Draft of MINT00336 (Mint 19/2/124-5)
Observations upon the state of the Coins of Gold & Silver.
Obs. 1. Standard Gold before sixpence was taken from the Guinea was worth 3£. 19.s 9d per ounce at the Mint, & by taking sixpence from the Guinea became worth 3£ 17s. 11d per ounce. And standard silver is there worth 5s 2d per ounce. But the demand for exportation hath raised both species above the price at the Mint, & thereby hath carried out all the forreign gold the last November, & therefore raised the price of Gold for exportation above the Mint-price before the sixpence was taken from the Guinea. But it never raise to more then 4£. 0.s 6d per ounce. nor kept it long at that price. For in March last forreign gold fell down below the old Mint-price & hath ever since continued below it, being at 3.£ 19.s 6d, & sometimes at 3. 19. 0 & under. And therefore the price of forreign gold for exportation was raised the last winter by some other cause then the taking sixpence from the Guinea. And the price of Gold for exportation to forreign markets having been ever since March below the old Mind-price, that price was certainly too high.
Obs. 2. The price of forreign Gold for exportation answers to the course of Exchange. WHen the Exchange is lowest the price of forreign Gold is highest, & on the contrary. And thence the coinage of Gold hath of late years been greater or less accordingly as the course of Exchange hath been higher or lower. In the years 1714 and 1715 the Exchange was highest, it being (for instance) with Amsterdam from 36 to 37 Skillings; & then the coinage was greatest. In the year 1716 the Exchange was only from 35 to 36 skillings with Amsterdam & proportionally with other places., & the coinage abated accordingly. In the year 1717 the Exchange with Amsterdam was only from 34 to 35.2, & the Coinage abated to one half of what it had been two or three years before. And in this present year the Exchange has been only from 33 10 to 34. 10 till within this fortnight: : & this low course of Exchange together with the taking six pence from the Guinea, hath carried out almost all the Gold imported, & thereby hath had the same good effect for paying our debts abroad in gold & preserving our Silver, which the Bill proposed the last Sessions of Parliament would have had it if had then passed into an Act for stopping the coinage of Gold. Whence those debts arose is difficult to understand without more skill in trade then I can pretend to. But considering that a good part of the gold imported in the years 1713, 1714, 1715 & 1716 was in French money & Ducats, I suspect that after the war with France was at an end great quantities of gold were sent hither to pay for stocks untill the interest of stocks was lowered by Act of Parliament: & since that discouragement some forreigners have been drawing their moneys back with the interest, & some gold has been sent to the Mints in France.
Obs. 3. The course of Exchange was as low in November last before the 6d was taken from the Guinea, as it was afterwards in February last; & both times was at the lowest, being (with Amsterdam) at 33. 10. And therefore the lowness of the Exchange last winter arose, not from the taking six pence from the Guinea, but from the debts which we had abroad before the six-pence was taken off. Which debts, if the coinage of Gold had not been discouraged by taking 6d from the Guinea, might have remained unpaid till they could have been paid with more advantage in silver.
Obs. 4. By the payment of our debts abroad in Gold the demand for exportation hath abated ever since February last, & the exchange hath risen gradually to 35 skillings, & Gold hath been falling down to the Mint-price, & now begins to come to the Mint again. so that within a fortnight so much gold hath come to the Mint as will make above 75000£. And hence I gather that whenever the Exchange with Amsterdam is above 35 skillings it will bring gold to the Mint, & would have brought gold to the Mint in the years 1713, 1714, 1715, 1716 & part of 1717 although the 6d had been taken off before, the Exchange in all those years being above 35 skillings & for the most part above 36. And therefore in all the gold then coined, which was above five millions, the nation would have saved 6d per Guinea had the six pence been taken off before.
Obs. 5. THe demand for exportation hath ever since the taking six pence from the Guinea, raised the price of silver about three times more then the price of Gold, & sometimes four or five times more or above. And therefore the temptation to export gold moneyS hath all this year been three times less then the temptation to export silver moneys. And if this temptation has not sensibly diminished the quantity of oer silver moneys this year it has much less carried away our gold moneys. And therefore all or almost all the gold which has been exported this year, has been in forreign bullion. And by consequence the nation has lost little or nothing by the exportation, because the bullion being forreign went out at the same price that it came in ; at. Foreigners or their Agents who here receive Guineas in payments will lose above 3d per Guinea by exporting them; besides the danger they run by breaking the law.
Obs. 6. Since the demand of silver for exportation hath all this year been three times greater then that of gold, no gold would have been exported this year had it not been for the want of forreign silver: & the exportation thereof hath prevented the exportation of the same value of forreign silver as fast as it could have been procured for paying debts abroad, & in the mean time hath saved the interest of the debts paid off.
Obs. 7. And this exportation hath been a further advantage to the nation by raising the course of exchange from 33. 10 to 35. For when the exchange is low the nation loseth by it so much as it is under the par. And if the debts aborad which have beem paid in gold had continued till they could have been paid in silver, they would have caused the Exchange to continue low.
Obs. 8. And to restore the six pence to the Guinea would be to lose these advantages, & to give more by above nine pence in the Guinea for all the gold which shall be imported hereafter, then it is worth in forreign markets; & to revive the corrupt Trade of exporting silver to buy gold abroad & importing Gold to buy silver at home.
