Elementary arithmetic, with brief notices of its history... by Robert Potts.

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MONEY.

the relative value of gold and silver arising from demand and supply
in commerce, there is another cause which has in past times very
materially affected their relative values in this country.
Gold is said to be lowered in respect of silver, when a pound weight
of the former is declared by law to be exchangeable for a less quantity
of the latter than formerly; and to be raised when the contrary takes
place. And silver is said to be lowered or raised when the pound
weight of silver is exchanged for a greater or less weight of gold than
before. There is another relation to be noted, when gold and silver
remain in the same proportion to each other, but the value of
both is altered with respect to some other commodities. This alteration may be effected, either by coining the pound weight of
standard gold and silver into a greater number of pieces of the
same assigned value, as before, or by causing the current coins to
pass for more than their previous values. In either case, the
value of both the gold and silver is enhanced, and one may be
enhanced more than the other, when each is made the subject
of comparison with other commodities. The coin which is to be the
principal measure of property, ought to be made of one metal
only according to Mr. Locke, who considers this money the measure
of commerce and contracts; and observes, that "two metals such as
gold and silver cannot be the measure of commerce both together in
any country." The truth of this principle results from the nature and
uses of money. But coins of one kind of metal do not conveniently
answer all the purposes of money. Coins of gold are well adapted for
large payments, but not for retail traffic; and coins of silver and
copper would be too bulky for large payments, and therefore inconvenient. It is therefore necessary, that in commercial countries
coins should be made of different metals. If gold in ingots or coins
be taken as the standard or principal measure of property, silver and
copper coins may be used as a legal tender only in a limited degree,
so far only as they are authorized by the State. The coins of every
State are the measure of property within that State according to the
nominal value declared and authorized by the supreme power. If
gold be the legal tender without limitation, the silver and copper
moneys must be made subordinate and auxiliary, as supplying coins of
small value into which gold cannot be divided without the inconvenience which arises from the smallness of the pieces.
The variations in the relative values of gold and silver are also
affected by other considerations and causes which must ever have
an influence on society and nations. A dread of public insecurity and
political convulsions in a nation, will have a tendency to raise the
value of the precious metals. War will tend to raise the value
of silver more than the value of gold. A turn of commerce unfavourable to a country will also affect the relative values of gold and silver,
and will tend to raise the price of that metal which is preferred
by those nations with which the inhabitants have commercial dealings.
And in large commercial concerns, gold will be preferred, as by
means of it extensive exchanges can be carried on with the greatest
facility. If the coinage in circulation in any country be defective in
purity or weight of metal, all payments from that country in its
exchanges with other countries, will be augmented in proportion to
the defect of the coins from their real value. Hence, it follows, that
the exchange is always against a country which has a faulty or