medium a monopoly value. The value of the money would rise. When
it had risen until the coin would buy any more than one-ninth more
bullion than was in it, the citizens would begin to take metal to the
mint. After the ten per cent charge was taken out they would receive a
coin which, the containing one-tenth less bullion, would be worth
very nearly the same as the metal taken to the mint. No considerable
depreciation could take place unless the volume of business fell off
so that less money was needed than before. In that case there would
be no outlet for the excess of coins until they fell to their bullion
value, i.e., till they lost the entire value of the seigniorage, the
monopoly element in them. Melting or exporting them before that point
was reached would cause to the owner the loss of whatever element of
seigniorage value they contained. We thus have arrived at the general
principle of seigniorage: when the number of coins issued is limited
to the saturation point, a seigniorage charge does not reduce their
money value; they are worth more as money than as bullion. And this
holds good of a large seigniorage charge as well as of a small one,
even up to the extreme limit of a charge of 100 per cent. In this last
case the government would retain the whole of the bullion brought to
it and would give in return a piece of money made of material (metal
or paper) with a negligible value.

§ 7. #Coinage on governmental account.# The fiduciary coinage problem
may be presented also when coinage is not free, and the times and
amount of coinage are determined by law or by legally authorized
officials. In this case the bullion must be obtained by purchase
in the open market (and paid for by some form of legal money, or by
bonds). Coinage is then said to be "on governmental account."

Now, assuming that the normal money-demand (the volume of business, or