Mr. Cantillon, in his _Analysis of Trade_, which I suppose he understood by practice as well as by theory, has the following passage in his 99th page. “The course of exchange between Paris and London since the year 1726, has been at a medium price of 32 pence sterling for the crown of three livres; that is to say, we pay for this French crown of three livres, 32 pence sterling, _when calculated on gold_, when in fact it is worth but thirty pence and three farthings, which is giving four pounds in the hundred for this French money; and consequently, upon gold, the balance of trade is 4 _per cent._ against England in favour of France.” In this place, Mr. Cantillon calculates the par of exchange according to the common rule, to wit, gold bullion against gold bullion in the coins of both nations, where both are of legal weight; and he finds that there has been, these thirty four years past, a balance of 4 _per cent._ against England. Now according to my theory, this is exactly what the coinage in France ought to produce, supposing on an average that the trade had been at par. Here is the reason. The coinage in France costs 8 _per cent._ When the balance of trade is favourable for France, coin is worth 8 _per cent._ above bullion. The proof is plain. Were it not 8 _per cent._ above bullion, no man would ever carry bullion to the mint; because the mint price is 8 _per cent._ below that of the coin. When the balance of trade is against France, coin must fall nearly to the price of bullion. Supposing then that the balance of the trade of France (at a medium of thirty four years) is found to have been at par, will it not follow, that at a medium also of these thirty four years, French coin must have been at 4 _per cent._ (the half of the coinage) above bullion? Consequently England having taken merchandize from France, and France having merchandize from England, for the same weight and fineness in their respective coins, must not England have been obliged to send to France 4 _per cent._ more bullion in order to pay the coinage? This reasoning appears conclusive to me, who am no merchant, and who do by no means pretend to a perfect understanding of those affairs; but I think this circumstance is at least of sufficient importance to make the matter be inquired into. For this purpose, I shall suggest a method of making the discovery. [Sidenote: Easy to be verified at all times by the price of bullion and course of exchange in the Paris market.]