How Private Money saved theIndustrial Revolution

Spencer: “So constantly have the ideas of currency and government been associated…and so completely have men come to regard this control as a matter of course, that scarcely any one seems to inquire what would result were it abolished. Perhaps in no case is the necessity of state-supervision so generally assumed; and in no case will the denial of that necessity cause so much surprise. Yet must the denial be made.”

Jevons: “Mr. Spencer…in this instance…has pushed a general principle into an exceptional case, where it quite fails. He has overlooked the important law of Gresham…that better money cannot drive out worse. In matters of currency self-interest acts in the opposite direction to what it does in other affairs… .In my opinion there is nothing less fit to be left to the action of competition than money.”

“For a long time the copper currency of England consisted mainly of tradesmen’s tokens… . The multitude of these depreciated pieces in circulation was so great, the magistrates and inhabitants of Stockport …resolved to take no halfpence in future but those of the Anglesey Company, which were of full weight. This shows, if proof were needed, that the separate action of self-interest was inoperative in keeping bad coin out of circulation… .”

Regal coin output

Regal Copper Coins: Good Worn

Counterfeit

Parys Mine Druid Penny

Macclesfield “Beehive” Halfpenny

Soho Enterprises:

• Plate Company• Boulton & Scale (buttons)• The Albion Mill (steam corn mill)• Boulton & Watt (steam engines)• Boulton & Watt (Cornish mine

interest)

The 1st Commercial Coinage Regime, 1787-1799

Why bother?

•Advertising •Float•Security

Alleged Shortcomingsof Private Coins

•Limited circulation•Low “intrinsic” value•Plethora of “counterfeit”

tokens

The Market’s Verdict

•200% premium on local tokens relative to Tower copper

•Stockport resolution?

Soho “Cartwheel”

Countermarked Spanish (Bank of England) Dollar

Soho Bank Dollar

Private Silver Token

John Berkeley Monck’s Gold Token:

One metal too far

“This is a most dangerous and mischievous measure, which will create confusion and distress in the country, by destroying the means of carrying on the retail trade, it being only through the medium of the small change afforded by these local metallic tokens that the retail trade in the country can at present be carried on.”

Bath, September 21, 1812.It was very difficult to get a

pound note changed, even by taking 15s. worth of copper before tokens were issued. The people here are in general crying out, “What shall we do for change, when the tokens are called in?”

Requirements for good money

•Superior engraving•Other anti-counterfeiting devices

•Convertibility•Competitive pricing

Birmingham Mint Pattern Euro

THE END