, or bring into the United States or any place subject to the jurisdiction thereof, from any foreign place, knowing the same to be false, forged, or counterfeit, with intent to defraud any body politic or corporate, or any person or persons whomsoever, or shall have in his possession any such false, forged, or counterfeited coin or bars, knowing the same to be false, forged, or counterfeited, with intent to defraud any body politic or corporate, or any person or persons whomsoever, shall be fined not more than five thousand dollars and imprisoned not more than ten years." For counterfeiting minor coins the penalty is a fine of not more than one thousand dollars and imprisonment for not more than three years. For debasing, defacing, injuring, etc., any gold or silver coins with intent to defraud, the penalty is not in excess of a fine of two thousand dollars and imprisonment for five years.

50. SEIGNORAGE1

The word seignorage, also spelt seigneurage, seigneuriage, and seigniorage, is of Norman-French origin. Under the feudal system the right of coinage was an exclusive privilege of the king or seigneur. This personage not unnaturally took the opportunity of exacting a fee when the mint was employed in the coinage of metal belonging to his subjects. The money thus raised was retained by the king for his use, and it was to this portion of the royal income that the title seignorage was applied.

The total amount paid by merchants for the privilege of having their bullion converted into coin was the sum of two charges, one of which went to the king, and the other to the officers of the mint. The first was the seignorage, the second the brassage. This latter term has never been generally used in England, but it has been referred to under the head of mint-charge, or charge for coinage.

These two charges were fixed at a sum per pound calculated on the gross weight of coin produced from the bullion sent in, and their amount was collected by a deduction from the coin delivered to the merchant. Thus we find that in the reign of Edward III (1345) the deduction made at the mint from gold coins delivered to the public was at the rate of £1 3s. 6d. per lb., of which £1 went to the king as his seignorage, and 3s. 6d. to the mint to defray the cost of coinage. In the same year the charge for coining silver was fixed at 1s. 3d. per lb., of which 9d. went to the officers of the mint, and 6d. to the exchequer.

From Palgrave, Dictionary of Political Economy, III, 372-73.

The revenue directly raised by the seignorage charge was at various times supplemented by one or both of the following means: (a) the use of the Tower pound; and (b) advantage taken of the Remedy, or Shere, allowance to issue coins uniformly short of their full legal weight.

The Tower pound was equal in weight to 11 oz. 5 dwt. troy, so that 16 lb. Tower = 15 lb. troy. Metal sent to the mint for coinage was received by troy weight, but given out to the coiners by Tower weight. The legal number of pieces per pound was then coined from this diminished weight of metal. The king thus added to his revenue a sum equal to the value of one-sixteenth of all the metal brought to the mint for coinage, while he derived the same amount from the seignorage charge as if the coin had been weighed and delivered by troy weight, this charge being based upon the number of Tower pounds of coin produced. The use of the Tower pound in the mint was abolished in 1527 by a proclamation of Henry VIII.

51. SOCIAL EFFECTS OF A BAD COINAGE1

BY THOMAS BABINGTON MACAULAY

The old crude hammered coins of Great Britain were of varying weight, slightly irregular shape, and with unmilled edges. As a result they were easily clipped and mutilated. In the time of William III the practice of paring down money was far too lucrative to be checked even by the penalty of high treason. The severity of the punishment gave encouragement to the crime. For the practice of clipping did not excite in the common mind a detestation resembling that with which men regard murder, arson, robbery, nay, even theft. The injury done by the whole body of clippers to society as a whole was indeed immense; but each particular act of clipping was a trifle. To pass a half-crown after paring a pennyworth of silver from it seemed a minute and almost imperceptible fault. Even while the nation was crying out most loudly under the distress which the state of the currency had produced, every individual who was capitally punished for contributing to bring the currency into that state had the general sympathy on his side. Constables were unwilling to arrest the offenders. Justices were unwilling to commit. Witnesses were unwilling to tell the whole truth. Juries were unwilling to pronounce the word guilty. There was a general conspiracy to prevent the law

from taking its course. The convictions, numerous as they might seem, were few indeed when compared with the offenses, and the offenders who were convicted looked on themselves as murdered men, and were firm in the belief that their sin, if sin it were, was as venial as that of a schoolboy who goes nutting in the wood of a neighbor.

In the autumn of 1695 it could hardly be said that the country possessed, for practical purposes, any measure of value. It was a mere chance whether what was called a shilling was really ten pence, sixpence, or a groat. The results of some experiments that were tried at that time deserve to be mentioned. The officers of the exchequer weighed £57,200 of hammered money which had recently been paid in. The weight ought to have been above 220,000 ounces. It proved to be under 114,000 ounces. Three eminent London goldsmiths were invited to send £100 each in current silver to be tried by the balance. The £300 ought to have weighed almost 1,200 ounces. The actual weight proved to be 624 ounces. The same test was applied in various parts of the kingdom with practically everywhere similar results. There were some northern districts, however, into which the clipped money had only begun to find its way. An honest Quaker who lived in one of these districts recorded the amazement with which, when he travelled southward, shopkeepers and innkeepers stared at the broad, heavy half-crowns with which he paid his way. They asked whence he came and where such money was to be found. The guinea which he purchased for twenty-two shillings at Lancaster bore a different value at every stage of the journey. When he reached London, it was worth thirty shillings and would have indeed been worth more had not the government fixed that rate as the highest at which gold should be received in the payment of taxes.

It may well be doubted whether all the misery which had been inflicted on the English nation in a quarter of a century by bad kings, bad ministers, bad Parliaments, and bad judges was equal to the misery caused by bad crowns and bad shillings. Those events which furnish the best themes for pathetic or indignant eloquence are not always those which most affect the happiness of the great body of the people. The misgovernment of Charles and James, gross as it had been, had not prevented the common business of life from going steadily and prosperously on. While the honor and independence of the state were sold to a foreign power, while chartered rights were invaded, while fundamental laws were violated, hundreds of thousands of quiet, honest, and industrious families labored and traded,

ate their meals, and lay down to rest, in comfort and security. Whether Whigs or Tories, Protestants or Jesuits, were uppermost, the grazier drove his beasts to market; the grocer weighed out his currants; the draper measured out his broadcloth; the hum of buyers and sellers was as loud as ever in the towns; the harvest-home was celebrated as joyously as ever in the hamlets; the cream overflowed the pails of Cheshire; the apple juice foamed in the presses of Herefordshire; the piles of crockery glowed in the furnaces of Trent, and the barrows of coal rolled fast along the timbered railways of the Tyne. But when the great instrument of exchange became thoroughly deranged, all trade, all industry, were smitten as with a palsy. The evil was felt daily and hourly in almost every place and by almost every class, in the dairy and on the threshing-floor, by the anvil and by the loom, on the billows of the ocean and in the depths of the mine. Nothing could be purchased without a dispute. Over every counter there was wrangling from morning to night. The workman and his employer had a quarrel as regularly as the Saturday came around. On a fair day or a market day the clamors, the reproaches, the curses, were incessant; and it was well if no booth was overturned and no head broken. No merchant could contract to deliver goods without making some stipulation about the quality of the coin in which he was to be paid. Even men of business were often bewildered by the confusion into which all pecuniary transactions were thrown. The simple and the careless were pillaged without mercy by extortioners whose demands grew even more rapidly than the money shrank. The price of the necessaries of life, of shoes, of ale, of oatmeal, rose fast. The laborer found that the bit of metal, which, when he received it, was called a shilling, would hardly, when he wanted to purchase a pot of beer or a loaf of rye bread, go as far as 'a sixpence. Where artisans of more than usual intelligence were collected in great numbers, as in the dockyard at Chatham, they were able to make their complaints heard and to obtain some redress. But the ignorant and helpless peasant was cruelly ground between one class which would give money only by tale and another which would take it only by weight.

III

EARLY EXPEDIENTS FOR INCREASING THE

CURRENCY

Introduction

The general confusion of mind that has always existed with reference to the nature and functions of money, and the widespread and persistent belief that money is somehow synonymous with, or at least a superior form of, wealth, and that in consequence its accumulation is one of the chief ends and aims of individuals and of society, are the main underlying causes of the great monetary movements and controversies of history. At bottom, the trade regulations to secure importations of specie, the periodical debasing of the currency, the issues of irredeemable paper money, and the use of two metals as a standard were all largely caused by the belief in the virtue of much money. And, conversely, the tremendous opposition to the abolition of these various systems or practices, one after another, has been largely due to the same underlying philosophy. It is necessary to say mainly or largely due to these views, because there has been at all times a scientific side to the controversies which was not controlled by this popular confusion, and there have been, also, numerous times, as will be noted later, when the popular arguments resulted from other influences. Nevertheless this general confusion of money with wealth must be taken as the starting-point for an understanding and appreciation of monetary history. Approaching the study of money from an academic standpoint alone affords but a meager understanding or appreciation of its relation to economic development.

It is the belief of Alexander Del Mar, who has doubtless given more study to the origin and development of monetary systems than any other student, that the history of money is the history of civilization. While this view is not accepted by most writers, all are nevertheless agreed that money has played a tremendous rôle in the evolution of society. Similarly, there has been more discussion on this subject, and more articles and books have been written on monetary issues, than on any other question in the realm of political economy. At the same time the various controversies have doubtless