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21st Cong. 1st Sess.]
Annual Treasury Report.
[SEN. AND H. of REPs.
tion; in the allowances to persons instructed to investigate transactions of Custom Houses and Land Offices; to assistant counsel, and for costs in suits and prosecutions; and for various services of less magnitude. The payments for these objects are usually made by Collectors and Receivers of Public Moneys, or by drafts on them from the Treasury Department; being considered as ineidental to these branches of revenue. It is desirable that all such payments should be as specifically sanctioned by law as those made out of moneys in the Trea. sury. The Secretary of the Treasury deems it proper to make known to Congress, that the duties imposed upon woollen goods, under the act of the 19th May, 1828, have, in pur. suance of an instruction from the Treasury Department, dated the 15th of October, 1828, been charged upon the value of such goods,'without the addition of 20 percentum on the cost of those or. from the Cape of Good Hope, or any place beyond the same, or from beyond Cape Horn, : 10 per centum on those from any other place or couny. The law, it is believed, may admit of a different constraetion; but, as the orders for the importations, since the instruction above referred to, were given with a knowledge of its operation, now to add the 20 or the 10 per cent to the cost of such goods, would probably transfer the whole of them into a class higher than was fairly contemplated by the importer, and increase the duty very prejudicially to his interest. Under these circumstances, and as there may be some doubt as to the intention of the law, it has been deemed proper not to disturb the existing construction, but to submit the matter to the consideration of Congress. Another subject somewhat singular in character, has been, for special reasons, differently disposed of. A deduction of five per cent on the invoices of broadcloths, for measurement, has become an established usage of trade. This usage was particularly noticed in an instruc. tion issued by the Treasury Department, on the 9th September, 1828, but which had been differently construed by the Custom-house Officers at different ports: at some, the deduction having been made from the measurement, and at others from the cost; by which different rates of duties were imposed. It was deemed not only a legal, but constitutional obligation, so far as the powers wested in the Department would admit, to render the duty uniform throughout the United States. In preparing the necessary regulations for this purpose, it was considered that the five per cent deduction was originally intended, as it purports to be, on “measurement,” and not on price. This basis was also recommended by another if more important consideration, viz: the uniformity of its effect. The allowance being made for measurement, the merchant pays duty on the number of yards purporting to be imported; but, if made on price, it is nugatory, except the cloths are thereby transferred from a higher to a lower class, in which case it diminishes the duty by the amount of the difference between the duties charged on such classes. An instruction was accordingly issued on the 8th of August, 1829, directing the allowance of the five per cent to be made on the measurement only. But this unavoidably deprived a number of importers, whose orders had been previously given, of the expected benefit of the deduc. tion, in determining the classes of dutiable prices to which their cloths belonged; such cloths are consequently subjected to a rate of duty higher than was contemplated when the orders were given. The regulation has, therefore, injuriously affected the interest of these importers, and their ease is submitted to the favorable consideration of Congress, who alone can give the proper relief. The Secretary of the Treasury respectfully invites the attention of Congress to some modification of the
existing revenue laws, as well for the convenience of those employed in commerce and navigation, as for the better security of the revenue. The law in relation to licenses for coasting and fishing vessels, operates unequally and injuriously upon some branches of that business; it requires, upon every change of structure of the vessel, or . ownership, by the transfer of the right of one partner, the taking out of a new license, and the payment of a new duty. The bounty allowed on vessels employed in the cod fisheries is understood to be unlawfully obtained by some of those engaged in the mackerel fisheries. It is believed that a bounty on the fish cured or exported, without reference to the origin of the salt, would better promote whatever encouragement may be considered as proper to be given to the fisheries; this could be graduated to any scale, and, being more simple in its form, would be less liable to abuse. It is found that the present mode of compensating Custom House officers operates unequally, and not in Pro. portion to the service rendered. As striking instances of this inequality, Inspectors, in many places, receive more than double the compensation of the Collectors who employ them; and, at some ports, Custom Houses are built, or purchased by the Government, while at others, they are provided at the expense of Collectors. The fees of office are liable to be variously computed, and are a constant source of embarrassment in the transaction of business. These, it is believed, may be generally abolished, and the mode of compensation by salary beneficially substituted; retaining, however, those, on manifests, clearances, entries, and permits, and that class of service which makes it the interest of the officers to require a strict observance of those acts on the part of mas: ters of vessels, and shippers, which may be deemed essential to the security of the revenue. The commissions now allowed to Collectors on bonds put in suit might be advantageously divided between them, and the District Attorneys. The former would thereby be more interested in taking proper security, and the latter have a salutary stimulus to the discharge of their duties. Some additional provision of law is deemed necessary to compel the surrender of public books and papers of District Attorneys, Marshals, Custom-house and Land officers, in pursuance of orders from the proper department. The labors of the appraisers of imported goods have been greatly increased to: “act in alteration of the several acts imposing duties on imports,” passed 19th May, 1828. To give the proper efficiency to that braneh of service, it is necessary to have warehouses and offices, conveniently *: for the examination, measuring, and repacking of goods; and that the persons em. ployed by appraisers should be more immediately under their control. In the port of New York, where nearly half the importations into the United States are made, the whole labor of appraising devolves on two officers, who are exclusively responsible for that duty; and yet, all the assistance which can be provided for them is supplied indirectly, and under an implied power. To avoid the embarrassment that must arise from sickness, or other necessary absence of one or both of these officers, an additional appraiser at that port seems indispensable. It is also deemed advisable that the commissioned appraisers at all the ports should be authorized, under proper restrictions, to employ persons to act as assistants, under regular official responsibility; these being distributed upon the different classes of business, could not fail to increase the power of the appraisers for an efficient and faithful performance of their duties, and without any material increase of expense. The present system of storing goods for debenture, or in security for duties, may, it is believed, be beneficially SEN. AND H. of REPs.]
modified. Goods are now stored under various circumstances. • 1st Teas may, at the option of the importer, and at his nse, be stored under the direction of the Custom-house officers, in security for the duties, for two years. 2d. Wine and spirits may be stored, in like manner, for one year. 8d. All other goods may be stored, in like manner, for the term of credit on the duties respectively. 4th., Wines and Spirits, to be entitled to drawback, must be deposited in a public store, and there remain, from their landing, until shipment: or, on being transPorted coastwise, may be again stored or shipped. 5th. Goods, irregularly imported, are stored until they can be disposed according to law. Private stores are usually rented for these purposes by the Collectors; but the facility of access to such buildings renders the security of little avail: and that abuses have not more frequently occurred, is attributable much more to the integrity of the merchants than the efficacy of the system. The remedy proposed, is to erect warehouses, at the public expense, at the principal ports, for all the permanent objects connected with this branch of service; to be so situated and constructed as to be conveniently guarded, and rendered inaecessible except by permission of officers in charge. This being done, the warehouse system may be extended to all goods entered for drawback, and the right of debenture continued as long as they remain in store. There can be no doubt that a moderate charge for storage would remunerate the Government for the expenditure, while the revenue would be rendered more secure, and the interests of navigation essentially promoted. * The intercourse between the United States and adja: cent foreign territories requires some special regulation, as well for the convenience of the officers of the customs as of travellers, and also for the better security of the revenue. Persons transiently coming into the United States on business, and returning, are obliged to pay duty for the horses and vehicles employed, without benefit of drawback. Ferry-boats, having foreign goods on board, are required by law to enter and pay fees upon every trip across a boundary water. It is also desirable that United States' vessels, of whatever burden, laden with foreign goods, passing on those waters, should be subject to the same regulations that are now imposed on coasting vessels, passing from one district to another, not in an adjoining State. It may, however, be doubted, whether any regulation short of a total prohibition of the importation of goods, not the growth or product of the Territories contiguous to the United States, and of their transportation upon the boundary waters in vessels of the United States, without accompanying evidence of the duties having been paid, will effectually prevent illicit importations from those countries. The laws in relation to the coasting trade do not afford the necessary means for preventing the unlawful introduction of foreign goods through that channel. The United States are divided into three great districts: 1st, From their eastern limits to the southern limits of Georgia. 2d, From the southern limits of Georgia to the Perdido River. 8d, From the Perdido River to the western limits of the United States. Masters of vessels, licensed for carrying on the coasting trade, may now with a given amount of cargo, pass from one port to another, within either of these districts, or to a port in an adjoining State, without delivering a manifest or obtaining a permit previous to their departure, and without making any report on entering their vessel at the port of destination; nor does the law require any evidence, except the oath of the master in certain cases, of duties having been paid on foreign goods transported from one port to another, except by a defective provision as to
Wine, Spirits, and Teas, and goods entitled to drawback. It is apparent, from these facts, that very great facilities are given for illicit trade. If a single port can be found, where, through the negligence of the officers of the customs, or other cause, goods can be thus introduced, there is no sufficient obstacle to their being transported by water, to another and a better market. The mere power to board a coasting vessel, and demand her manifest, without any obligation on the master, to report her to the Collector, is wholly insufficient for proper security against frauds, and especially in those ports where an extensive coasting and foreign navigation is carried on. There is also a feature in the law, in relation to the seizure of goods suspected to have been smuggled, which, it is believed, may be beneficially modified. These goods are usually seized in small quantities; the owners, perhaps, escape, or no one appears to claim them, and yet the goods cannot be sold until libelled, and condemned in a court of the United States; the costs attending which, frequently amount to more than the proceeds of the articles, when sold. The officer not only loses his reward, but the United States are subjected to costs, and what was intended as an inducement to vigilance, becomes worse than nugatory. This might be remedied by authorizing the sale, without condemnation, of such goods as may be unclaimed, after a reasonable notice. An additional and salutary stimulus may also be given to the acti. vity of Revenue Officers by authorizing a relinquishment to them, of a portion of the proceeds of forfeited goods, which may accrue to the Government. The sum thus relinquished would probably be much more than repaid, in the increased security of the revenue, arising from the incitement to greater vigilance. The power to search for, and seize goods found on land, requires to be enlarged, and better defined. To avoid unnecessary vexation, the exercise of the power might be limited to a reasonable distance from the eoast, navigable rivers, canals, or the interior border. It is known that considerable exertions are making for introducing goods into the United States, in violation of the revenue laws: and the Secretary of the Treasury finds himself compelled to invite the special attention of Congress, to the adoption of such measures, as may be calculated to prevent an evil, not less dangerous to the morals of those exposed to the temptation, than injurious to the interests of the Nation. Every measure intended for this object will unavoidably subject the fair trader to some inconvenience; but this should be considered more than counterbalanced, by the protection it affords against the ruinous competition of those, who can only be restrained by efficient laws, rigorously executed. The present credit system, it is believed, may be materially improved. If the purchaser of goods, or any other person than the importer, could be lawfully substituted, as the principal on Custom house bonds, in all cases where the importer was not indebted on bonds due and unpaid, the security of these debts might be i. increased. st would, in such case, depend on the solvency of a class of merchants exposed to |. hazard in their business, besides being divided among a greater number. The credits now allowed are also unnecessarily complicated. The long credits on teas have been a source of heavy loss to the revenue, and consequently injurious to the interests they were intended to promote. Experience has proved, that, by furnishing an opportunity for, they stimulate adventurous speculation, not less ruinous to those connected with them, than prejudicial to the Government. The terms of payment for duties, now presented by law, are as follows: All sums not exceeding fifty dollars, are payable in cash; all sums exceeding fifty dollars, for duties on the produce of the West Indies, (except salt.) or places north of the equator, and situate on the eastern shores of America, or 21st CoNG, 1st Sess.]
Annual Treasury Report.
[SEN, AND H. of REPs.
its adjacent seas, bays, and gulfs, one half in 6 months, one half in 9 months: On salt, 9 months: On wines 12 months: On all goods imported from Europe, (other than wines, salt, and teas,) one third in 8 months, one third in 10 months, and one third in 12 months: On all goods, (other than wines, salt, and teas,) imported from any other place than Europe and the West Indies, one third in 8 months, one third in 10 months, and one third in 18 months: On teas imported from China or Europe, stored as security for duties, a credit of two years is allowed. ... When delivered for consumption, the duties, not exceeding one hundred dollars, on a credit of four inonths with security; if over one hundred dollars, and not exceeding five hundred dollars, eight months; over five hundred dollars, twelve months; the credit not in any case to extend beyond the two years allowed on deposite of the teas. On wines and spirits, stored as security for duties, the same credit, on delivery, as if not stored : not to exceed twelve months. The term of six, nine, and twelve months, might be adopted as a fair average of existing credits. A change, if introduced prospectively, could not be sensibly felt in the price of any article of importation; and the reduction of the duties on teas, and some other importations from countries south of the equator, if that be thought advisable, would contract the effect of a shortened credit upon the interests of navigation in that region. The average proposed somewhat increases the length of the credits on importations from the West Indies, Upon this point it may be observed, that the profits of the West India trade, being reduced to their minimum, every proper facility given to it, could not but be felt in the agriculture, as well as the commerce and navigation of the United States; those colonies being almost the only market for many of the staple products of several of the States. The same object may be further promoted, by the reduction of duties on coffee, spices, and some other products of these Islands. It is also worthy of consideration, whether any modification of the revenue system, with a view to improve the West India trade, might not, with advantage, be arranged in such manner, as to give a preference to the productions of those colonies into which American navigation is permitted. The effects of a change in the credit system, and of a reduction of duties, upon the various interests of the na: tion, other than revenue, are suggested as incidental considerations, which, though they might not be deemed of such a character as to justify a revision of the revenue laws, yet cannot safely be overlooked in a modification called for by other indispensable objects. It may be roper, however, in all measures of this nature, to keep in view, that the money power of the Government, whether exerted in the imposition, distribution, or reduction of taxes, or in the disbursement of the public treasure, requires to be exercised with the most guarded and steady purpose of uniting absolute and relative justice in the same point. Whatever propels an undue portion of capital into one pursuit, must tend, where capital is o sooner or later to overcharge it, and lessen the profits. The same operation will cause at least a relative increase in the profits of other pursuits from which capital has been withdrawn. The application of the money power of the Government to regulate the unequal action caused by such, or any other changes in human economy, is, in its nature, incapable of precise and certain adaptation to its end; hence, the necessity for care and moderation in all measures of this character. Every mistake must increase the irregularities iutended to be remedied,
and interrupt and disturb that gradual growth which best promotes and secures substantial prosperity. So injurious are great and sudden fluctuations in human employments, that it has been even doubted whether the inventive genius of man, in the development of means for saving labor, and multiplying mechanical power, has not proved rather an evil than a benefit. A close observance of this operation will, however, demonstrate that, what. ever there may be of evil in it, arises only from the suddenness of the change. Employments essential to the support of many, have been superseded so suddenly as to leave them dependent on the charities of those who may have profited by the event; this would not have oecurred had the process been graduated as to time, more conformably to the habits and conditions of those liable to be affected by it. The employments thus superseded, will, however, scarcely be known to, or needed by, the next generation; others will take their place, and those who cannot enter upon new pursuits, though without hope for themselves, may yet be consoled with a better prospect for posterity. It may not be unprofitable to observe, that a total revolution is taking place in many of the productive employments throughout the civilized world. The improvements in science and arts, no longer interrupted by war, have been directed to other objects, and have so increased the power of production that the tide of prices, which had been long on the flood, is gradually ebbing, even under a depreciated currency. The relative values between labor and products have also changed, but are not yet adjusted. The depression of prices, falling unequally on the different species of property, is ruinous to many, and repugnant to the feelings even of those who do not really suffer. It may be long before a proper adjustment of these values removes the evil; and until then, the busy world will be agitated by the convulsive struggles of its various interests, each to avert from itself, and throw upon others the impending adversity. The ramifications of these connecting and conflicting operations are so complicated, that it may be doubted whether any degree of intelligence, however free from the influence of special interests, could, by the exercise of its political power, materially lessen the evil. The active energies of man, stimulated by neces. sity, emulation, and love of wealth, are perhaps the agents most to be relied upon, in maintaining a salutary equilibrium in the various operations of human enterprise. Every new disposition, therefore, of the money power, to be safe, should be gradual, and requires great caution to avoid increasing the unequal and irregular action which is so obviously prejudicial, both to individual and public welfare. Whatever objects may, in the wisdom of the Government, be found for the application of surplus revenue, after the public debt shall be paid, there will probably remain a considerable amount, which may be dispensed with, by a reduction of the import duties, without prejudice to any branch of domestic industry. Such a reduction will present, a favorable opportunity for averting a portion of the evil resulting from the general depression in the price of property before referred to. The repeal of a tax is similar in its effects to the relinquishment of so much annual debt; relieving, to that amount, the various species of labor upon which it was charged, and distributing its benefits, in proportion to consumption, upon every individual of the nation. The extinguishment of the public debt tends to the same result in another way. The interest is now paid to capitalists, out of the profits of labor; not only will this labor be released from the burden, but the capital thus thrown out of an unproductive, will seek a productive employment; giving thereby a new impetus to enter. prise, in agriculture, the arts, commerce, and navigation, at a lower charge for interest than before. The heavy SENATE.]
On the Current Coins.
[21st CoNG. 1st SEss.
impositions on the labor employed in these pursuits, in those nations where the arts have attained their highest i.". had become in a great measure counterbalanced, in latter years, by the increased capacity of that labor; but these burthens still remain, and with † little prospect of diminution. In the mean time, the industry of the United States will have a positive advantage over that of other countries, equal to the difference between their respective rates of taxation; and it is worthy of consideration, that there has been probably no period, in which such an opportunity for advancing the general economy of the American People, and aiding them to maintain a successful competition with that of other countries, could have been more propitious, or more necessary to their interests, than that which is now approaching. It is known that the most unexampled exertions are making in all civilized nations, to increase the productive power; and those who shall stand foremost in this laudable strife, will be assured of success in maintaining, not merely the prosperity of their People, but a high rank among the family of nations. k. All which is respectfully submitted. S. D. INGHAM, Secretary of the Treasury. THEAsURY DEPARTMENT, Dec. 14, 1829,
REPORT ON THE CURRENT COINS, • Made to the Senate of the United States, Jan. 11, 1830.
Mr. SANFORD, from the Select Committee appointed to consider the state of the current coins, and to report such amendments of the existing laws concerning coins, as may be deemed expedient, made the following Report:
The law of the second day of April, 1792, establishing the Mint, and directing, coins of gold, silver and copper, expressly enacts, that the gold and silver coins shall be a legal tender, in all payments; but it is not declared by that law, or by any express enactment, that our copper coins shall be legal money. The currency of all other copper coins is expressly prohibited by the law of the 8th day of May, 1792. It is, and from the first institution of our coins has been, an uncertain question, whether a debtor ean compel his ereditor to receive payment in cents or half cents. A discussion of this question, as it now stands upon the existing laws, is here unnecessary. Our copper coins are either legal money, or they are not. If they are a legal tender, they are so without limitation of amount; and any debt, however great, may be dis; charged in cents and half cents. If they are not a legal tender, they are not so in any case, or for the smallest sum ; and we have no legal money for very small payments. Both branches of this alternative are unfit; and neither of them should be law. The coins of copper are altogether unsuitable for payment of large sums; they are not necessary for payments which may be made by coins of silver or gold; and their peculiar destination is, to make those small payments which cannot be made by coins of higher value. The copper coins should, therefore, be confined to their proper province; and within that sphere they should be legal for all purposes of money. * It is proposed that the amount for which the copper coins shall be a legal tender shall be ten cents. A sum greater than ten cents would be inconvenient: and though five cents may be paid in silver by a half dime, and ten cents by a dime, or two half dimes, yet it is convenient that the debtor should also be able to pay these small sums in the copper coins. The sum of ten cents, as a rule for this purpose, seems to adjust, reasonably, the question of convenience between creditor and debt
or; and this regulation, while it will afford entire faci
lity to small and exact payments, will prevent the abuse of burthening creditors, with an inconvenient amount of these coins. When our copper coins shall be thus confined to very small payments, the objection often made, that they are too heavy for the purpose of money, will have little force. All our silver coins are now, indiscriminately, legal money for all payments; and any debt, however large, may be discharged in the small coins of this metal. The design of a system which employs gold, silver, and copper as money, is, that the several metals' should be used for the respective offices to which each of them is peculiarly adapted; that gold should be used chiefly for large payments; that payments which are neither very great nor very small, should be made in silver; and that copper should serve only for payment of very small sums. The object of different coins of the same metal is, that the smaller coins should be used to pay the small sums which they express. All these are objects of real and great convenience. But when small coins, so convenient for small and exact payments, are used to discharge large debts, their inconvenience is manifest. All the coins offered in payment, must be counted; every piece must be examined, at least, by inspection; and the labor of effecting a payment is nearly in proportion to the number of pieces used for that purpose. To abridge this labor, large coins are necessary; and public convenience requires, that such coins should be used in payment of large sums. Our various coins are well adapted to these different ends; but we have hitherto made no discrimination between our different coins, in respect to their use in payments. We have four silver coins less than a dollar; and we allow to the debtor the option to pay either gold or silver coins. It is not expedient that he should also have the option to pay, a large debt in these small coins of silver. Where all the coins are equally applicable to all payments, the community seldom enjoy, to a convenient extent, the use of the larger coins. Large coins are withdrawn from circulation sooner, and more frequently, than smaller pieces. The coins most convenient to the manufacturer, to the merchant, who exports coins, and to all who deal in the precious metals as merchandize, are the pieces which contain the greatest quantity of metal. All these persons select large coins for their purposes, in preference to small pieces; and where the same quantity of metal may be obtained either in large pieces or small coins, the greater convenience of large pieces for the uses to which coins are applied by these persons, is, alone, a decisive reason for this preference. Another cause concurring with this convenience, operates, powerfully, to withdraw large coins from currency. Circulating coins are never entirely uniform in weight. Small coins lose a greater proportion of weight than large coins, by circulation; and where the different coins have been in use during the same period, large coins are less diminished in weight and intrinsic value. The merchant or the manufacturer who selects large pieces instead of small coins, not only finds the large pieces more convenient, but he generally finds, also, a considerable gain in the quantity of metal which he obtains by this preference. This disproportion is, moreover, a direct inducement to convert large coins into bullion. As the diminution of small coins is often much greater than that of large coins, the larger pieces are converted into bullion, for the gain which this operation affords: these conversions are extensive, in proportion as they are profitable; and are profitable, according to the degree of disproportion of weight between large coins and small pieces. Motives of convenience, and motives of profit, thus co-operate to the same result; and demands for gold or silver, which fall upon the coins, are satisfied from the largest pieces 21st Cong. 1st Sess.]
On the Current Coins.
which can be procured. The larger coins constantly depart from circulation, while the smaller coins remain; and it is often found, that nearly all the coins remaining in use consist of the minor pieces. The large coins which are converted into bullion, exported from the country, or used in manufactures, are the coins which are most convenient to the whole community, when large sums are to be paid and received; and the public interest is, that a considerable portion of the current coins should be those which are adapted to the object of paying large sums with facility. A due portion of large coins should therefore, not only be issued, but also be retained in circulation. This end is to be attained only by rendering such coins necessary for the large payments to which they are adapted. As a regulation in this respect, it is proposed that the silver coins less than a dollar, shall not be a legal tender for any sum exeeding ten dollars. The sum proposed for this purpose, by Mr. Lowndes, in a report made in the House of Representatives, on the twenty-sixth day" of January 1819, was five dollars; but this sum seems too low. If a new system were now to be instituted, or if all our different coins were in circulation, in due proportion to each other, the sum of five dollars might be taken as the convenient rule, in this particular. In the actual state of our coins, the sum of ten dollars appears preferable; and this sum will sufficiently guard creditors against the inconvenience of receiving large payments in small silver coins. The sixteenth section of the act of the second day of April, 1792, is in these words: “All the gold and silver “coins which shall have been struck at, and issued from “the said mint, shall be a lawful tender in all payments “whatsoever; those of full weight, according to the “respective values hereinbefore declared, and those of “less than full weight, at values proportional to their “respective weights.” The legal value of our coins of gold and silver, thus depends on their actual weight. This regulation involves the inconvenience, that our coins must be actually weighed, when weighing is required; but this inconvenience cannot be j without incurring a greater evil. Coins unequal in weight and intrinsic value, but bearing the same legal value, are a source of grievous disorder and injustice; and all coins, however uniform in weight, when they leave the mint, afterwards become reduced and unequal in intrinsic value. ...Our system, therefore, prescribes the weights which shall be given to our coins by the mint, and their legal values when they have those weights; and direct, that coins of less than full weight, shall have legal values, according to their actual weights. The currency of our gold and silver coins, by mere tale, is neither enforced nor prohibited ; but is left to take place, according to convenience and consent. But in enacting the principle, that the value shall be controlled by the weight, universal terms have been used, by which all our gold and silver coins, however diminished in weight, are made legal money, and in this respect, a restriction is necessary. The smallest and lightest remnant of a coin, is now legal money, equally with a perfect piece of a full weight; and it is in the option of a debtor, to discharge his debt, either in coins of full weight, or in those which are diminished to any inferior weight. Coins which must be weighed to ascertain their value, are very inconvenient money. When coins, manifestly much diminished, are offered in payment, the creditor must, in justice to himself, require that they shall be actually weighed; and weighing must be followed by the calculations requisite to convert weights into pecuniary values. These proceedings are exceedingly troublesome. Coins should, indeed, be liable to examination of their actual weight, as the ultimate and controlling test of
their value; but, to be entirely convenient, they should require only to be counted : and when weight becomes the necessary, or ordinary test of the value of coins, much of their convenience is lost. When actual weighing decides that coins are greatly diminished, it decides that they are no longer fit for convenient use. Coins so inferior in usefulness, cannot be justly ranked with those which being of full weight, or slightly reduced, afford the great convenience of a currency by tale. While a coin retains the stamp of the mint, that impression certifies the denomination of the piece, and the uality of the metal. ...When coins are so worn, that 3. inscriptions and distinctive marks are effaced, they have lost the character which they received from the mint; and without that manifest character, they are not coined money. When a piece is so reduced, that its appeareance does not indicate whether it is of one denomination or another, or whether it is of the national mint, or of foreign coinage, its purity and weight are uncertain : and it wants the qualities of money. That coins reduced to disks of smooth metal, should be legal money, is quite too inconvenient; and it is unnecessary that they should be so, where the public mint is always ready to convert them into perfect pieces. All such coins are unfit for circulation by tale; and their compulsory currency, by weight, is an inconvenience to which the community ought not to be subiected. J The o of diminished coins has a powerful tendency to expel perfect coins from circulation. . In every society where coins are used, they are treated very differently, by two classes of persons. One class, compris. ing far the greater number, pay and receive coins, without regard to their actual weight; and the great circulation of the community takes place, by mere tale. Ano: ther class consists of persons who, in various ways, deal in the precious metals as merchandise; and this class traffic in coins, according to their actual weight and intrinsic value. While an immense majority of the society are incessantly circulating diminished coins, as equivalent to those of full weight, dealers in gold and silver are constantly making the discrimination which is not made by others; and their business is to derive profit from these disparities. While others circulate by tale, they ascertain the value of coins by weight. They receive coins of full weight, and pay those of reduced weight ; they exchange diminished coins for coins of full weight; and the constant commerce of the society renders these substitutions easy and endless. When a diminished coiu has been used to obtain a coin of full weight, for gain, the coin of full weight circulates no more. It is converted into bullion or treated as bullion; and is exported, or used in manufactures, as bullion is wanted for either of these objects. While the weight of coins is incessantly reduced by the friction of ordinary use, this is not the sole cause of their diminution. Coins are easily reduced to any inferior weight, by artificial means. Various processes, some of which are denominated filing, clipping, boring, scaling, and sweating, are employed to substract from coins of full weight, a portion of their metal. The coins so reduced, are put into circulation by tale; and the value of the metal withdrawn, is gained by those who perform these operations. These practices are forbidden by law ; but as they are, or may be secret, they cannot be repressed. Ordinary use and artificial reductions thus co-operate to diminish the weight of coius: and new aliment is con: stantly given to the business of procuring coins of full weight by means of those which are lighter. But these exchanges are not limited to the acquisition of coins of full weight. When all the coins are below full weight, they still, to a great extent, circulate by tale. But some