Before the late re-coinage, when the gold currency of England was two percent below its standard weight, as there was no seignorage, it was two percent below the value of that quantity of standard gold bullion which it ought to have contained. When this great company, therefore, bought gold bullion in order to have it coined, they were obliged to pay for it two percent more than it was worth after the coinage. But if there had been a seignorage of two percent upon the coinage, the common gold currency, though two percent below its standard weight, would notwithstanding have been equal in value to the quantity of standard gold which it ought to have contained; the value of the fashion compensating in this case the diminution of the weight. They would indeed have had the seignorage to pay, which being two percent their loss upon the whole transaction would have been two percent exactly the same, but no greater than it actually was.
If the seignorage had been five percent and the gold currency only two percent below its standard weight, the bank would in this case have gained three percent upon the price of the bullion;