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Circulating Capital
Coin debasing is the practice of mixing cheaper metals into currency at the mint in order to reduce amount of precious metals in them (like gold, silver, and copper). This decreases coins’ real value, but not their nominal value, so many governments have historically debased their coinage in order to reduce their debts.
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Coin Debasing Term Timeline in The Wealth of Nations
The timeline below shows where the term Coin Debasing appears in The Wealth of Nations. The colored dots and icons indicate which themes are associated with that appearance.
Book 1, Chapter 4
...own local measurement systems. By changing the amount of metal in each coin, or coin debasing, sovereigns paid off their debts for less than they really owed.
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Book 1, Chapter 5
...on real prices, since nominal prices fluctuate due to the changing metal supplies and coin debasing. Indeed, as all nations continually debase their coins and new mines in America have increased...
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Book 1, Chapter 11
...and a series of import/export laws in the 1400s confirmed this. But due to coin debasing, six shillings and eight-pence contained less and less silver over this time, settling around two...
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...wheat actually rose slightly from 1637–1700, due to the English Civil War, massive silver coin debasing, and a policy offering incentives for grain exportation, which increased both the production and the...
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Book 2, Chapter 2
...abroad or sell it back to the bank at a higher price. This accelerated coin debasing over time, leading banks to lose more and more money.
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Book 4, Chapter 3
...is often worth far more or less than its nominal value in different countries. Coin debasing reduces its value, while seigniorage raises it. In some countries, debts are payable in bank...
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...trade, but smaller ones often have to use foreign currencies, which are subject to coin debasing. To protect themselves, small-country merchants often demand payment in bank money, which is worth more...
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Book 4, Chapter 6
...gold coins and gold-plated objects are made by melting down old ones. Due to coin debasing, it was long profitable to melt down freshly-minted coins and sell them as bullion. But...
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...revenue from it. A seigniorage would also protect the Bank of England against future coin debasing, which would cost it dearly because the Bank brings far more bullion to the mint...
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Book 5, Chapter 3
...owed by the poor to the rich. Many nations have performed this trick secretly by debasing their currencies at the mint. This always causes popular outcry.
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