British Coinage and the Gold Standard

In: Social Issues

Submitted By blaine
Words 803
Pages 4
In Sixteenth-and seventeenth-century, the precious metals - silver was assigned as standard currencies by British government. The value of the coins was reflected by the bullion value that was the radio of the metal content to denomination. However, the England silver coinage were threatened by some unethical individuals and governments’ actions that physically alternated, debased, devalued, or revalued it. (Black, Module 4, Topic 4.4).
The manual minted sliver coins at the time were often irregular in size and shape. Besides, after periods of usage, the old sliver coins were naturally worn and torn which normally had thinner edges. The bullion content of these coins became less weight than legal coins. Some unscrupulous speculators took a chance that deliberately minted with short-weight bullion content, or physically clipping or filling little segments of precious metals from the proper coins. The silver chips would be collected and illegally melted by individuals, then smuggled to the foreign countries. “When the debased money was circulating along the legal coins, the latter will tend to be exported, leaving only the inferior money in the circulation.” Gresham described these unethical practices as “bad money drives out good”. (Black, Module 4, Topic 4.4)
Because the clipped coins were not liable to the public, it was habitually accepted only for less than their stamped value. On the other hand, people tended to use these suspicious coins to pay taxes. Oppositely, the British government was eager to raise funds for the war against France. With these double results, the British government was advised by William Lowndes to cry up the value of the money in order to discharge large debts with a small sum. The revaluation could be reversed when the war ended which would cry down to receive more revenue from the tax payers. (Black, Module 4, Topic 4.4)
Once the…...

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