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nydus/An Inquiry into the Nature and Causes of the Wealth of NationsPublic

Adam Smith examines how the annual labor of a nation determines the supply of necessities and conveniences available to its population. He analyzes how the skill of the workforce and the ratio of productive to unproductive laborers influence a society's overall wealth and standard of living.

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Table of Contents

CHAPTER VI. OF TREATIES OF COMMERCE.

bullion; but as they would have had a seignorage of five per cent. to pay upon the coinage, their loss upon the whole transaction would, in the same manner, have been exactly two per cent.

If the seignorage had been only one per cent., and the gold currency two per cent. below its standard weight, the bank would, in this case, have lost only one per cent. upon the price of the bullion; but as they would likewise have had a seignorage of one per cent. to pay, their loss upon the whole transaction would have been exactly two per cent., in the same manner as in all other cases.

If there was a reasonable seignorage, while at the same time the coin contained its full standard weight, as it has done very nearly since the late recoinage, whatever the bank might lose by the seignorage, they would gain upon the price of the bullion; and whatever they might gain upon the price of the bullion, they would lose by the seignorage. They would neither lose nor gain, therefore, upon the whole transaction, and they would in this, as in all the foregoing cases, be exactly in the same situation as if there was no seignorage.

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