proportion that country bears to Europe; it would undervalue money
there, or, according to the way of speaking, it would raise goods:
but as money would be undervalued every where the same, or near to
what it were there; it would be of great advantage to that country,
tho’ thereby money were less valuable: for that country would have the
whole benefit of the greater quantity, and only bear a share of the
lesser value, according to the proportion its money had to the money
of Europe. when the Spaniards bring money or bullion into Europe, they
lessen its value, but gain by bringing it; because they have the whole
benefit of the greater quantity, and only bear a share of the lesser
value.
What has been said, proves, 1st. that silver money is an uncertain
value; because lyable to be altered in the fineness or denomination by
the prince. A crown has no more silver in it than half a crown or 15
pence had a 150 or 200 years ago.
2dly. That as silver it has fallen from the value it had, the same
quantity not being worth the 5th or 10th part of what it was worth
then. A moneyed man then worth a 1000 lib. was richer at that time than
a landed man of 240 chalder of victual rent: but a man of such a money
estate, would not now be worth one 50th part of such a land estate.
3dly, That tho’ fallen so much, yet it is given as money or sold as
bullion, for much more than its value as a metal; to which it will be
reduced, so soon as another money is set up.
Considering the present state of Europe, France and Spain being masters
of the mines, the other nations seem to be under a necessity of setting
up another money. the only reason can be given why it has not yet been
done, is, that the nature of money has not been rightly understood: or
they would not have continued buying silver from Spain above its value
as a metal, when they had a more valuable money of their own; and every
way more fitted for that use.
The receiver of silver can have no great hopes that the value of it
will be greater; for ’tis not to be supposed it will be apply’d to any
other uses, than it is now apply’d to, whereby the demand for it may be
encreas’d: or that the quantity exported and consum’d, will be greater
than the quantity imported.
Tho’ it be scarce in any particular country, yet the money’d men will
have no great benefit by such scarcity, as has been shown: for unless
the scarcity is the same in all places with which that country trades,
money will not be valued much higher there than in other countries.
If it is alledged the mines in the West Indies may fail. ’tis the
interest of the Spaniards to give out that their mines begin to fail,
to keep up the price of silver; but if that were true, France ought
not to have engaged her self in a war, when by the partition treaty
she could have got any other parts of that monarchy that are valuable.
allowing the mines do fail, we ought the rather to provide ourselves
with another money.
CHAP. VI.
_The proposal given in to Parliament by Dr. H. C. examined._
I did not intend to have said any thing about the Dr’s proposal, that
affair having been referr’d to a committee, who are to make their
report. but several people who are of opinion that the Dr’s proposal
is not practicable, being against what I am to propose, because they
think ’tis the same with his in some other dress: I thought it needful
to give a short account of the Dr’s proposal, and in what I differ from
him.
His proposal is to give out notes upon land, to be cancell’d by yearly
payments of about 2 and a quarter per cent, for 45 years. and that
these notes be current as silver money, to the value they are coin’d
for.
If notes given out after that manner, were equal in value to silver
money; then every landed man in Scotland, would desire a share of this
great and certain advantage: and I don’t see how it is practicable to
give every landed man a share.
Supposing it practicable, 45 years purchase in these notes, will not be
of so much value, as 20 years purchase of silver money.
No anticipation is equal to what already is. a years rent now is worth
15 years rent 50 years hence, because that money let out at interest,
by that time will produce so much. and tho’ the parliament would force
these notes, yet they would not have currency, any more than if the
government coin’d pieces of gold equal in weight and fineness, with a
guinea, and ordered them to pass for 5 lib.
These bills are propos’d to be repay’d and cancell’d in a term of
years, without paying any interest, but only so much as would defray
the charges of the office, which would not be above one half per cent.
There would then be many lenders, but few if any borrowers, except from
the land bank: for as ’tis the landed man borrows of the money’d man,
he would satisfie his creditor, and have bills to lend. the money’d
man would likewise have of these bills to lend, but there would be no
borrowers; or if any desired to borrow, they would have these bills
at a very low use. suppose at 2 per cent, then these bills would be
considerably less valuable than silver.
Any thing that is propos’d to have a currency as money, and is given
for a lesser interest than silver money, will be of less value.
It is not to be suppos’d any person will lend silver money at 2 per
cent, when they can have 6 per cent in England. so a 100 lib. silver
money, will yield as much as 300 lib. of these bills would: and 100
lib. in silver, will be equal to 300 lib. in bills. the 6 lib. the 100
lib. of silver yields, being silver, and the 6 lib. the 300 of bills
yields, being payed in these bills: and 1 lib. silver, being worth 3
lib. in bills; so the 6 lib. interest of the 100 lib. in silver, would
be equal to 18 lib. or the interest of 900 lib. in bills.
And tho’ they were given out to be repay’d in 20 years, at 5 per cent
for that time; or in 10 years, at 10 per cent: they would not be
equally valuable with silver. the difference would not be so great, as
when given out for 45 years.
The advantage the nation would have by the Dr’s proposal is; that tho’
these notes sell under the value of silver money, and 500 lib. in notes
were only equal to a 100 lib. in silver; yet the nation would have the
same advantage by that 500 lib. in notes, as if an addition of a 100
lib. had been made to the silver money.
So far as these bills fell under the value of the silver money, so far
would exchange with other countries be rais’d. and if goods did not
keep their price. (i. e.) if they did not sell for a greater quantity
of these bills, equal to the difference betwixt them and silver: goods
exported would be undervalued, and goods imported would be overvalued,
as has been explain’d page 43 and 44 about exchange.
The landed-man would have no advantage by this proposal, unless he
owed debt: for tho’ he received 50 lib. of these bills, for the same
quantity of victual he was in use to receive, 10 lib. silver money; yet
that 50 lib. would only be equal in value to 10 lib. of silver, and
purchase only the same quantity of home or foreign goods.
The landed-man who had his rent pay’d him in money, would be a great
loser. for by as much as these bills were under the value of silver, he
would receive so much less than before.
The landed-man who owed debt, would pay his debt with a less value than
was contracted for: but the creditor would lose what the debtor gain’d.
Dr. C. seems to be offended at my meddling in this affair, having, as
he says, borrow’d what I know of this subject from him. Two persons may
project the same thing, but so far as I can judge, what I am to propose
is different from his, and what I had form’d a scheme of several years
before I had seen any of his papers: which I can prove, if that were
necessary, by persons of worth I then show’d it to. I have not, to my
knowledge, borrowed any thing from Dr. C. land indeed is the value upon
which he founds his proposal, and ’tis upon land that I found mine:
if for that reason I have incroached upon his proposal, the bank of
Scotland may be said to have done the same: there were banks in Europe
long before the Dr’s proposal, and books have been writ on the subject
before and since. the foundation I go upon has been known so long as
money has been lent on land, and so long as an heretable bond has been
equal to a quantity of land. whether the structure he or I have built
upon that foundation be most safe, advantageous and practicable, the
parliament can best judge.
Dr. C’s proposal is by anticipation, to make land worth 50 or a 100
years purchase; and maintains that a 100 lib. to be payed yearly for
10, 50, or a 100 years, is a valuable pledge for a 1000, 5000, or a
10000l. of bills: and that these bills will be equal to silver-money.
if he can satisfie the nation that his proposal is practicable, he does
a very great service, and gives a certain advantage to the landed-man,
without wronging the money’d-man. I have shown the reasons why I think
the proposal is not practicable; and that notwithstanding any act of
parliament made to force these bills, they would fall much under the
value of silver. but allowing they were at first equal to silver, it is
next to impossible that two different species of money, shall continue
equal in value to one another.
Every thing receives a value from its use, and the value is rated,
according to its quality, quantity and demand. tho’ goods of different
kinds are equal in value now, yet they will change their value, from
any unequal change in their quality, quantity, or demand.
And as he leaves it to choice of the debtor, to pay in silver-money
or bills; he confines the value of the bills, to the value of the
silver-money, but cannot confine the value of the silver-money to
the value of the bills: so that these bills must fall in value as
silver-money falls, and may fall lower: silver may rise above the value
of these bills, but these bills cannot rise above the value of silver.
What I shall propose, is to make money of land equal to its value; and
that money to be equal in value to silver-money; and not lyable to fall
in value as silver-money falls.
Any goods that have the qualities necessary in money, may be made money
equal to their value. 5 ounces of gold is equal in value to 20 lib.
and may be made money to that value. an acre of land rented at 2 bolls
of victual, the victual at 8 lib. and land at 20 years purchase, is
equal to 20 lib. and may be made money equal to that value, for it has
all the qualities necessary in money. but that acre of land cannot be
coin’d to the value of 50 lib. no more than the 5 ounces of gold. and
tho’ the 5 ounces of gold, the 20l. silver-money and the acre of land,
be now equal in value; yet they cannot well continue so: for as I have
shown already, any disproportion’d change in the quality, quantity, or
in the demand of either of them, will make the same quantity of the
one, equal to a greater or lesser quantity of the others. land is what
in all appearance will keep its value best, it may rise in value, but
cannot well fall: gold or silver are lyable to many accidents, whereby
their value may lessen; but cannot well rise in value.
CHAP. VII.
_The proposal with reasons for it._
To supply the nation with money, it is humbly propos’d, that 40
commissioners be appointed by parliament, answerable to parliament for
their administration, and the administration of the officers under
them: the nomination of these officers being left to the commissioners.
That the commissioners have power to coin notes: which notes to be
received in payments, where offer’d.
That a committee of parliament be appointed to inspect the management,
and that none of the commissioners be members.
That the commission and committee meet twice a year at Whitsunday and
Martinmass; their meetings, to begin 10 days before, and to continue 10
days after each term.
There are three ways humbly offer’d to the parliament, for giving out
these notes: they in their wisdom may determine which will be most safe.
1. To authorize the commission to lend notes on land security, the debt
not exceeding one half, or two thirds of the value: and at the ordinary
interest.
2. To give out the full price of land, as it is valued, 20 years
purchase more or less, according to what it would have given in
silver-money, the commission entring into possession of such lands, by
wadset granted to the commission or assigneys; and redeemable betwixt
and the expiring of a term of years.
3. To give the full price of land, upon sale made of such lands, and
disponed to the commission or assigneys irredeemably.
That any person shall have such bonds, wadsets, or estates assigned or
dispon’d to them, upon paying in the value to the commission.
That the commission don’t receive other money than these notes.
That no person who has contracted for these notes, shall be obliged to
receive silver or metal money.
That the commission have not power to coin more than 50000 lib. at
a time, and that no more be coin’d so long as there is 25000 lib.
remaining in the office.
That for a year and a half the commission be limited to a certain sum,
after that time to have power to coin what sums are demanded: unless
restricted by ensuing parliaments.
That these who desire to have money from the commission, give in a note
to the lawyers for the commission, a month before the term, of what
sums they want, with the rights of the lands they offer in pledge: and
that these who have notes to pay in to the commission, give warning 10
days before the term.
That the state of the commission, the sum of notes coin’d, the debt and
credit, with the highest number of the different notes, be publish’d
every term.
That any person who shall discover 2 notes of the same number, or of a
higher number than these publish’d, shall have a 100 lib. reward.
That the under-officers be intrusted with the sum of 20000 lib. to
change notes with; and that they attend the whole year.
That any member of parliament may inspect the state of the commission.
That no notes be coined, money lent, or rights assigned by the
commission, but at the terms of Whitsunday and Martinmass: and in
presence of at least 20 commissioners, and one third of the committee.
That the revenue of the commission, over what pays the charges, and
what part the parliament thinks needful to make good any losses
may happen to the commission, be applyed by way of drawback, for
encouraging the export, and manufacture of the nation.
That paper-money do not rise more than 10 per cent above silver-money;
so that he who contracts to pay in paper, may know what he is to pay in
case he cannot get paper-money.
The parliament may enter into a resolve, that the next sessions of this
or the next ensuing parliament, the state of the commission be taken
into consideration, preferable to all other business: and if found
hurtful to the country, the parliament may discharge any more notes to
be given out, and order what notes are then out to be called in.
That after 3 months from the date of the act, Scots and foreign money
be reduced to the English standard. the English crown to 60 pence, and
the other money in proportion to its value of silver. the 40 pence to
38 pence, the new mark to 13 pence 1/2, the old mark to its weight, the
ducatdowns to 68 pence, dollars to their weight. guineas not to pass 22
sh.
That after 4 months no Scots money, (except what shall be coined after
the act) nor any foreign money except the English money, be received in
any payments, or be sold as bullion but at the mint.
That for what old money or bullion is brought to the mint, the mint
return to the full value in new money of 12 pence, 6 pence, and 3
pence pieces; of eleven deniers fine, the 12 pence of 3 drops 3 grains
weight, the other pieces to weigh in proportion: the expence of coinage
to be payed out of the funds appropriated to that use.
That for 3 months, after the act, the new money pass for 13 pence, 6
pence half-penny, and 3 pence 1/4.
That after 3 months, bullion and wrought plate be of eleven deniers
fine, and 5 sh. and 2 d. the ounce of silver, gold not to pass 4 lib.
The paper-money proposed will be equal in value to silver, for it will
have a value of land pledg’d equal to the same sum of silver-money
that it is given out for. if any losses should happen, one 4th of
the revenue of the commission, will in all appearance be more than
sufficient to make them good.
This paper-money will not fall in value as silver-money has fallen, or
may fall: goods or money fall in value, if the increase in quantity,
or if the demand lessens. but the commission giving out what sums are
demanded, and taking back what sums are offered to be returned; this
paper-money will be keep its value, and there will always be as much
money as there is occasion, or imployment for, and no more.
If a contract for paper-money could be satisfied by paying the same
quantity of silver money, then that paper-money could not rise above
the value of silver, and would fall with it. but as the paper money is
a different species from silver, so it will not be lyable to any of the
changes silver money is lyable to.
Tho’ the parliament could give silver money to the people, in as great
quantity as there were occasion: the parliament could not justly know
what sum would serve the country, for the demand changes. if the
quantity of money is less than the demand, the landed man is wronged:
for a 100 lib. then being more valuable, will buy a greater quantity
of the landed mans goods. if the quantity of money is greater than
the demand, the money’d-man is wronged, for a 100 lib. then is not so
valuable, so will not buy the same quantity of goods a 100 lib. bought
before.
If the commission do not give out money when it is demanded, where good
security is offer’d; ’tis a hardship on the person who is refused, and
a loss to the country: for few if any borrow money to keep by them; and
if employ’d it brings a profit to the nation, tho’ the employer loses.
If the commission did not take back what sums were offer’d to be
return’d, it were a hardship on the money’d man, who has a sum payed
him, and does not know how to employ it; and the quantity being greater
than the demand for it, would fall in value.
After the method propos’d, the quantity being always equal to the
demand for it, it will keep its value, and buy the same quantity of
goods 50 years hence, as now: unless the goods alter in their value,
from any change in their quantity, or in the demand for them.
Suppose this commission had been establisht 200 years ago, land then at
14 years purchase, money at 10 per cent, victual at 8 shil. and 4 pence
the chalder, and paper money to have been given out upon land; 8 shil.
and 4 pence of that paper money, would now have been equal to a chalder
of victual, and to 8 lib. 6 sh. and 4 pence silver-money: because
silver-money having increas’d in quantity, more than the demand; and
having been alter’d in the denomination, has fallen to one 20th of the
value it had then. nor would the landed-man have receiv’d less for his
victual, than now; for that paper-money would have bought him 20 times
the quantity of goods, silver-money will buy.
Land has a more certain value than other goods, for it does not
encrease in quantity, all other goods may. the uses of goods may be
discharged, or by custom be taken from them, and given to other goods:
the use of bread may be taken from oats, and wholly given to wheat:
the use of money may be taken from silver, and given to land: the use
of plate, and the other uses of silver as a metal, may be taken from
silver, and given to some other metal, or some mixture that may be more
fitted for these uses. in any of these cases, these goods lose a part
of their value, proportion’d to the uses are taken from them: but land
cannot lose any of its uses. for as every thing is produced by land,
so the land must keep its value, because it can be turn’d to produce
the goods that are in use. if wheat is more us’d, and oats less, as the
land can produce both, it will be turn’d to produce what is most used,
because most valuable.
This money will not receive any additional value from being used as
money, so the receiver will be certain he can be no loser, tho’ after a
term of years the use of money is taken from it. the land will receive
an additional value, from being used as the pledge upon which the money
is issued; and that additional value would be greater than what silver
received: because, tho’ land be used as the pledge to issue out money
upon, yet none of its other uses would be taken from it: silver cannot
be us’d as money and plate at the same time. but as land is in greater
quantity than there will be occasion for to give out money upon; so
the additional value it receives, will not be near so great as that
silver-money has receiv’d.
Suppose the additional value land received were one 4th, land now at 20
years purchase, would then be at 25 years purchase. if the parliament
call’d in the paper money, he who had paper money could be no loser by
it, tho’ the land lost the additional value; for no more of it is given
out than the value of the land abstract from its use as money. whereas
if silver was no more used as money, he who had silver, would lose a
half, or 2 thirds; silver falling then to its value as a metal.
So that this paper money propos’d, having a better value than silver;
and receiving no addition to its value, from being used as money; and
not being lyable to any change in its value, the quantity and demand
encreasing and decreasing together: it is so far more qualified to be
the measure by which goods are valued, the value by which goods are
exchanged, and in which contracts are made payable.
The other qualities necessary in money, are,
1. Easy of delivery.
2. Of the same value in one place to what it is in another.
3. To be kept without loss or expence.
4. To be divided without loss.
5. To be capable of a stamp.
Paper money has these qualities in a greater degree than silver.
1. It is easier of delivery: 500 lib. in paper may be payed in less
time, than 5 lib. in silver.
2. It is nearer the value in one place to what it is in another, being
of easier carriage.
3. It can be easier kept; taking up less room. and without loss;
because it may be exchanged at the office. the consumption of paper is
not of so much value as the consumption of silver: the consumption of
the paper is a loss to the office, the consumption of silver is a loss
to the owner.
4. It can be divided without loss: because it may be changed for lesser
notes at the office.
5. It is capable of a stamp, and less liable to be counterfeit.
The practice of most trading nations confirms, that paper is more
qualified for the use of money, than silver; providing it hath a value.
in Holland silver is pledg’d, and paper is used as money. that land
pledg’d is a better value than silver pledg’d, is evident from what has
been said. in England, before the bank was set up, gold-smiths notes
were received in payments preferable to gold or silver: which shows
that paper money had all the qualities necessary in money, so much more
than gold or silver, as to equal the danger of a gold-smith’s breaking,
of which there were many examples. Mr. Lock, pag. 7th on interest of
money, says, that one gold-smith’s credit (being usually a note under
one of his servants hands) went for above eleven hundred thousand
pounds at a time.
The notes of the bank in Scotland went, tho’ there was no money in the
bank, and tho’ their acceptance was voluntary. the security for the
paper propos’d will be as good, the administration may be more safe
and satisfactory than that bank, or any other private bank; because it
is more public, and the commission has not any share of the profits.
besides it will not be liable to the hazard banks are liable to, from
the sale of shares.
And it seems strange that the administration of such a commission
should be doubted, when the parliament has the nomination of the
managers; when the managers are to be accountable to the parliament;
when the trust is to be so small, for more notes cannot be coin’d so
long as 25000 lib. is in the office; a committee of parliament is to be
appointed to inspect the management, the books are to be open to the
inspection of any member of parliament, and the state of the commission
is to be published in print.
Since the notes of the bank went upon a voluntary acceptance, tho’
there was no money in bank; ’tis reasonable to think the paper money
propos’d will at least have the same currency: being current by law
does not make it less valuable. he who took bank notes, could not be
sure the bank would be in a condition to give money for them; and
the person he was to pay money to, might refuse them: so he was more
uncertain, than if they had been current by law.
The silver money being to fall betwixt 8 and 9 per cent in 3 months,
it is not to be suppos’d that silver will be prefer’d to paper money;
since the notes of the bank, which is paper upon the same fund, went
at the ordinary interest: and tho’ the receiver was not certain of the
money at the time it was promised, or that the person he was owing to
would receive it.
It may be objected, that paper went because silver could be got for it
when demanded, or at a certain time.