would have been a lofs of three per cent. upon the melting down of the gold coin. If the feignorage had been two per cent. there would have been neither profit nor loss. If the feignorage had been one per cent. there would have been a profit, but of one per cent. only, inftead of two per cent. Wherever money is received by tale, therefore, and not by weight, a feignorage is the most effectual preventative of the melting down of the coin, and, for the fame reason, of its exportation. It is the best and heaviest pieces that are commonly either melted down or exported; because it is upon fuch that the largest profits are made.

THE law for the encouragement of the coinage, by rendering it duty-free, was first enacted, during the reign of Charles II. for a limited time; and afterwards continued, by different prolongations, till 1769, when it was rendered perpetual. The bank of England, in order to replenish their coffers with money, are frequently obliged to carry bullion to the mint; and it was more for their intereft, they probably imagined, that the coinage fhould be at the expence of the government, than at their own. It was, probably, out of complaifance to this great company that the government agreed to render this law perpetual. Should the custom of weighing gold, however, come to be dif ufed, as it is very likely to be, on account of its inconve niency; fhould the gold coin of England come to be received by tale, as it was before the late recoinage, this great company may, perhaps, find that they have upon this, as upon fome other occafions, mistaken their own interest not a little.

BEFORE the late re-coinage, when the gold currency of England was two per cent. below its ftandard weight, as there was no feignorage, it was two per cent. below the value of that quantity of standard gold bullion which it ought to have contained. When this great company, therefore, bought gold bullion in order to have it coined, they were obliged to pay for it two per cent. more than it was worth after the coinage. But if there had been a feignorage of two per cent, upon the coinage, the common gold currency, though two per cent. below its standard weight, would notwithstanding have been equal in value to the quantity of ftandard gold which it ought to

have contained; the value of the fashion compensating in this cafe the diminution of the weight. They would indeed have had the feignorage to pay, which being two per cent. their lofs upon the whole transaction would have been two per cent. exactly the fame, but no greater than it actually was.

IF the feignorage had been five per cent. and the gold currency only two per cent. below its ftandard weight, the bank would in this cafe have gained three per cent. upon the price of the bullion; but as they would have had a feignorage of five per cent. to pay upon the coinage, their lofs upon the whole tranfaction would, in the fame manner, have been exactly two per cent.

IF the feignorage had been only one per cent. 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 likewise 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 reasonable 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 feignorage, 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 lofe 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 purchaser 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 confumer. When the tax upon coinage, therefore, is fo moderate as not to encourage falfe coining, though

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

or of

A MODERATE feignorage, therefore, would not in any cafe augment the expence of the bank, of the bank, or of any other private perfons who carry the bullion to the mint in order to be coined, and the want of a moderate feignorage does not in any cafe diminish it. Whether there is or is not a feignorage, if the currency contains its full standard weight, the coinage cofts nothing to any body, and if it is fhort of that weight, the coinage muft 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 finall expence, but lofes fome fmall revenue which it might get by a proper duty; and neither the bank nor any other private perfons are in the smallest degree benefited by this ufelefs piece of public generofity.

THE directors of the bank, however, would probably be unwilling to agree to the impofition of a feignorage upon the authority of a fpeculation which promises them no gain, but only pretends to insure them from any lofs. 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 fhould ever go into difufe, as it is very likely to do, and if the gold coin fhould ever fall into the fame ftate of degradation in which it was before the late recoinage, the gain, or more properly the favings 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 almoft entirely, upon it. If this annual coinage had nothing to do but to repair the unavoidable loffes and neceffary 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 ftandard weight, the annual coinage muft, befides this, fill up the large vacuities which exportation and

the

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 feignorage 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 bufinefs both of exportation and of the melting pot. The bank, inftead of lofing every year about two and a half 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, would not probably have incurred the tenth part of that lofs.

per

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 affured, exceed the half of that fum. The faving of fo very small a fum, or even the gaining of another which could not well be much larger, are objects too inconfiderable, it may be thought, to deserve the serious attention of government. But the faving 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 serious attention even of fo great a company as the bank of England.

SOME of the foregoing reasonings and observations might perhaps have been more properly placed in those chapters of the first book which treat of the origin and use 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 thofe vulgar prejudices which have been introduced by the mercantile fyftem; 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 production of money, the very thing which, it fuppofes, conftitutes the wealth of every nation. It is one of its many admirable expedients for enriching the country.

CHAP,

CHAPTER VII.

Of Colonies.

PART FIRST.

Of the motives for establishing new Colonies. THE intereft which occafioned the first fettlement of the different European colonies in America and the West Indies, was not altogether fo plain and diftinct as that which directed the establishment of thofe of antient Greece and Rome.

ALL the different ftates of antient Greece poffeffed, each of them, but a very small territory, and where the people in any one of them multiplied beyond what that territory could easily maintain, a part of them were sent in queft of a new habitation in some remote and distant 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 of the Ionians and Eolians, the two other great tribes of the Greeks, to Afia Minor and the islands of the Egean Sea, of which the inhabitants feem at that time to have been pretty much in the fame ftate as thofe of Sicily and Italy. The mother city, though the confidered the colony as a child, at all times entitled to great favour and affistance, and owing in return much gratitude and refpect, yet confidered it as an emancipated child, over whom the pretended to claim no direct authority or jurifdiction. The colony fettled its own form of government, enacted its own laws, elected its own magiftrates, and made peace or war with its neighbours as an independent ftate, which had no occafion to wait for the approbation or confent of the mother city,Nothing can be more plain and

diftinct