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<p>[QUOTE=&quot;EWC3, post: 4577411, member: 93416&quot;]Yes – of course that is true. But it does not really get to first base about the technicalities of pre-Keynsian coin issue. Let me sketch my opinion about all this</p><p><br /></p><p>Medieval European practice seem to be inspired by the reforms carried out at Damascus in 77-78H (c. 697-8 AD) It seems to fix gold and silver coin at 15/16 against bullion – thus 1/16th seigniorage (= state profit + making costs).</p><p><br /></p><p>In Europe the weight calculations seem to have the same basis – but varied from very low at the centre at Venice (roughly 2%) to higher at the periphery in England (1/16th by weight plus 1/16th by debasement thus 1/8 overall - that around 12th century or so).</p><p><br /></p><p>By the mid 17th century seigniorage seems to be lower in England – perhaps only 3.5%. However there was a parliamentary campaign to abolish it altogether – and this happened in principle in 1666 and in practice in 1696 - with the re-coinage.</p><p><br /></p><p>The people in parliament pushing for the abolition of seigniorage claimed that charging zero seigniorage would make English domestic coinage an international currency – and foreigners would flock to the mint bringing silver to coin for free – boosting English trade.</p><p><br /></p><p>What actually happened after it was put into practice in 1696 was a huge amount of silver was taken out of England cost free by the king for continental wars, and another huge amount was taken by the East India company cost free to spend on overseas trade. By 1725 markets were struggling to operate due to lack of small change. By around 1750 the mint stopped minting silver altogether. Shop trade was replacing market trade – (markets sold goods cheap on paid and quit terms – but shops sold on credit at higher prices) – in part because there was no small change to facilitate paid and quit transaction. The mint was only making gold guineas.</p><p><br /></p><p>Alexander del Mar called this a monetary crime. He claimed that the merchant faction within parliament had planned this all along – to strip cash out of the country – and push the bulk of the population into cashless transactions carried out on the books within shops – at inflated prices. Adam Smith was more circumspect. He pointed to the fact that France still maintained 8% seigniorage on coin and thus still retained a domestic silver currency. He scoffed at the English treasury without going into further details – but his views were clearly close to what del Mar chose to call “a monetary crime”.</p><p><br /></p><p>You can get a much more detailed account of all this here</p><p><br /></p><p><a href="https://www.academia.edu/33034920/Maria_Graham_and_the_Problem_of_Small_Change" target="_blank" class="externalLink ProxyLink" data-proxy-href="https://www.academia.edu/33034920/Maria_Graham_and_the_Problem_of_Small_Change" rel="nofollow">https://www.academia.edu/33034920/Maria_Graham_and_the_Problem_of_Small_Change</a></p><p><br /></p><p>Footnote 1 will tell you who amongst the elderly members of the British Numismatic community approved publication in NC.</p><p><br /></p><p>Many thanks to you personally for approaching this matter in a dispassionate matter. Over the course of my lifetime I have watched people from academic archaeology and economics encroaching upon numismatic studies. Time and time again these people scoff at me – imagining that I do not understand the past. Well, I am rather sure that its more the other way round. And if its me that is being lead by the nose – I am curious to know who it is supposed to be pulling the rope?</p><p><br /></p><p>Rob T</p><p><br /></p><p>PS interesting to note that even the word &quot;seigniorage&quot;&nbsp; does not appear in 21st century spell checkers.[/QUOTE]</p><p><br /></p>

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