PUBLIC RECORD OFFICE
Reference :-
C.O. 882
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PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE COPYRIGHT PHOTOGRAPH-NOT TO BE REPRODUCED PHOTOGRAPHIC-
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the world, and which, though used as a currency, never cease to have all the ordinary qualities of other commodities as merchandize.
8. It is essential to bear in mind, that in every country where the precious metals are not produced, whatever gold and silver is imported, whether to keep up the circulation, or for any other purpose, must be in return for part of the produce of the country; and that, if, from the nature of the produce or the peculiarity of the country, or the circum- stances connected with the industry of the country, any part of the coin is exported from time to time, it can only be replaced, and always is replaced, as returns through some other channels, in exchange for some part of that produce; and that there is no more difficulty to obtain gold and silver, and to retain them where required, than to obtain rice or grain, and keep them for the use of the island, Adam Smith justly says, "A country which has no mines is no more likely to be exhausted of gold and silver by this annual exportation of those metals, than ours, which does not grow tobacco, by the like annual exportation of that plant. As a country which has wherewithal to buy tobacco will never be long in want of it, so neither will one be long in want of gold and silver that has wherewithal to purchase those metals," I know of no single way in which either the importation or the retention of those metals differ from any other commodity. But some such difference, as we shall hereafter see, has been assumed throughout the reasoning of the witnesses at Mauritius, and is the basis of much of the error into which they have fallen.
9. Whatever the denomination of the coins may be, their actual value must be determined alone by the quantity of the precious metals which they con- tain.
It is no more in the power of a community to affect the intrinsic exchangeable value of their money, by altering its denomination, than it is to change the quantity of wheat contained in a quarter, by altering the name of that measure. Thus, no attempts, whether by the ordinances of a Govern- ment or by the conventions of a community, how- over strictly they may be observed, can alter the real value of a coin, by decreeing any arbitrary rate at which it shall pass; nor can they gain by lessen. ing the quantity or quality of metal in any given
;
The Mauritius
Currency as it is
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soin. In their foreign trade the alteration would be immediately corrected by a rise or a fall, as the case might be, in the exchanges, the par of which between different countries is determined alone by the relative quantities of pure metal contained in the coins of each; so that whatever change is made in those quantities the exchanges immediately accommodate themselves thereto. In their internal trade the correction not less certainly takes place by a change in the prices of commodities, These, if the articles are of foreign origin, are directly influenced by the quantity of pure metal contained in the coin in which the price in expressed; and if of home production, they are indirectly influenced by the same circumstances, and very soon accommodate themselves to any change in the intrinsic value of the coin. The only real influence which such arbitrary interference with the circulation of a country can have, is with regard to existing debts. If the quantity of metal contained
in a coin is diminished, or if an inferior coin in declared to represent a superior value, then all exist- ing debts are paid at a lower actual rate than con- tracted for, to the benefit of the debtor and the disadvantage of the creditor; but as all future debts are contracted at the new rate, no injury or benefit will in future result to any one. A smaller quantity of goods or produce is given for the depre- ciated coin, and the døbt is paid with less silver or gold in proportion; for, in reality, when a man contracts a debt, though it is expressed in money, he undertakes to pay so much gold or silver, as the case may be, and any arrangement by which he pays with less gold or silver than the quantity contracted for, though the nominal amount of money be the same, is simply a fraud.
10. The whole question of currencies, in all their different branches, is therefore very much resolved into specified quantity of the precious metals.
11. With a view of laying a simple and plain foundation for the observations I shall make, and conclusions at which I shall arrive in relation to the Mauritius currency, I will first examine what the coins really coneix of in quantities of precious metala; and what the money in socount, which has no-dochesponding,sain, really represanta.
18. But free, I must make a few general obsar- vations, to clear the way for considerations to which,