Front Page Titles (by Subject) Supply of Silver Coin. - Money and the Mechanism of Exchange
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Supply of Silver Coin. - William Stanley Jevons, Money and the Mechanism of Exchange 
Money and the Mechanism of Exchange (New York: D. Appleton and Co. 1876).
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Supply of Silver Coin.
On account of the absurd misapprehensions recently existing as to the scarcity of silver money, and the supposed right of private individuals to demand the coinage of silver, it may be well to describe exactly how the supply of silver coin is legally regulated and practically carried out. There is no law, statute, or common, which gives any private person, company, or institution, the right to take silver to the mint, and demand coin in exchange. Thus it is left in the hands of the Treasury and the mint to issue so much and such denominations of silver coins as they may think needful for the public service. This state of the law is perfectly right; because, as the silver coins are tokens, they cannot be got rid of by melting or exportation at their nominal values. If individuals were free to demand as much silver coin as they liked, a surplus might be thrown into circulation in years of brisk trade, which in a subsequent year of depressed trade would lie upon people's hands.
Practically speaking, the mint is guided in the supply of silver coin by the Bank of England, not because this bank has by law any special powers, privileges, or duties in the matter, but because, in acting as the bank of banks, and the bank of government departments, it has the best opportunities of judging when more coin is wanted. Not only do all the London bankers draw silver coin from the Bank of England when they need it, but the same is done directly or indirectly by all the other bankers in the kingdom. A deficiency of silver coin in any county is shown by the stock of the local bankers running down. They replenish their stocks either from the nearest branch of the Bank of England or from their London agents, who again draw from the Bank of England. At other times or places, the bankers tend to accumulate a surplus of silver coin. Some banks in a large town may happen to have accounts with many shopkeepers, butchers, brewers, cattle-dealers, or dealers of one kind or another, who deposit silver coin in large quantities. Other banks may be largely drawn upon by manufacturers for the payment of wages, and may suffer from a deficiency of silver coin. It is a common practice, therefore, for bankers in any locality to assist each other by buying or selling superfluous silver coin as the case may require. If a superfluity of coin, however, cannot be got rid of in this way, it may be returned to the Bank of England or one of its branches. This bank indeed is in no way bound to provide or receive large sums in silver, and it therefore usually makes a small charge of about five shillings per hundred pounds to cover the trouble and risk. In consideration of this charge the bank bears the cost of transmission by railway, examines the coin for the detection of base pieces and the withdrawal of worn coin—which latter it sends to the mint for recoinage, and acts in general as the agent, of the mint.
Having the business so much in its hands, it is obvious that the department of the bank which manages the receipt and issue of silver coin can judge accurately when a fresh supply of coin is wanted. Before the stock runs too low notice is given to the mint, and money is usually advanced to the Master that he may purchase silver bullion for coinage. Under this system it is almost impossible for a deficiency of currency to arise without becoming known to the mint, and if, two or three years ago, the supply could not be made equal to the sudden demand, it was because the mint was not supplied by government with machinery adequate to the growing wants of the country. The existing system, in short, seems to be as nearly perfect as can be desired, provided that the mint be rebuilt and organized in such a manner as to enable it to meet any demand which the fluctuations of trade may occasion.