lation may be the more serviceable money for the time and place; it disappears only because it is worth more as bullion than the coin remaining in circulation.

The mode of operation whereby, contrary to the law of natural displacement, an inferior money may expel a superior money from the circulation, is known as the Gresham law, and is so called because first expounded by Sir Thomas Gresham, who lived in the sixteenth century, and who was the founder of the Royal Exchange of London. The Gresham law would never have been heard of had coin passed by weight only, because in that case the recipient would have taken the coin only at the market value of the precious metal it contained; but when coin became king's money and people were required to accept it by tale at its face value, objection was made to pieces that did not contain the full complement of precious metal; as, however, the king's money was mandatory, it could not be refused so long as his imprint remained upon the coin. The fact that coin could not be refused-whether it contained the full complement of precious metal or not-was practically an invitation to every holder of a coin to abstract some metal from it before passing it, and this was practised to such an extent in England that in course

of time, and by slow degrees, the whole coinage of the realm was reduced to about two-thirds of its standard weight and value.

As nothing is more destructive of industrial prosperity than a money of indefinite value, this continuous mutilation of the coinage finally involved the nation in intolerable distress, and how to restore the coinage to its normal standard was a problem the solution of which long puzzled the people of England. The belief was general that if the full-weight coin were put into circulation, it would of itself, as being a more desirable money, drive the light-weight coin out of use; and this view seemed all the more reasonable in that the people were unanimous in demanding of their government a reformation of the coinage.

But this view did not take into account the natural forces that control the circulation of money, nor did it recognize the personal character of money, and its relationship to the individual; it regarded money only from the public stand-point-as an impersonal agency. As all the transformations and movements of money take place naturally, through individuals acting separately and independently, each one in his own interest, and without any purpose to further a general law, we must recognize this personal and

private interest as the real and only means whereby the coinage could be restored to, and preserved in, its normal integrity. So long as the king's effigy was the important factor, individuals continued to abstract from the coin any metal that could be taken without impairment of the effigy; but if the law were repealed which gave the king's effigy the quality of money, the coin would be taken only at its bullion market value. Each individual, acting for himself, without the least reference to the public interest, would refuse to receive the coin on any other terms, which would at once put a stop to any further debasement of the coinage.

As then there could be no further profit in the clipping and sweating of coin, clipping and sweating would cease; the debased coin at its bullion market value would be as good money intrinsically as that which came fresh from the mint, but as the clipped pieces would be of different values and intrinsically below their nominal value, they could be used in trade only by weighing them. Hence the same individual interest that had formerly led to the debasement of the coinage would now require that the pieces be made of uniform weight and fineness for the greater convenience of counting them and of expressing value.

In thus minutely defining the means by which a debased coinage could be restored, our object is to call especial attention to the fact that the debasement of the money was caused solely by its legaltender quality, and that its restoration and preservation could only be effected by the removal of that cause. Nothing more was needed, because, as soon as the money was deprived of its legal-tender feature, it came under the law of natural displacement, and under this law, it is only the money of superior efficiency that can maintain supremacy in the circulation; whereas, when the artificial quality of legal-tender is given to money, it is always the cheaper money that expels the money of higher value, without the least reference to the efficiency of either.

The English government was finally enabled to restore the coinage by decreeing that clipped coin should pass by weight only, thus virtually repealing its legal-tender quality; but before taking this step the government had confidently expected to accomplish its purpose simply by recoining the mutilated pieces. As the government received the clipped coin at its full nominal value, and as the people were consequently eager to obtain the new money in exchange for their clipped money, it was taken for granted that the coinage could be re-estab

lished within a short time by increasing the output of the mints; and this was accordingly done. Much of the coin in circulation had been minted by hand, with shears and hammer, at earlier dates than the time now referred to, which is 1695-6; these pieces were so rudely formed that the edges could be clipped without detection; but as the new coin was minted with milled edges, to clip it was a more hazardous undertaking, and this strengthened the public confidence that a sound currency would soon be established.

Meantime, the law against clipping was vigorously enforced; counterfeiting had long been punished with the same extreme penalties as treason, and in the reign of Elizabeth the clipping of coin was also made a capital offence. Besides the clipped silver money, there were also in circulation at that time gold pieces issued in the reign of Henry VIII., which had been debased by that monarch to half their nominal value, and it is to this gold coin that Sir Thomas Gresham especially referred in expounding his law, which he did in a letter to Queen Elizabeth, written in the year 1558. Though he explained the practical working of the debased money, showing clearly how it drove the full-weight coin of Elizabeth from the circulation and from the country, he did