Front Page Titles (by Subject) CHAP. XX.: Of Reducing Moneys to the Lowness of Ancient Values. - A Select Collection of Scarce and Valuable Tracts on Money
The Online Library of Liberty
A project of Liberty Fund, Inc.
CHAP. XX.: Of Reducing Moneys to the Lowness of Ancient Values. - John Ramsay McCulloch, A Select Collection of Scarce and Valuable Tracts on Money 
A Select Collection of Scarce and Valuable Tracts on Money from the Originals of Vaughan, Cotton, Petty, Lowndes, Newton, Prior, Harris, and Others, with a Preface, Notes, and Index (London: Printed for the Political Economy Club, 1856).
About Liberty Fund:
Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.
The text is in the public domain.
Fair use statement:
This material is put online to further the educational goals of Liberty Fund, Inc. Unless otherwise stated in the Copyright Information section above, this material may be used freely for educational and academic purposes. It may not be used in any way for profit.
Of Reducing Moneys to the Lowness of Ancient Values.
SOME are of Opinion, that the best course to remedy all Inconveniences in Matters of Money, were to reduce it to the ancient Value:
As for example, A pound weight of Silver of the sterling standard to make but twenty shillings in Silver; and a pound weight of crown Gold to make 12l. sterling; and so Angel-Gold to be coined in Proportion, for (say they,) since that was the first and original settlement of the sterling standard, and that by the raisings of other Nations whom we thought it necessary to follow, we are grown to that excessive diminution of the Intrinsical value of our Money as is manifest, and that the Mischiefs do so threaten us, by the daily raising of our Neighbours, as at length (to bring on) inevitable Confusion; it will be best to reform the Mischief before it be grown to extremity; and the best Reformation will be to reduce it to the first and original settlement: The Commodities whereof are many:
First, The prices of things will be reduced to some antient moderation, then those who live upon antient Rents, and Fees, and Rights, and Tenures of their Lands and Offices, who have received extream injustice by the diminution of the Intrinsical value of Money, shall by this Reduction be recompenced in justice again. But above all, the King, whose Revenue is only publick, shall receive a great and a just enlargement therein: This Diminution of the intrinsical value of Money being not the least cause of the visible wants wherewith the Crown is this day oppressed, and this Reduction being so great and important as it is, all other Nations, and all Merchants in their exchanges, must of necessity come to a new valuation of their Moneys in comparison of ours: and that cannot be, but by a true calculation of the intrinsical value of either of them, by which means if we do now sustain any wrong by the reputed valuation of our Moneys, or exchange of them, we shall then receive right. And England being a Countrie able to send out more Commodities than it hath need to receive, we shall of necessity return the overplus in Bullion.
But to examine the solid Truth of these Allegations, it will be necessary to consider by what means this Reduction may be effected.
First, Therefore if you will reduce Moneys to the antient values, either you must do it by several degrees, (this being the way by which the mischief grew) or you must do it all at once.
As for example of a Reduction by degrees, Silver is now coined at five shillings and two pence an ounce, and Crown Gold at three pound eight shillings and four pence the ounce; begin then, first to reduce by coining Silver at fourteen groats the Ounce, and Crown Gold at three pound one shilling and six pence the Ounce; and when it is thus settled, then some time after reduce them both, yet to a lower price, and so until you come to the Original settlement. But is it not then manifest that if these coins be so much heavier than the former, as this Proportion doth make them, and yet go at the same price as the other did, yet as fast as they are coined, they will be melted or transported for advantage?
Besides our Merchants will (not) bring this Silver and Gold unto you to so great a loss: on the other side, if you make all the old Money uncurrent, and you do make it so many times uncurrent as you do reduce it towards the antient values, by degrees the confusions will be so great as the Kingdom cannot bear them, and the continual new coining of your Money will consume all the value of your Money in that charge: there is then no other way left but to leave the old Money still current, but abased so much in price as it is worse than the new Money in intrinsical value. But this is hardly possible, considering that the fractions in the old Money will be so confused as no man shall know how to pay or receive it; besides all men of what condition soever that are to pay Money, in what nature soever, shall pay ten in the Hundred more than they should otherwise have done.
But suppose this Inconvenience might be sufferable for once, yet when they must return again, as often as by degrees you do reduce your Money towards the antient values, I do see no possibility to conquer them; it is then best to consider what will follow of it, if this Reduction to the antient values be made all at once, which is thus propounded.
That new Money should be coined at twenty pence an ounce, Silver; and that the old Money should be still left current at the third part of the value for which now it goeth, as six pence to be current for two pence, and twelve pence for a groat, so as all Fractions should be avoided: and the Gold should be reduced to a like Proportion, and that all contracts and payments, from such a day to come, should be made and paid in new Money or in old Money, valuing it only at the third part of the new Money; But if the Proposition were simply thus, it were insupportable, for then he that sits now at a rent of 10l. a year, and is hardly able to pay it should in effect, after the day when the new Money is to be current, pay thirty pounds a year; and he that borrowed ten pounds before that day, after that day shall pay thirty, and so it would be of all other payments. And it is no satisfaction to say, That would be no Injustice, because he that pays Money, either for Debt or Rent, or any other waies, must receive it from others, be it either in Debt, Rent, or for the price of any thing to be sold, and so he shall pay no more in Proportion than he shall receive: for if it be true, which is the mainest Benefit propounded by this Reduction, that as the price of Money shall be abased so the price of all things will abate in Proportion, then he that is to raise his payments out of the price of other things shall raise no more in intrinsical value than he should have done before, yet he shall pay in intrinsical value thrice as much as he did before.
To solve this Objection, there are two ways propounded, but either of them have their Inconveniences;
The first is, that this payment in new Money shall only extend to future Contracts, and that all former Contracts shall either be paid in old Money or in new Money valued at three times the old Money: But if you admit of this, you shall by this Reduction only raise a great rumor and Confusion among the People, and all the Benefits propounded are quite blown away.
Besides the Injustice, as it was very apparent to all that were to pay Money in the former way, so it is as apparent in this way to all that are to receive Money, for that they shall receive in extrinsical value but two pence for six pence, and one shilling for 3 shillings, but above all others, the King would be most prejudiced.
The second way of solving the former Objection is this, That all payments, for the future, should be made in new Money or in old, valuing the old a third part, and that in like manner all antient Contracts, Rents, and Rights reserved should be acquitted in new Money, or in old Money valued at the third part of the new, and that this word of antient Contracts and Rights, should be defined from such a time as since which the prices of things have encreased, as the value of Money is by this Reduction to be abated; As for Example,
Since the year of the eighteenth of Henry the Eighth, when he began to coin Base money, since which time generally the price of things is trebled at the least, in some more, in some less. And that all Contracts and payments reserved, since the eighteenth year of Henry the Eighth, until the day when the new Money is made current, should be acquitted in old Money, or in new Money valued three times as much as the old: By this means the Injustice of the former ways seemeth to be equally parted, in that some Receivers by this way should gain and some Receivers should loose, and some Payers should gain and some should loose.
But this Proposition brings with it a new Inconvenience, which is, That this time of the eighteenth of Henry the Eighth, being so antient, it would breed many Controversies, as to what payments were contracted for or reserved before that time or not. But suppose that this Reduction were effected, and that our Moneys were both by reputed valuation and by exchange compared with Forrein Moneys, according to their true intrinsical value, yet do I not see that this Reformation, for all this, would be stable and permanent; for, if afterwards other Nations shall by degrees again diminish the Intrinsical value of their Moneys, either we must resolve to stand firm to this Reduction, and so to take the hazard of all losses and Inconveniences which the not raising of our Moneys when our Neighbours raise theirs do bring with it; or if we shall raise again as they shall raise theirs, then all the benefit of this troublesom Reduction will be, That we shall yet be three hundred years longer ere we do grow to so great a diminution in the Intrinsical value of our Moneys, as we do at this present undergo.