In all the British North American colonies accounts are kept and prices
are quoted in pounds, shillings, and pence, as in England. The accounts
are contra-distinguished by calling the former currency, or Halifax
currency, and the latter sterling or British sterling.
The one pound Halifax currency, or currency, as it is more commonly
called, consists of four Spanish dollars. The dollar is divided into
five parts--called in Spanish pistoreens--each of which is termed a
shilling. Each of these shillings or pistoreens is again subdivided into
twelve parts, called pence, but improperly, for there is no coin
answering to any such subdivision. To meet the want a great variety of
copper coins are used, comprising the old English halfpenny, the
halfpenny of later coinage, the penny, the farthing, the American cent.;
all and each pass as the twenty-fourth part of the pistoreen or colonial
shilling. Pence in fact are not known, though almost anything of the
copper kind will be taken as the twenty-fourth part of the pistoreen.*
[* The Americans also have their 1 shilling, which is the eighth part of
a dollar, or 12-1/2 cents. It is no uncommon thing to hear the emigrant
boast that he can get 10 shillings per day in New York. He knows not
that a dollar, which is equal to eight of these shillings, is in England
equivalent but to 4 shillings 2 pence, and that the American shilling
is, therefore, when compared with the English shilling in value, only
6-1/4 pence, and consequently, that 10 shillings a day is, in fact, but
ten 6-1/4 pence or 5 shillings 2-1/2 pence. This rate of payment it may
be said is still great; so it is, but it is not often obtained by the
labourer; when it is, it is for excessive labour, under a burning sun in
sea-port towns, during the busy shipping season.]
At a time when the Spanish dollar, the piece of eight, as it was then
called, was both finer and heavier than the coin now in circulation, its
value at the mint price of silver** was found to be 4 shilling 6 pence
sterling. Accordingly, the pound currency was fixed at 18 shillings
sterling, and 90 pounds sterling was equal to 100 pounds currency, the
rules of conversion being, _add one-ninth to sterling to obtain
currency, and deduct one tenth from currency to find the sterling_. This
was called the par of exchange, and was so then. So long as it continued
correct, fluctuations were from a trifle above, to a trifle below par,
and this fluctuation was a real _premium_ or _discount_, governed by the
cost of the transportation of bullion from the one to the other side of
the Atlantic, an expense which now does not exceed, and rarely equals, 2
per cent. 4 shilling 6 pence has long ceased to be the value of the
dollar. Both the weight and purity of the coin have been reduced, until
its value in the London market*** is not more than 4 shillings 2 pence,
the pound currency being consequently reduced to 16 shillings 8 pence
sterling and 100 pounds sterling become equivalent to 120 pounds
currency, or 480 dollars, the common average rate now given for the 100
pounds sterling bill of exchange in England.
[** The mint price then coincided more nearly with the market price than
at present.]
[*** It is necessary to use the market price, as the difference between
the mint and the market price is 4 per cent., and as the Spanish dollar
possesses no conventional value, it is only worth what it will bring as
an article of traffic.]
The Government, however, still sanction, nay, will not change, the old
language, so that the difference is made up by adding what is commonly
termed a _premium_. The difference between the _real_ par, 4 shillings
2 pence, and the nominal par, 4 shillings 6 pence, is 4 pence or eight per
cent. Thus the fluctuations, instead of being from 1 to 2 per cent.
below, to 1 or 2 per cent. above the _real_ par, are from 1 to 2 per
cent. below, to 1 to 2 per cent. above 8 per cent. _premium_ as it is
called on the _nominal_ par, or from 6 or 7 to 9 or 10 per cent.
_premium_ on the par. This leads to gross deception, and the emigrant in
consequence is not unfrequently outrageously cheated by parties
accounting to him for money obtained by sale of bills, minus this or
some portion of this nominal premium. Nothing is more common than to
hear the new comer boast that he has sold his bill on England for 8 per
cent. premium, while in fact he has not received _par_ value. As by the
above changes 100 pounds sterling is shewn to be equal to 120 currency,
or 480 dollars, the rule of conversion, in the absence of a law, where
no understanding to the contrary existed, should be, _add one-fifth to
sterling money, and currency is obtained, or deduct one-sixth from
currency, and sterling is found._ An examination of the exchanges for
ten years has proved this to be correct.
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