VI.

If the feignorage had been only one per cent. CHAP. and the gold currency two per cent. below its standard weight, the bank would in this cafe have loft only one per cent. upon the price of the bullion; but as they would likewife have had a feignorage of one per cent. to pay, their lofs upon the whole tranfaction would have been exactly two per cent. in the fame manner as in all other cafes.

If there was a reafonable feignorage, while at the fame time the coin contained its full standard weight, as it has done very nearly fince the late re-coinage, whatever the bank might lose by the seignorage, they would gain upon the price of the bullion; and whatever they might gain upon the price of the bullion, they would lofe by the feignorage. They would neither lose nor gain, therefore, upon the whole tranfaction, and they would in this, as in all the foregoing cafes, be exactly in the fame fituation as if there was no feignorage.

When the tax upon a commodity is fo moderate as not to encourage fmuggling, the merchant who deals in it, though he advances, does not properly pay the tax, as he gets it back in the price of the commodity. The tax is finally paid by the last purchafer or confumer. But money is a commodity with regard to which every man is a merchant. Nobody buys it but in order to fell it again; and with regard to it there is in ordinary cafes no laft purchafer or confuner. When the tax upon coinage, therefore, is fo moderate as not to encourage falfe coining,

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IV.

BOOK coining, though every body advances the tax, nobody finally pays it; because every body gets it back in the advanced value of the coin.

A moderate seignorage therefore would not in any cafe augment the expence of the bank, or of any other private persons who carry their bullion to the mint in order to be coined, and the want of a moderate seignorage does not in any cafe diminish it. Whether there is or is not a

seignorage, if the currency contains its full standard weight, the coinage costs nothing to any body, and if it is short of that weight, the coinage must always coft the difference between the quantity of bullion which ought to be contained in it, and that which actually is contained in it.

The government, therefore, when it defrays the expence of coinage, not only incurs fome small expence, but loses some small revenue which it might get by a proper duty; and neither the bank nor any other private persons are in the smallest degree benefited by this useless piece of public generofity.

The directors of the bank, however, would probably be unwilling to agree to the imposition of a feignorage upon the authority of a speculation which promifes them no gain, but only pretends to infure them from any loss. In the present state of the gold coin, and as long as it continues to be received by weight, they certainly would gain nothing by fuch a change. But if the custom of weighing the gold coin should ever go into difuse, as it is very likely to do, and if the gold coin should ever fall into the same state of degradation

VI.

degradation in which it was before the late re. CHAP. coinage, the gain, or more properly the savings of the bank, in confequence of the impofition of a feignorage, would probably be very confiderable. The bank of England is the only company which fends any confiderable quantity of bullion to the mint, and the burden of the annual coinage falls entirely, or almost entirely, upon it. If this annual coinage had nothing to do but to repair the unavoidable losses and necessary wear and tear of the coin, it could feldom exceed fifty thousand or at most a hundred thousand pounds. But when the coin is degraded below its standard weight, the annual coinage must, befides this, fill up the large vacuities which exportation and the melting pot are continually making in the current coin. It was upon this account that during the ten or twelve years immediately preceding the late reformation of the gold coin, the annual coinage amounted at an average to more than eight hundred and fifty thousand pounds. But if there had been a seignorage of four or five per cent. upon the gold coin, it would probably, even in the state in which things then were, have put an effectual stop to the business both of exportation and of the melting pot. The bank, instead of lofing every year about two and a half per cent. upon the bullion which was to be coined into more than eight hundred and fifty thousand pounds, or incurring an annual lofs of more than twenty-one thousand two hundred and fifty pounds,

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воок pounds, would not probably have incurred the tenth part of that lofs.

IV.

The revenue allotted by parliament for defraying the expence of the coinage is but fourteen thousand pounds a year, and the real expence which it costs the government, or the fees of the officers of the mint, do not upon ordinary occafions, I am assured, exceed the half of that fum. The faving of fo very small a sum, or even the gaining of another which could not well be much larger, are objects too inconfiderable, it may be thought, to deserve the ferious attention of government. But the saving of eighteen or twenty thousand pounds a year in cafe of an event which is not improbable, which has frequently happened before, and which is very likely to happen again, is furely an object which well deferves the ferious attention even of so great a company as the bank of England.

Some of the foregoing reasonings and obfervations might perhaps have been more properly placed in those chapters of the first book which treat of the origin and ufe of money, and of the difference between the real and the nominal price of commodities. But as the law for the encouragement of coinage derives its origin from those vulgar prejudices which have been introduced by the mercantile system; I judged it more proper to referve them for this chapter. Nothing could be more agreeable to the spirit of that system than a fort of bounty upon the pro. duction of money, the very thing which, it fuppofes,

VI.

poses, constitutes the wealth of every nation. ItCHAP. is one of its many admirable expedients for enriching the country.

T

PART FIRST.

Of the Motives for establishing new Colonies.

VII.

HE interest which occafioned the first set- CHA P. tlement of the different European colonies in America and the West Indies, was not altogether so plain and diftinct as that which directed the establishment of those of ancient Greece and Rome.

All the different states of ancient Greece poffeffed, each of them, but a very fmall territory, and when the people in any one of them multiplied beyond what that territory could eafily maintain, a part of them were fent in quest of a new habitation in some remote and diftant part of the world; the warlike neighbours who furrounded them on all fides, rendering it difficult for any of them to enlarge very much its territory at home. The colonies of the Dorians reforted chiefly to Italy and Sicily, which, in the times preceding the foundation of Rome, were inhabited by barbarous and uncivilized nations: thofe

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