In Coinage Money What Is Meant By Non-gratuitous And Debasement Of Coins?

Coinage is said to be non gratuitous when the government charges fee for converting metal into coins. If the charge is exactly equal to the minting cost, then it is called mintage or brass age. If the charge is higher than the cost of manufacturing coins, it is called seignior age.

Government which has the monopoly of manufacturing coins may charge seignior age either issuing an inferior metal or taking a fee higher than the cost of converting bullion. The main justification given for extra charge is that it reduces the chances of milling down the coins because the face value of the coins is not higher than new intrinsic value.

Debasement of coins:
When there is a difference between a standard value of precious metals fixed by law and the real value of the metal used as a coin, it is then a case of debasement. Pakistani rupee in accordance with the park coinage act should contain 4 grains of silver and 6 grains of alloy.

This ratio now has been changed and silver content has been reduced by 2 grains without amending the coinage act. Pakistani rupee is thus a debased coin. The reason for the debasement of coins is various. Debasement may be practised to discourage the melting of the coins or to earn revenue or check the melting of the metallic currency.