PAPER CURRENCY 197

this kind. It is to be noted that the right of all to have gold
made into coin prevents the manipulation of the supply of
coin by the government of the day. The existence of this
right does not imply that the work of coinage is performed
gratuitously, That is sometimes done, as noted above, but a
charge for coining known as a seigniorage is quite generally
made. The exaction of the cost of striking coin from those
who desire to have their gold made into coin seems a most
reasonable arrangement. It is important, however, to
observe that the price-level does not remain unaffected, and,
though little effect is produced by seigniorage charges which
merely cover cost of mintage, the practice of levying a
seigniorage has not always been associated with charges so
limited, and the effects on prices have been important.
Bank-notes and other circulating paper are, indeed, representative
 money on which the seigniorage has approximated
to one hundred per cent., and the same considerations which
apply to the case of bank-notes apply also to the issue of
any other currency on which a high seigniorage has been
levied, The value can only be maintained by limitation of
issue. If the number of coins of each denomination re-TNained
 the same whether a seigniorage charge was levied or
10t, the exaction of this charge would not influence the
value of money relative to commodities, that is to say, the
general level of prices. But the retention of metal, thus
held back from the coins, in the mint or treasury would
avail little to provide funds for the government. Practically
the seigniorage is coined, and the supply of coin is thus
increased, The value of the coin will thus be depreciated,
and the depreciation may reach to the point where the rate
of exchange of money-metal and other commodities is restored
 to what it would be if no seigniorage were charged.
At this point, coined and uncoined metal would exchange
On a parity, more coins being needed to purchase a given
amount of metal in the proportion of the seigniorage
deduction. The metallic equivalent of the unit of account
would have been altered in reality if not nominally. As will
Appear when the foreign exchanges are considered, the coins
Will then stand at their international equivalence of value.