VALUE OF A LIMITED COIN 2g 
On the value, measured in commodities in general, 
of the metal of which the coin is made, seignorage 
has no influence except in so far as it tends to reduce 
the demand for that metal by diminishing the quantity 
taken up by the currency, and this may be taken as 
a practically negligible effect when seignorage in only 
a single country is being considered. We need, there- 
fore, scarcely encumber the exposition by making an 
allowance for the tendency of seignorage to depress 
the value of bullion : the matter is too trifling to be 
worth bringing into account. 
As seignorage is seldom or never large, and as for 
the most part it simply raises the value of the coin 
once for all and then allows it to fluctuate very nearly 
with, though a little above, the value of the bullion 
contents of the coin, we may regard it as of little 
practical importance, but it may be of considerable 
use in enabling us to understand the effects of limita- 
tion in general. 
When the fact is once grasped that it is limitation 
of supply, coupled of course with sufficiency of 
demand, which enables a seignorage to keep the value 
of the coin ordinarily above the value of the metal 
of which it is composed by the amount of the seignor- 
age, the way is opened for comprehension of the 
fact that by a * closing of the mint to free coinage,” 
and coining only suitable amounts, coins made 
of one metal may be made to circulate at some 
value fixed “= reference to coins made of another 
metal. 
This was first discovered in consequence of the very 
reasonable desire of every one to keep coins made of 
two different metals, gold and silver, both in circula- 
tion at the same time, cid being convenient for 
larger and silver for emaller payments, though not 
for the smallest of all. So long as they attempted to 
maintain free coinage of both metals, governments