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If the general declaration, that the dollar shall be the money unit of the United States, could be understood to give it a superior legality, in payments, the institution of coins of gold, and the declaration that each of them shall be equal to a certain number of dollars, would appear to destroy that interference : And the circumstance of making the dollar the unit in the money of account seems to be rather matter of form, than of substance.

Contrary to the ideas which have heretofore prevailed, in the suggestions concerning a coinage of the United States, thought not without much hesitation, arising from a deference for those ideas, the Secretary is upon the whole strongly inclined to the opinion, that a preference ought to be given to neither of the metals for the money unit : Perhaps if either were to be preferred, it ought to be gold rather than silver.

The reasons are these --------

The inducement to such a preference is to render the unit as little variable as possible, because on this depends the steady value of all contracts, and in a certain sense of all other property. And it is truly observed, that if the unit belong indiscriminately to both the metals, it is subject to all the fluctuations, that happen in the relative value, which they bear to each other : But the same reaction would lead to annexing it to that particular one, which is itself the least liable to variation; if there be, in this respect, any discernable difference between the two.

Gold may, perhaps, in certain senses, be said to have greater stability than silver: as being of superior value, less liberties have been taken with it, in the regulations of different countries. Its standard has remained more uniform, and it has, in other respects, undergone fewer changes: as being not so much an article of merchandize, owing to the use made of silver in the trade with the East-Indies and China, it is less liable to be influenced by circumstances of commercial demand. And if reasoning by analogy, it could be affirmed, that there is a physical probability of greater proportional increase in the quantity of silver, than in that of gold, it would afford an additional reason for for calculating on greater steadiness in the value of the latter.

As long as gold, either from its intrinsic superiority, as a metal, from its greater rarity, or from the prejudices of mankind, retains so considerable a pre-eminence in value, over silver, as it has hitherto had, a natural consequence of this seems to be that its condition will be more stationary. The revolutions, therefore, which may take place, in the comparative value of gold and silver, will be changes in the state of the latter rather than in the state of the former.

If there should be an appearance of too much abstraction in any of these ideas, it may be remarked, that the first and most simple impressions do not naturally incline to giving a preference to the inferior or least valuable of the two metals.

It is sometimes observed, that silver ought to be encouraged rather than gold, as being more conductive to the extension of bank circulation, from the greater difficulty and inconvenience which its greater bulk, compared with its value, occasions in the transportation of it. But bank circulation is desirable, rather as an auxiliary to, than as a substitute for that of the precious metals; and ought to be left to its natural course -- Artificial expedients to extend it, by opposing obstacles to the other, are at least not recommended by any very obvious advantages. And, in general, it is the fastest rule to regulate every particular institution or object, according to the principles which in relation to itself, appear the most sound. In addition to this, it may be observed, that the inconvenience of transporting either of the metals, is sufficiently great to induce a preference of bank paper, whenever it can be made to answer the purpose equally well.

But upon the whole, it seems to be most advisable, as has been observed, not to attach the unit exclusively to either of the metals; because this cannot be done effectually, without destroying the office and character of one of them as money, and reducing it to the situation of a mere merchandise; which, accordingly, at different times has been proposed from different and very respectable quarters; but which would probably be a greater evil than occasional variations in the unit, from the fluctuations in the relative value of the metals, especially if care be taken to regulate the proportion between them, with an eye to their average commercial value.

To annul the use of either of the metals, as money, is to abridge the quantity of circulating medium; and is liable to all the objections, which arise from a comparison of the benefits of a full, with the evils of a scanty circulation.

It is not a satisfactory answer to say, that none but the favoured metal would, in this case, find its way into the country, as in that all balances must be paid. The practicability of this would in some measure depend on the abundance or scarcity of it, in the country paying-Where there was but a little, it either would not be procurable at all, or it would cost a premium to obtain it-which, in every case of a competition with others, in a branch of trade, would constitute a deduction from the profits of the party receiving; perhaps, too, the embarrassments which such a circumstance might sometimes create, in the pecuniary liquidation of balances, might lend additional efforts to find a substitute in commodities, and might so far impede the introduction of the metals. Neither could the exclusion of either of them be deemed, in other respects, favourable to commerce. It is often, in the course of trade, as desirable to possess the kind of money, as the kind of commodities, best adapted to a foreign market.

It seems, however, most profitable that the chief, if not the sole effect of such a regulation, would be to diminish the utility of one of the metals. It could hardly prove an obstacle to the introduction of that which was excluded, in the natural course of trade; because it would always command a ready sale for the purpose of exportation to foreign markets. But such an effect, if the only one, is not to be regarded as a trivial inconvenience.

If then the unit ought not to be attached exclusively to either of the metals, the proportion which ought to subsist between them, in the coins, becomes a preliminary enquiry, in order to its proper adjustment. This proportion appears to be, in several views, of no inconsiderable moment.

One consequence of overvaluing either metal, in respect to the other, is the banishment of that which is undervalued. If two countries are supposed, in one which the proportion of gold to silver is as one to sixteen, in the other as one to fifteen, gold being worth more, silver less, in one than in the other, it is manifest that in their reciprocal payments, each will select that species which it values least, to pay to the other, where it is valued most. Besides this, the dealers in money will, from the same cause, often find a profitable traffick, in an exchange of the metals between the two countries. And hence, it would come to pass, if other things were equal, that the greatest part of the gold would be collected in one, and the greatest part of the silver in the other. The course in trade might in some degree counteract the tendency of the difference in the legal proportions, by the market value; but this is so far and so often influenced by the legal rates, that it does not prevent their producing the effect which is inferred. Facts too, verify the inference: In Spain and England where gold is rated higher than in other parts of Europe, there is a scarcity of silver, while it is found to abound in France and Holland, where it is rated higher in proportion to gold, than in the neighbouring nation. And it is continually flowing from Europe to China and the East-Indies, owing to the comparative cheapness of it in the former, and the dearness of it in the latter.

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