seigniorage Meaning, Definition & Usage

Seign"ior*age noun

Etymology

F. seigneuriage, OF. seignorage.

Definitions

1. Something claimed or taken by virtue of sovereign prerogative; specifically, a charge or toll deducted from bullion brought to a mint to be coined; the difference between the cost of a mass of bullion and the value as money of the pieces coined from it.

   If government, however, throws the expense of coinage, as is reasonable, upon the holders, by making a charge to cover the expense (which is done by giving back rather less in coin than has been received in bullion, and is called "levying a seigniorage"), the coin will rise to the extent of the seigniorage above the value of the bullion. J. S. Mill.

2. A share of the receipts of a business taken in payment for the use of a right, as a copyright or a patent.