Gold was always used in circulation in France as a monetary merchandise, when silver was the overrated metal, without any difficulty, but at a premium, not at the legal ratio.
3. Coins of the underrated metal may circulate as a species of token money, either because there has been a heavy seignorage on them, or because they have become worn and deteriorated, so that they occupy the same place, and do the same work, as token coinage of a different metal than the standard does in a monometallic system. This was notably the case in England with the silver coinage during last century. Silver was underrated, and gold had become the standard; but a silver coinage of a very bad description remained, which was used exactly as the silver-token coinage is now used.
In these three ways, then, coins of an underrated metal in a bimetallic system, and coins of different metals in an inconvertible paper country, may remain physically in a country when they go out of use as standard money, without being actually exported.
When export does, in fact, take place, it arises from the formation of a surplus of the underrated metal, through changes of circumstances as regards the use of it in the various ways specified.
For instance, the habit as to hoarding itself, or as to the use of a particular metal for hoarding, may change. From either cause less of the underrated metal may be hoarded than would otherwise be the case, and a surplus may thus come into existence which will be exported if no other use can be found for it. Much also would depend upon the price. The offer of a higher price might draw from the hoards what would not otherwise be drawn.
The demand for full-weighted coins of the underrated metal for use within the country may also vary from time to time. The different range of transactions, change of custom as to the use of cheques and bank-notes, and the like causes may make a difference. Here again price may also make a difference, though this is not so likely, perhaps, as with regard to hoarding.
As regards worn and deteriorated coins circulating as token money, a surplus may arise through considerable changes in habits as to the use of token money. But probably considerable changes would be necessary to cause the stock of such coins to be drawn on for export, as the price of the underrated metal would have to rise to a point sufficient to make the coins worth more as metal than as coins, before a question of their export could arise.
