Draft of MINT00336 (Mint 19/2/124-5)

<127r>

Observations upon the state of the Coins of Gold & Silver.     <text in Unknown Hand begins>writt in the year. 1718.

<text in Isaac Newton’s hand begins>Obs. 1. Standerd Gold before six pence was taken from the Guinea was worth 2£. 19.5 9d$\frac{\mathrm{1}}{\mathrm{4}}$ per ounce at the Mint & by the 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 silver for many years & began to carry out some of 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 raised it to more then 4£. os. 6d per ounce: And therefore the taking 6d from the Guinea has made little or no alteration in the price of forreign Gold for exportation. And the price of forreign silver for exportation has been much the same this year as it used to be in former years with respect to the course of exchange.

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 has of late years been greater or less accordingly as the course of Exchange has been higher or lower. In the years 1714 & 1715 the Exchange was highest, it being with Amsterdam from 36 to 37 skillings, & then the coinage was greatest. In the year 1716 the Exchange was only from 35 to 36, & the coinage abated accordingly. In the year 1717 the exchange 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 yeare the Exchange has been only from 33. 10 to 34. 10. And this low course of Exchange together with the taking six pence from the Guinea has carried out almost all the Gold imported, & thereby has 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 if it 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 was 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.

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 sixpence 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 <128r> not been discouraged by taking six pence from the Guinea, might have remained till they could have been paid with more advantage in silver.

Obs. 4. By the payment of oer debts abroad in gold the demand for exportation has abated ever since February last, & the exchange has risen gradually to 35 skillings, & Gold has been falling down to the Mint price, & now begings to come to the Mint again. 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 six pence had been taken off before, & thereby have saved six pence per Guinea in all the gold coined in those years which was above five millions, the Exchange in all those years being above 35 skil. & for the most part above 36.

Obs. 5. The demand for exportation hath ever since the taking 6d from the Guinea, raised the price of silver about three 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 our silver moneys it has much less carried away our gold moneys. And therefore all or almost all th egold 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, but has saved the interest of the debts paid off.

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 had it not been for the want of silver bullion: & the exportation thereof has prevented the exportation of the same value of silver as fast as it could have been procured for paying debts abroad.

Obs. 7. And this exportation has 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 loses by it so much as it is under the par. And if the debts abroad which have been 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 now to restore the six pence to the Guinea would be to lose these advantages, & to give more for all the Gold which shall be coined hereafter, by above nine pence in the Guinea, 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.

The way for England to thrive by her Trade is to keep her moneys to the value put upon gold & silver in forreign markets & to take all possible care that her exports exceed her imports especially in perishable commodities, & for that end to encourage her manufactures & discourage luxury.