THE WEALTH OF NATIONS.

513

Before the late re-coinage, when the gold currency ofEngland was two per cent, below its standard weight, as therewas no seignorage, it was two per cent, below the value ofthat quantity of standard gold bullion which it ought to havecontained. When this great company, therefore, boughtgold bullion in order to have it coined, they were obliged topay for it two per cent, more than it was worth after thecoinage. But if there had been a seignorage of two percent, upon the coinage, the common gold currency, thoughtwo per cent, below its standard weight, would notwithstand-ing have been equal in value to the quantity of standard goldwhich it ought to have contained ; the value of the fashioncompensating, in this case, the diminution of the weight.They would indeed have had the seignorage to pay, whichbeing two per cent, their loss upon the whole transactionwould have been two per cent, exactly the same, but nogreater than it actually was.

If the seignorage had been five per cent, and the gold cur-rency only two per cent, below its standard weight, the bankwould in this case have gained three per cent. upon the priceof the bullion; but as they would have had a seignorage offive per cent, to pay upon the coinage, their loss upon thewhole transaction would, in the same manner, have been ex-actly two per cent.

If the seignorage had been only one per cent, and the goldcurrency two per cent, below its standard weight, the bankwould in this case have lost only one per cent, upon the priceof the bullion; but as they would likewise have had a seig-norage of one per cent, to pay, their loss upon the wholetransaction would have been exactly two per cent, in the samemanner as in all other cases.

If there was a reasonable seignorage, while at the sametime the coin contained its full standard weight., as it has doneJ ct y nearly since the late re-coinage, whatever thebank mightose by the seignorage, they would gain upon the price of* le j^dlion ; and whatever they might gain upon the price oftlie bullion, they would lose by the seignorage. They wouldneither lose nor gain, therefore, upon the whole transaction,and they would in this, as in all the foregoing cases, he ex-actly in the same situation as if there was no seignorage.

When the tax upon a commodity is so moderate as not toencourage smuggling, the merchant who deals in it, though,e a(1 vances, docs not properly pay the tax, as he gets it hack