A composite system of currency has frequently existed in one country or another without being specially designed or recognized. It comes into existence whenever coins of gold and silver are current at rates fixed by law or custom, but the silver coins are reduced by abrasion or clipping below the corresponding weight. From the year 1717, when the guinea was fixed at 21s., until the present system was instituted in 1816, the English currency was based theoretically upon the double standard system. Practically, however, the silver coins were so scarce and worn that they served but as tokens. The tradesmen's copper tokens, too, being always of light weight, and exchangeable by custom for a certain proportion of silver coins, formed the third term in the series. But Lord Liverpool appears to have been the first to apprehend and explain the principles on which such a composite system worked, and there can be no doubt that the system, as he expounded it, is the best adapted for supplying a convenient and economical currency.

Most of the leading nations have now adopted the composite legal tender in a more or less complete form. France, Belgium, Switzerland, and Italy still adhere to the double standard in theory, but have reduced all coins. of less value than five francs to the footing of token money, by reducing the fineness of the silver from 900 parts to 835 parts in 1000, or by 7 per cent., and by limiting the amount for which they are legal tender. The copper money of France had previously been restricted as a legal tender to sums below five francs in

any one payment. In the United States, when metallic currency was generally employed, the double standard system existed in theory, but was reduced to a composite standard by the excessive overvaluing of the gold money. Moreover, by a law of 21st February, 1853, the smaller silver coins were reduced in weight and made legal tender only for sums not exceeding five dollars. The silver three-cent pieces, and the several copper, bronze, or nickel coins, issued from the United States' mints, were also token money with various limits as regards legal tender.

The new German monetary system is perfectly organized as a composite legal tender.

CHAPTER X.

THE ENGLISH SYSTEM OF METALLIC CURRENCY.

I NOW come to describe in more detail the system of metallic currency which has existed in England for more than half a century, and which seems to be the best of all as regards the principles on which coins of three dif ferent metals are combined into a composite legal tender. The legal regulations under which the English coinage is issued and circulated, can be ascertained with ease and certainty, thanks to the Act of Parliament (33 Victoria, ch. 10), which Mr. Lowe caused to be passed to simplify and consolidate the statutes on the subject.

English Gold Coin.

The English sovereign is the principal legal tender and the standard of value. It is defined as consisting of 123-27447 grains (7·98805 grams) of English standard gold, composed of eleven parts of fine gold, and one part of alloy, chiefly copper. The sovereign ought, therefore, in theory, to contain 113-00160 grains, or 7.32238 grams, of pure gold. But as it is evidently impossible to

make coins of any precise weight, or to maintain them of that weight when in circulation, the weight stated is only that standard weight to which the mint workmen should aim to attain as closely as possible, both in each individual piece, and in the average.

From the weight of the sovereign we deduce the mint price of gold. For if we divide the number of grains in the sovereign into the number of grains—namely, 480—in the troy ounce, we ascertain exactly how many sovereigns and portions of a sovereign the mint ought to return for each ounce delivered in. This we find to be 3.89375, which is equivalent to £3 17s. 10d. It comes to exactly the same thing to say in terms of the old mint indentures, that twenty-pounds' weight troy of gold are to be coined into 934 sovereigns, and one half-sovereign. I have heard of people who protested against the government fixing the price at which gold should be bought and sold by the mint, and who yet allowed that the sovereign must have some fixed weight. But the fixed price is convertible with the fixed weight, and vice versa. follows from the other.

Either

In practice the weight of a coin is always a matter of limits, and there must be limits both for the weight as sent out and that at which it can legally remain in circulation. The remedy is the technical name for the allowance made to the mint-master for imperfection of workmanship, and is defined by the Act as two-tenths of a grain (0.01296 gram). Thus the mint cannot legally issue a sovereign weighing less than 123 074 grains, or more than 123:474 grains. Since the fineness of the gold, again,

can never be adjusted exactly to the standard of eleven parts in twelve, or 916-66 in a 1000, a remedy of two parts in 1000 is allowed in this respect. It is understood that the English mint succeeds in working well within the remedy both of weight and fineness.

Every sovereign issued from the mint in accordance with these regulations, and bearing the impress authorized by the Queen, is legal tender, and must be accepted by a creditor in discharge of a debt to that amount, provided that it has not been reduced by wear or ill-treatment below the weight of 122.50 grains (7.93787 grams). If a sovereign of less than this least current weight be tendered to any person, he is presumed by the law to detect the deficiency, and is bound to cut or deface the coin, and return it to the tenderer, who must bear the loss. If the coin so defaced should prove not to be below the limit, then the defacer has to receive it and bear the loss arising from his mistake. Any justice of the peace may decide disputes arising concerning light sovereigns in a summary manner.

The only other gold coin actually issued is the halfsovereign, of which the standard weight and remedy are exactly half those of the sovereign, the remedy in fineness the same as in the sovereign, and the least current weight 61·1250 grains (3·96083 grams). The Coinage Act also legalizes the issue of two- and five-pound gold pieces, the weights and remedies in weight being corresponding multiples of those of the sovereign. Coins of the value of five and two guineas were struck by most of the English monarchs from the time of Charles II. to that of