I answer, To determine that question, let bullion over all the commercial world be stated at 100, and let coin in every country be compared with it, according to the current price. In England, for example, (were all disorders of the coin removed) coin must always be as 100. In France, when the balance is favourable, at 108.27. In Germany (were the Emperor’s late regulation with Bavaria to be made general) at 101. And so forth, according to the price of coinage imposed every where. These advanced values above the 100, never can rise higher; and the more the balance of their respective trade is unfavourable, the nearer they will severally come to 100; below which they never can fall. These fluctuations will constantly be marked in exchange; because all circumstances are exactly combined by merchants; but the _balance of the trade_ will only be marked _by what exchange is made to vary from these proportions_. [Sidenote: Proof of this proposition.] Let me suppose the trade of France favourable upon the whole, by great commissions from Cadiz, and bullion at the same time to be carried to the mint at 8 _per cent._ below the price of coin. Let me suppose, that upon all the trade of England with France, there shall be, at that time, a balance of 2 _per cent._ sent from France to England in bullion; and upon the trade with Germany a balance of 1 _per cent._ I say, that the _par of exchange_ between England and France is 8 _per cent._ against England; and that the _par of exchange_ between Germany and France is 7 _per cent._ I state it at this rate; because the balance being supposed favourable for the three nations, the value of their coin with respect to their bullion ought to be in proportion to the mint price. The _course of exchange_, therefore, if it be a rule to judge by, ought to mark 6 _per cent._ against England; which I say is 2 _per cent._ in her favour: and the exchange with Germany ought to mark 6 _per cent._ against Germany; which I call 1 _per cent._ in her favour. An example will make this plain. Suppose English guineas, German carolins, and French Louis, to be all of the same weight and fineness; I say, the _real par_ in the example we have stated is, between Paris and London, 100 Louis are equal to 108 guineas; because the 100 Louis are worth 100 guineas in London, and 108 guineas are worth no more than 100 Louis in Paris. Again, between Paris and Francfort, 100 Louis are equal to 107 carolins; because 108 carolins are worth at Paris 100 Louis; and 101 Louis at Francfort are worth 100 carolins; consequently, the difference between 7 and 8 is the _real par_, to wit, 100 Louis for 101 carolins. Next, as to the par between London and Francfort, here 100 carolins equal 101 guineas; because 100 carolins in London are worth 100 guineas; and 101 guineas at Francfort are worth no more than 100 carolins.