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.
Sec.7.