December 12, 1868.

Aus:
The Economist, 12. Dezember 1868. S. 1412–1414.
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Prof. Jevons: Amount and Condition of the Gold Coinage.  Zusatz von Marx.
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(Verschleiß der Goldmünze.)

At last meeting of the „Statistical Society“ this paper read by Jevons. His main conclusion summed up in these words:

„There is a mass of about 20,000,000 of light sovereigns and 5 or 6 Mill. £ in value of half-sovereigns circulating in defiance of the law. This light coin forms almost a third part of the sovereign circulation and nearly a moiety of the half-sovereign circulation; but being unequally distributed we find that in some of the agricultural districts the proportion of light sovereigns rises to 44 P.Ct. The average of deficiency of the sovereigns is fully ·53 P.Ct., or more than 10s. in 100£, while the half-sovereigns are depreciated more than twice as much, or about 24s. in 100£.“

The first branch of the inquiry relates to the amount of the coinage. … The most approved plan has been to assume the probability of a certain amount of coin being in circulation in a given year, add the ascertained amount of coinage from that time, deduct the amount exported and cancelled for lightness, and so arrive at an approximation to the truth. Jevons has applied it with great care to a new subject.

What Jevons proposed was, to find out the proportion of coins in circulation belonging to each year since |81 1817, when the previous coinage was called in. Though it would not be possible by this means alone to arrive at the amount of the circulation, it would be possible to say what proportion of it was derived from the mint-issues of recent years; and this would furnish the means of arriving at the truth. The amount of recent coinage probably circulating may be guessed at with some accuracy, and having previously ascertained its proportion to the whole coinage we may know what the whole is too.

Jevons distributed a circular letter and blank form to a number of bankers and other gentlemen, requesting them to take out one or two hundred sovereigns at random from those received in the ordinary course of business, and count the number of each year. He thus got statistics from every great centre of population in the country, and from every variety of district – 321 returns in all relating to 213 distinct towns and localities; and he received unexpected assistance in his plan. The gentlemen to whom he applied went beyond his requirement; The Governor of the Bank of Scotland procuring an enumeration of 48,647 coins at the various branches of the bank, and the General manager of the London and Westminster Bank a similar complete return for his district. Altogether he received an enumeration of 90,474 sovereigns and 75,036 half-sovereigns, a total of 165,510 coins. The result is stated in an elaborate table, showing on the data thus obtained the proportion of 100,000 sovereigns and half-sovereigns belonging to each year; but the principal conclusion for the present purpose is that „out of every 100,000 sovereigns now in circulation, 18,671 sovereigns are found on an average to bear the dates 1863 and 1864.“ The proportion varies in different localities; but after drawing up many averages, he had found this to be near the truth. According to the plan of procedure this result brings us very near the end. The proportion of the whole coinage of sovereigns to that part of it bearing the date of 1863 and 1864, being as 100,000 is to 18,671, or as 5.356 (51/3) times greater, we have only to ascertain what the circulating coinage of those years (1863 and 1864) is, and multiply by 51/3, to find out the total amount of the circulation.

This last step is easily performed. The coinage of sovereigns of 1863–64 was £14,578,000, but of this amount £600,000 at the date of the circulation were lying in bags as received from the mint – had never passed into circulation at all. The quantity of 1863–64 sovereigns circulating cannot therefore exceed 14,578,000l. minus 600,000l., or just about 14,000,000l; the whole circulation of sovereigns cannot exceed 51/3 times 14,000,000l., or in round numbers £75,000,000. A similar calculation for half-sovereigns shows that 12,819 out of every 100,000 are of the coinage of 1863–64, or about 1/8 of the whole coinage. As the coinage of those years amounted to £1,565,000, the total number of half-sovereigns cannot exceed 8 × that amount (or, exactly, 7.8 times), also nicht 24,000,000 in Number or £12,000,000 in Value.|

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Maximum of whole Gold Coinage in U. Kingdom.
Sovereigns in Circulation £75,000,000
Half Sovereigns 12,000,000
Coined but not circulated 3,500,000
Total £90,500,000

The real figure must be considerably below. Although 14 Mill. £ of the coinage of 1863–64 passed into circulation, some portions of it must have been exported or melted; and every deduction necessary on that account must be multiplied by 51/3, and deducted from the above total. Now the export of coin in 1865, 1866; 1866, and 1867 was £8,664,653, and it may be safely assumed that the export of the 1863–64 coinage corresponded in amount at least to the proportion of that coinage to the whole coinage; it may have been greater, as exporters prefer the newest and heaviest coinage, but it cannot well have been less. In other words as the sovereigns of 1863–64 form about 1/5 of the sovereign currency, they must at least form 1/5 of the above exports. We have thus to deduct l,750,000l. from the 14 Mill. £ of 1863–64 coin which passed into circulation, giving 12,250,000l. the figure which we must multiply by 51/3 to arrive at the total amount of sovereigns in circulation. This would yield 65,600,000l., but reducing this a little for the sake of round numbers, Jevons gives the following as his final estimate:

Gold Coinage in U. Kingdom.
Sovereigns in Circulation £64,500,000
Unmixed Sovereigns (i.e. coined but not circulated) 3,500,000
Half sovereigns 12,000,000
Total 80,000,000

Even this is a maximum figure, for the extent to which the heaviest new coins are melted (erst selected für that purpose) by the most respectable capitalists and bullion dealers cannot be calculated, though the practice is known to prevail. Aber even so, this estimate considerably less than the lowest of the most authentic estimates previously made. The most important that of Newmarch , in one of his appendices to Tooke’s „History of Prices“, applying the old method. His figure for 1856 was 75,000,000l., and would now be 94,000,000, 14 Mill. £ in excess of the one now made.

Prof. Jevons concludes this part of the subject by an estimate of the whole circulating medium in the country, deducting from the note circulation the amount which merely represents gold.

Estimate of the Whole Circulating Medium in the Country.
Gold Coin £80,000,000
Silver Coin 14,000,000
Copper Coin 1,000,000
Bullion (say) 15,000,000
Notes issued by Bank o. E. on securities 15,000,000
Issues by other English Banks: £5,000,000
Specie to be subtracted: £1,500,000 3,500,000
Scotch and Irish Issues: £10,000,000
Specie to be subtracted: 4,500,000 5,500,000
Total £134,000,000

The second branch of the inquiry relates to the condition of the coinage – the practical question being how large a portion of the coin in circulation are under legal tender, and how much the deficiency is. To obtain a conclusion on this point Jevons weighed singly, upon a delicate chemical balance, 434 Sovereigns and 178 half Sovereigns drawn from the ordinary circulation at Manchester. He finds the Average Annual Wear of the |83 Sovereign to be .043 grain (43/100) or .00276 grammes. As the coins when issued weigh 7.9871 grammes, and cease to be legal tender when they fall below 7.9379 grammes (122·5 grains), about 18 years will suffice to reduce a sovereign on the average below its legal currency. Age and weight of every sovereign will of course not correspond, for some are coined heavier than others and the wear is different, but the average is true. „It would“, says Jevons, „be hard to name a subject in which reasonings by average may be more safely trusted than the present, because the coinage consists of an immense number of pieces which are constantly circulating through every part of the country and in every kind of business.“ Having thus settled the average annual loss and knowing the average weight of issue, Jevons has the means of calculating from the first table he prepared how many of the coins now in use are under legal tender and what the deficiency in those coins is. As to what are under legal tender the calculation simply is that as a coin falls below legal tender in 18 years the proportion of sovereigns in circulation of a greater age than 18 is equivalent to the proportion of illegally light sovereigns. The proportion of coinage of a greater age than 18 being 31.5 P.Ct., it follows that this is also the percentage of the light to the total coinage. In 1840 and 1841, when there was a partial recoinage, the proportion of light gold did not rise of 25 or 28 P.Ct. There is an extraordinary difference of age between the sovereigns in the Bank of England and those outside it. The Bank being rigorous in cancelling light gold, light coin avoids it.

Return of 1,000 Sovereigns in Bank o. England, and in London and Westminster Bank.
Bank of England. Per Cent London and Westminster Bank per cent.
Coined in 1817–1819 0.0 .2
1820–1829 .4 6.9
1830–1839 .2 7.7
1840–1849 2.3 18.7
1850–1859 23.5 30.3
1860–1867 69.1 33.6
Australia 4.5 2.6
Total 100.0 100.0

There is a general complaint of the lightness of the coinage. In the following estimate the percentage determined by weighing except in the places marked with an asterisk:

Per Centage of light coin in the following places.
Sovereigns P.Ct. Half Sovereigns P.Ct.
*Ballyshannon 25 50
Birkenhead 63 66
Buckingham 57 48
Dartford 65 48
Dublin 47 48
*Dundalk 25
*Dundalk 20
Farnham 56 74
*Halifax 25
Lampeter 15 87
Leominster 29 58
Liskeard 38 30
*London 62 70
London 66 88
*Liverpool 50 50
Nenagh 23 49
*Norwich 70 70
*Ramsgate 66
Wells 75 94

The result is curiously illustrated by tables which Jevons gives as to the age of the coin – showing that the coin is newer in the manufacturing and mining districts, and that the proportion of old coin increases as we pass in the agricultural districts. The motion of the coin is mostly indiscriminate, but there are prevailing currents such as those caused by the influx of tourists into Wales and North Scotland. The main current however is produced by the habit of dealers in cattle and farm produce to make payments in gold, which is the cause of the influx of coin into agricultural districts. The consequence of this is that as the imports of those districts are likely to be paid for in draughts gold tends to accumulate in them, and it becomes necessary from time to time for the local banks to make remittances to London. But very naturally the banks select and remit the heaviest coins so as to avoid the loss on light gold which they are obliged to receive in the regular course of business. Notwithstanding, this „sieving and picking“ which is constantly going on, Jevons has unquestionable information that in the year ending 30. Sept. 1868, one large banking establishment lost on its light gold no less a sum than £6,716, in addition to „a large loss in interest on the stock we keep, so as to avail ourselves of any opportunity of placing the coin in circulation.“

Assuming that on the average all the deficiency on coin since 1850 is covered by the allowance for wear, it is found that the deficiency on the earlier sovereigns amounts to 307l. in 100,000l., or nearly 1/3 P.Ct. This would give a total deficiency to be made good of 200,000l. The proportion of deficiency in halfsovereigns is greater. The average life of a half sovereign as legal tender is only 71/2 years; but taking 10 years as a safer figure it is found that this gives a proportion of 47 P.Ct. as light, or 53/4 millions out of 12 Mill. The actual amount of the deficiency in coins which are not legal tender is 100,000l. Altogether the recoinage necessary will be |84 20,300,000l. in sovereigns and 5,700,000l. in halfsovereigns, on which the loss will be as stated – 200,000l. and 100,000l. respectively. Hence:

Total Probal Expense of Recoinage:
To make up deficiency of weight: £300,000
Dt. Dt. of fineness 7,000
Mint expenses 41,000
Total 348,000

Folgende Table is the Basis of Jevon’s calculation:

Sovereigns Half Sovereigns
Year of coinage Number issued from Mint. (000’s omitted.) Number existing in 100 Sovereigns circulating Number issued from mint. (000’s omitted) Number now existing in 100,000 Half Sovereigns circulating
1817 3,235 198 2,080 384
1818 2,347 8 1,030 136
1819 4 1 3
1820 932 308 35 43
1821 9,405 738 231 8
1822 5,357 485 8
1823 617 87 224 35
1824 3,768 334 592 167
1825 4,200 1,239 761 247
1826 5,724 2,201 345 181
1827 2,267 915 492 172
1828 386 38 1,245 430
1829 2,445 1,057 4 12
1830 2,388 843 11
1831 599 428 1
1832 3,737 1,718 8
1833 1,225 645 16
1834 15 134 4
1835 723 340 773 542
1836 1,714 937 147 113
1837 1,173 1,080 160 148
1838 2,719 750 273 245
1839 504 223 1 53
1840 8 67
1841 124 109 509 774
1842 4,865 3,057 2,223 4,654
1843 5,982 3,298 1,252 1,277
1844 3,000 1,918 1,127 2,796
1845 3,801 2,178 888 645
1846 3,803 1,987 1,064 2,395
1847 4,667 2,797 983 897
1848 2,247 685 411 885
1849 1,755 898 845 1,912
1850 1,402 1,285 180 438
1851 4,014 1,756 774 1,649
1852 8,053 4,082 1,378 2,559
1853 10,598 6,536 2,709 8,400
1854 3,590 2,277 1,125 253
1855 8,448 4,020 1,120 7,606
1856 4,806 2,831 2,392 4,374
1857 4,496 3,200 728 2,804
1858 803 1,060 856 2,412
1859 1,548 1,565 2,204 9,561
1860 2,556 3,070 1,131 4,185
1861 7,625 5,226 1,131 4,438
1862 7,836 7,005 550
1863 5,922 8,202 1,372 5,281
1864 8,656 10,469 1,758 7,538
1865 1,450 1,437 1,835 9,005
1866 2,774 7,542
1867 63 1,054
Australian 1,619 1,078
100,000 100,000

Inhalt:

  • Inhaltsverzeichnis von Friedrich Engels
  • 1869 I Heft
  • Money Market. 1868.
  • Money Market Review. Jahrgang 1868.
  • The Economist. Jahrgang 1868. Nachträge
    • The Economist. Jahrgang 1868.
    • Inhaltsregister für 1868 Jahrgang. („Money Market Review“ und „Economist“.)
    • Kommentar zu George Joachim Goschen
      • George J. Goschen: The Theory of the Foreign Exchange. 7th edit. London 1866.
      • Friedrich Ernst Feller, Carl Gustav Odermann: Das Ganze der kaufmännischen Arithmetik
      • Inhalt.