Collected Political Writings of James Otis. Otis James
can’t be made merchandize of, and reshipped: But if I send home the same weight in Joannes or other foreign gold, it will yield me a handsome profit, besides the paying the £105, because these being bullion are worth something more to re-export. Silver bullion being somewhat more scarce than gold bullion, if I remit 420 English crowns, it just pays my debt; but if I send the same weight of dollars, it fetches as silver bullion, something more than gold bullion, from the variation of quantity, quality and demand, just as one sort of oil or cod fish, or any other commodity, fetches more than another. And for ought I see, the different prices of our fish and oil abroad, is an argument of the same kind, for altering the standard of our currency, with the varying price of bullion.
The merchant has a right to ship off gold or silver, as he thinks best; and he ought not to be restrained nor can he be; the profits of trade in this province are little enough; I wish they were much greater. The government have nothing to do with furnishing the merchants with a medium; if they are let alone and not burthened with imposts, excises, &c &c. they’ll find themselves a medium; and the province, with all the blessings that attend a flourishing trade, into the bargain.
But it is of great importance that in all governments their currency should be established, and if you have money, both of gold and silver, that they should be in a due proportion. I grant also, that it would be best if this proportion could be the same thro’ the world, but this can’t be. I also grant, for I want to hide nothing, that our gold and silver money, and the sterling gold
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and silver money, are a little disproportionate to the prices of gold and silver bullion in Europe, e.g. If I am in England & have an ounce of silver and an ounce of gold in bullion, and the same quantities in silver and gold coin of the kingdom; the gold in coin is 15 1/5 to the silver, but the gold in bullion is but about 15 to silver. What, does all this prove that gold coin should be lowered? No, but that silver coin is worth more, and if any thing is done should be raised, and this ought to be the case here if any alteration is made, as will appear by what follows. Mr. Locke was for excluding gold from being money or a tender (for they are synonimous). Sir Isaac Newton was not for excluding gold from being money or a tender, but only for lowering it, I shall have more occasion for this observation by and by. Upon Sir Isaac Newton’s report the Guineas were lowered 6d. but the nation was far from finding their account in this, as appears by the following extract from Tindal’s continuation of Rapin’s History of England, vol. 27. p. 132.
“An attempt was made this session to lower the value of Guineas. Mr. Aislabie having taken notice of the great scarcity of the silver coin, occasion’d chiefly by the exportation of silver and importation of gold, proposed, that a speedy remedy might be put to the growing evil, by lowering the value of gold species. Upon this the King was addressed for the representations made by the officers of the mint to the treasury, in relation to the gold and silver coins. Accordingly Mr. Lowndes presented to the house several papers relating to the coins, and particularly Sir Isaac Newton’s representation to the Lords of the treasury. Then Mr. Aislabie renewed his motion, and was seconded by Mr. Caswel, who made a long speech on the various values, which, at different times gold and silver coin have born with respect one with the other, according to the scarcity or plenty of either. He suggested, that the over-valuation of gold, in the current coin of Great Britain, had occasioned the exportation of great quantities of silver species; and to that purpose laid open a clandestine trade, which of late years had been carried on by the Dutch, Hamburghers, and other foreigners, in concert with the Jews and other, traders here, which consisted in exporting silver coin, and importing gold in lieu thereof, which being coined into guineas at the tower, near fifteen pence was got by every guinea, which amounted to about 5 per Cent. and, as these returns might be made five or six times in a year, considerable sums were thereby got, to the prejudice of Great Britain, who thereby was drained of silver, and overstocked with gold; concluding, that, in his opinion, the most effectual way to put a stop to this pernicious trade, was to lower the price of guineas, and all other gold species.
“This speech was received with applause, and an address was voted and presented to the King, for a proclamation to forbid all persons to utter or
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receive guineas at a higher rate than one and twenty shillings for each guinea. Pursuant to this address the proclamation was issued the next day, after which the commons adjourned to the 13th of January.
“The lowering the value of gold, which was thought a proper expedient to procure a greater circulation of silver species, had during the recess a contrary effect, either, as was supposed, through the covetousness of some monied men, who hoarded up silver in hopes that the same would be raised; or out of fear that gold would still be lowered; or through the malice of the disaffected, who, by the same method, thought, if not to distress the government, at least to raise murmuring against it, among the common people, upon account of the stop which was thereby put to petty trade.
“In order therefore to remedy this great evil, as soon as the commons met, they came to a resolution, ‘that this house will not alter the standard of the gold and silver coins of this kingdom, in fineness, weight and denomination; the lords came to the same resolution, and ordered a bill to be brought in, to prevent the melting down of the silver coin.’”
Mr. Postlethwait, speaking of this transaction, says, “Though the reduction of gold was not so natural, perhaps as the raising the value of silver” (or rather giving silver coin the value it had at market) yet it would have equally answered the end (among themselves and without regard to individuals he evidently must mean) of fixing the par necessary between these metals, if the reduction had been great enough. But still it would have been, as in effect it was a disadvantage to England, with regard to foreigners. He demonstrates this loss to be above 100,000 l. only by what foreigners had in the English funds. And by his principles it may be rendered very probable that this province would lose near as much by reducing Johannes from 48s. to 46s. besides the injustice to the debtor and the possessors of gold.
Mr. Postlethwait proposes that Silver should be raised, so as to make the proportion about 15 to one, and then leave gold to find its price in the altercations at market; and yet proposes to have a price fixed to gold by law. I have no objection to the truth of his observation, that if any thing is amiss, silver coin is too low here, and in Europe, in proportion to gold coin, compared to the price of bullion, and that it is most natural silver money should be raised, and not gold money lowered. If any thing, I say this ought to be done in England, and then we might safely follow them.
I should not dare propose it to be done at present if I thought it was right, because a great cry would be soon raised; by the distressed creditor, that we were a going to pay him in names instead of realities, for 3d. a dollar is a reality to a creditor, tho’ some metaphysicians would pretend that 2s. a Johannes is a non-entity to a debtor, and that he would be just as well
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without it as with it, but it is not so easy to perswade people out of their money at present.
They have been long convinced in England of the disproportion between silver and gold coin, or sterling standard if considered as bullion, yet all the alteration that has taken place this century, was the 6d. taken off from the guinea, which they soon repented of. When the english standard is altered ’twill do for us to alter ours, and not before. I am now going to argue in favour of the poor creditors. It is agreed on all hands that we are dependent upon England, and therefore it would be strange for us to undertake to set a proportion between our money of gold and silver different from theirs, but if we were independent, as ninety nine parts of our trade in a hundred is with them, and a balance greatly against us, according to Mr. Belloni, our money system regulated according to the true proportion of bullion would only hurry both gold and silver away the faster. See Sav. Dic. Com. v. Coin.
Gold bullion in England, is raised as well as silver since 1749. Handsome profits have been made by shipping silver, and when that is gone a considerable one may be made of Gold. A Johannes that in 1749 would fetch but 36s. will now fetch 37s. 9d. This has appeared as paradoxical to some; but the truth is, that bullion