security pledg’d for that paper money, was silver. the security pledg’d
for this paper money, is land. this money has no relation to gold or
silver, more than to other goods. and it were more extravagant to say,
I won’t take a 100 lib. of such paper money for the goods I sell,
because I am not sure if 6 months hence it will buy me such a quantity
of silver; for silver may grow dearer: as it would be to say now, I
won’t take a 100 lib. in silver for the goods I sell; because I am not
sure if 6 months hence, it will buy me such a quantity of wine, for
wine may grow dearer.
4 Crowns won’t buy a guinea, tho’ they were coin’d for the same value;
nor won’t buy the 10th part of goods 4 crowns bought 200 years ago,
yet silver is received as a value, and contracted for, tho’ its value
lessens every year, and tho’ ’tis not perhaps worth above a third of
what ’tis given or contracted for, abstracted from the use of money.
this paper propos’d will not only keep its value; the encrease of the
quantity depending on the demand, and the quantity decreasing as the
demand decreases: but likewise the land pledg’d is as valuable as the
paper given out, abstract from its use as money, and encreases in value.
The objection may be made against silver money, and with good reason;
for it falls faster in its value than other goods, and may soon be
reduced to its value as a metal.
The paper money propos’d is equal to its self; but to continue equal
to such a quantity of any other goods, is to have a quality that no
goods can have: for that depends on the changes in these other goods.
it has a better and more certain value than silver money, and all the
other qualities necessary in money in a much greater degree, with other
qualities that silver has not, and is more capable of being made money
than any thing yet known. land is what is most valuable, and what
encreases in value more than other goods; so the paper money issued
from it, will in all appearance not only keep equal to other goods, but
rise above them.
Because of the extraordinary scarcity of silver in Scotland, and the
inclination people have to it, from its having been long used as money;
it may be necessary to restrict its price to 5 sh. and 2 pence the
ounce: but it will soon fall from that value of paper, if it come in
greater quantity into Europe, than is exported or consum’d.
Suppose an island belonging to one man, the number of tenents a 100,
each tenent 10 in family, in all a 1000; by these the island is
labour’d, part to the product of corns, the rest for pasturage: besides
the tenents and their families, there are 300 poor or idle, who live
by charity. there is no money, but rents are paid in kind, and if one
tenent has more of one product, and less of another than his family has
occasion for, he barters with his neighbour.
The people of this island know nothing of manufacture; the island being
plentiful, furnishes enough for their consumption, and an overplus
which they exchange on the continent for cloaths, and what other goods
they want: but as that overplus is only sufficient to make a return
of such a quantity of goods as they consume yearly, so they have no
magazines of their own or foreign goods to serve them in bad years, nor
no magazines of arms, ammunition, &c. for their defence.
’Tis propos’d to the proprietor, that if a money were establish’d
to pay the wages of labour, the 300 poor might be imployed in
manufacturing such goods as before were exported in product; and as
the 1000 that labour the ground were idle one half of their time, they
might be imployed so as their additional labour would be equal to that
of 500 more, which would lessen their import by providing them with a
part of such goods as before they brought from the continent, and raise
their export to 3 or 4 times the value it had: the return of which
would furnish them with greater quantities of foreign goods than they
wanted for consumption, which might be laid up in magazines.
The money propos’d is after this manner. the proprietor to coin pieces
of paper figured number 1, number 2, and so on; number 4 to be equal
to a certain measure of corn. the poor and other labourers would be
satisfied to take number 4 for the wages of a day’s labour, providing
it be so contriv’d that number 4 purchase them the measure of corn;
for as that corn can be barter’d with other goods, so number 4 would
purchase an equal value of any other goods.
To make number 4 equal to that measure of corn, the proprietor calls
his tenents together; tells them for the future, he will have his rent
payed in paper, so renews their leases, and where a 100 measures of
corn was payed, they oblige themselves to pay him number 400. the other
kinds the proprietor was payed in are valued, according to the value
they had in barter with corn; and leases made for paper.
The proprietor coins paper to the value of a year’s rent, imploys
such as are willing to work, and gives them paper-money as the price
of their labour. the tenent gives corn or any other goods he has to
the labourers for paper-money, and the proprietor receives it for his
rent. but as the consumption of the labouring man may be suppos’d to
be only equal to number 2; so the tenents cannot get the whole sum
issued by the proprietor, and consequently not enough to pay their
rent. if this were not remedied, the labouring men being masters of
the remaining part of the paper, and having no occasion for more goods
from the tenents, might raise the value of the paper. to prevent this,
the proprietor coins a greater quantity, which brings a part of the
poor and idle of the continent to the island, and occasions a greater
consumption, whereby the tenents are able to pay their rent in paper
as contracted for. the addition to the people is an advantage to the
island; for it adds to the power of the island, and their labour is
worth double what they consume.
This money tho’ it has no value but what the proprietor gives it, by
receiving it in payments of his rent; yet it will be esteem’d equal to
the product payed before.
If the proprietor would give it a value in land, computing after this
manner: an acre of land pays number 100, at 20 years purchase worth
number 2000. and dispone the property of land for paper at that value;
who would not be satisfied to receive or contract for that money,
since it not only bought the product, but the property of land at a
reasonable price?
Money is not the value for which goods are exchanged, but the value by
which they are exchanged: the use of money is to buy goods, and silver
while money is of no other use.
Tho’ silver were our product, yet it is not so proper to be made money
as land. land is what produces every thing, silver is only the product.
land does not increase or decrease in quantity, silver or any other
product may. so land is more certain in its value than silver, or any
other goods.
Land is capable of improvement, and the demand for it may be greater;
so it may be more valuable. silver cannot be suppos’d to be apply’d
to any other uses, than it is now apply’d to; or that the demand will
encrease more than the quantity.
Land cannot lose any of its uses, so will not be less valuable; silver
may lose the use of money it is now apply’d to, so be reduc’d to its
value as a metal.
It may likewise lose a part of its uses as a metal, these uses being
supply’d by other goods: so loses a part of its value as a metal. but
nothing can supply the uses of land.
Land may be convey’d by paper, and thereby has the other qualities
necessary in money, in a greater degree than silver.
Land has other qualities fitting it for the use of money, that silver
has not.
Land apply’d to the use of money, does not lose any of the other uses
it is apply’d to: silver cannot serve the use of money, and any of its
other uses as a metal.
Trade and money depend mutually on one another; when trade decays,
money lessens; and when money lessens, trade decays. power and wealth
consists in numbers of people, and magazines of home and foreign goods;
these depend on trade, and trade on money. so while trade and money
may be effected directly and consequentially; that which is hurtful to
either, must be so to both, power and wealth will be precarious.
If a money is establish’d that has no intrinsick value, and its
extrinsick value to be such, as it will not be exported; nor will not
be less than the demand for it within the country: wealth and power
will be attained, and be less precarious. money not being liable to be
lessen’d directly, nor consequentially; and trade not liable to decay
consequentially. so the power and wealth of that country will only be
precarious, from what may be directly hurtful to trade.
The paper money propos’d being always equal in quantity to the demand,
the people will be employ’d, the country improv’d, manufacture
advanc’d, trade domestick and foreign will be carried on, and wealth
and power attained. and not being liable to be exported, the people
will not be set idle, &c. and wealth and power will be less precarious.
From whence it is evident, that land is more qualified for the use of
money than silver; and preferable for that use tho’ silver were the
product of Scotland: being more certain in its value, and having the
qualities necessary in money, in a greater degree: with other qualities
that silver has not; so more capable of being the general measure by
which goods are valued, the value by which goods are exchanged, and in
which contracts are taken.
If 2000 lib. of paper money, is equal to the property of land worth
2000 lib. in silver; then that 2000 lib. of paper money, is equal to
2000 lib. of silver.
What buys land, will buy every thing the land produces; and what buys
the product of land, will buy all other goods whether home or foreign.
if wine is brought from France, the merchant designs to lay out his
money on goods, at interest, or on land: the commission does not
receive silver money, so he cannot have a bond from the commission,
unless he give the value in paper; and many of the landed men won’t
take silver for their goods or lands, having occasion for paper to pay
the commission. so the merchant will choose to sell his wines for paper
money, because it will purchase him goods, bonds or lands where silver
money will, being equally valuable: and in cases where silver money
will not.
And this is supposing silver were equally qualified for the use of
money, as land is. but as silver is an uncertain value, and is given
for much more than its value as a metal; and has not all the qualities
necessary in money, nor in so great a degree as paper money: so paper
money will for these other reasons be prefer’d to silver.
Some object that a paper money tho’ upon a good fund, and current in
the country; yet will not be valued abroad, equal to what it were in
Scotland.
The goods of Scotland will always be valued abroad, equal to goods of
the same kind and goodness; and that money tho’ of paper, which buys
goods in Scotland, will buy goods or money in other places. if a 1000
lib. in serges, linen cloth, &c. be worth abroad all charges payed 1300
lib. the merchant who exports such goods, will give a bill for that
money at the par, having 1300 lib. for what cost him a 1000.
When a nation establishes a money, if the money they set up, have a
value equal to what it is made money for, and all the other qualities
necessary in money; they ought to have no regard what value it will
have in other countries. on the contrair, as every country endeavours
by laws to preserve their money, if that people can contrive a money
that will not be valued abroad; they will do what other countries have
by laws endeavour’d in vain.
No nation keeps to silver because it is used in other countries, it is
because they can find nothing so safe and convenient. trade betwixt
nations is carried on by exchange of goods, and if one merchant sends
out goods of a less value, than he brings home; he has money furnish’d
him abroad by another who brings home for a less value than he sent
out: if there is no money due abroad, then the merchant who designed
to import for a greater value than he exported, is restricted; and can
only import equal to his export, which is all the many laws to regulate
trade have been endeavouring.
It is objected that we are under a necessity of having goods from
countries who will take none of ours. France does not allow money to
be exported, nor any ship to import goods, unless French goods are
exported from the same port, to the value of the goods which were
imported. by our law we are forbid to export money. but as I don’t
think the example of nations a good answer, I shall endeavour to give
a better. suppose our money is not valued abroad, and we have occasion
for goods from Denmark, who takes none of ours. these goods being
necessary here, will be valued higher than other goods that are not so
necessary; and the value of Scots goods sold in other countries, will
be carried to Denmark, in such goods as will sell there, or in foreign
money, and these necessary goods be brought home: because the trader
makes a greater profit by them, than by such goods as could have been
imported from that country, where the goods exported were sold.
But as this addition to the money will employ the people who are now
idle, and these now employ’d to more advantage: so the product will be
encreas’d, and manufacture advanc’d. if the consumption of the nation
continues as now, the export will be greater, and a ballance due to us:
and as the exchange depends on the ballance, so paper money here, will
be equal to a greater quantity of silver money abroad.
Suppose the yearly value of Scotland a million and a half, the yearly
value of England 40 millions; the value of Scotland, is only about one
28th part of the value of England. yet the quantity and quality of the
lands, and the numbers of people consider’d; Scotland will be at least
as 1 to 6. and if there was money to employ the people, we would be
as one to 6; for we have advantages peculiar to us, that do more than
equal the Plantation and East-India trades.
England is not improv’d so far as it might be, by a greater quantity of
money. we may have money equal to the demand, by applying our land to
that use. so our country may be improv’d above the proportion of one to
6. but if the propos’d addition to our money, improved the country only
so as to bear a proportion with England of one to 13, our yearly value
would be 3 millions: and our consumption not being half what the same
number of people consume in England; if the consumption continued as
now, the ballance due to Scotland would be greater, than the ballance
due to England.
This addition to our yearly value may be thought by some people, a
supposition that’s extravagant, but I desire these people will consider
what consequences the plenty of money has had in other places. as the
money of England has increas’d, the yearly value has increas’d; and as
the money has decreas’d, the yearly value has decreas’d.
I don’t doubt but the paper-money propos’d being given out equal to
the demand, would bring the yearly value of Scotland to 3 millions,
tho’ the fishing and other branches of foreign trade (which might be
improv’d to great advantage) were neglected. but suppose the yearly
value increas’d only half a million, of which a 4th spent in a greater
consumption of the product and manufacture of the country, a 4th in the
greater consumption of foreign goods and expence abroad, a 4th laid up
in magazines of foreign goods, a 4th would still be due of ballance and
brought home in silver.
If the consumption and expence increas’d equal to, or beyond the
improvement; as the paper-money could not be exported, so the people
would not be set idle, nor the manufacture decay: that money being like
an estate intail’d. we might continue to consume equal to the yearly
value, but could not lessen the yearly value, nor be poorer if we would.
If a greater value of goods was imported than was exported, and credit
given for the ballance; foreigners to pay themselves, would send a
lesser value of goods the year after. but such restrictions may be put
on the consumption of our own and foreign goods, as may make a ballance
due.
The revenue of the commission will be a great help toward the
advancing our trade in its infancy: what encourages the export of
goods, encourages the manufacture of them; and that money given as a
draw-back, will not only encourage the export and manufacture; but
likewise regain the reputation our goods have lost, and give them a
better reputation than the goods of other nations.
The draw-back ought not to be given to all goods, but to such as do not
yield a reasonable profit abroad, and upon condition they are found
sufficient.
The seal of the office of draw-back ought to be apply’d to these goods
that receive the draw-back; and these intrusted with the draw-back,
should give security to pay the price of such goods, with all charges,
if found insufficient.
When manufacture and trade prospers, the landed man’s rent is well
payed, and increases: when they decay, his rent is ill pay’d, and
decreases. a draw-back is so effectual a way to encourage and promote
manufacture and trade; that it were the landed men’s interest to tax
themselves, rather than a draw-back should not be given, where it is
necessary.
A draw-back is more necessary here than in other countries, for we do
not manufacture so well as other nations: we are not able to sell for
the same profit, our stocks being much smaller; and the goods of other
nations will be preferr’d to ours, because our goods are suspected.
Some object that this proposal is new, and has not been practis’d in
any nation.
The example of another nation ought not to determine us, to follow the
same measures, without examining whether that nation was the better or
the worse by such measures; and whether our circumstances and theirs
don’t differ so, as to make that hurtful or ineffectual to us, which
was of advantage to them. on the other hand, it is no argument against
any thing propos’d for the general good, to say it is new, and what has
not been practis’d.
When any thing propos’d has been already practis’d by other nations,
’tis a presumption in favours of such a proposal; and it’s a
presumption against it, if it has been refused: but a wise nation ought
not to be determined by example, to follow or refuse without examining.
This proposal has not been refus’d. the essential part is now practis’d
in France, for paper is current by law: and tho’ after a manner that
in all appearance ought to have hindred its currency, yet I’m inform’d
foreign bills are bought with paper money, the same as with silver or
gold.
The example of nations in relation to money would be a very uncertain
rule. for as has been said page 70, opposite measures have been us’d in
some countries to what have been used in others, and contrary measures
have been used in the same countries to what was used immediately
before, not because of any difference in their circumstances, but from
the opinion, that since the method used had not the effect design’d, a
contrary would; and there are good reasons to think that the nature of
money is not yet rightly understood.
Any other objections that I have yet heard against this proposal, are
such as may be fully answered, and so far as I can see into it, with
all the application I have been capable of, I cannot find any objection
but what may be fully answer’d; nor any difficulty in the execution,
but what may be removed: if there is any fallacy in the positions I lay
down, or any wrong consequences drawn from these positions, I have not
been able to discover them.
CHAP. VIII.
_The low condition this country is reduced to, notwithstanding its
natural advantages._
The natural advantages the Dutch have for trade, are, their situation
at the mouths of the rivers of Germany, and being near the bulky trade.
Their natural disadvantages are, smallness of territory, barrenness of
soil, producing little but what’s forc’d; want of mines; long winters;
unwholsome air; marishy, so oblig’d to great expence for foundation
to their buildings, in making and keeping up the high-ways, and in
draining the country yearly; a dangerous coast; difficult entry to
their rivers; the sea to defend against on one side, and powerful
neighbours on the other; and heavy taxes, the consequence of these
other disadvantages.
Yet they have so improv’d their few advantages, that they are become
a rich and powerful people. what has contributed to their riches and
power, was the early protection and favour the government gave to
trade; the liberty which was given to people of different religions;
the freedom of trade allowed to strangers; the example of their rulers
in oeconomy; but chiefly the neglect of trade in other countries,
particularly in Spain, who forced the people and trade of Flanders to
Holland.
Scotland has by nature many advantages for trade; a large territory;
of easie defence; plenty of people; a wholsome air; mines; a proper
situation for the eastern and western trades; near the bulky trade; a
safe coast; rivers of easie entry; the seas and rivers stockt with fish.
But numbers of people, the greatest riches of other nations, are
a burden to us; the land is not improv’d, the product is not
manufactur’d; the fishing and other advantages for foreign trade are
neglected: and the reason generally given is, that laziness and want of
honesty are natural to us.
If want of honesty and laziness were natural, they would be so to
mankind; or if peculiar to a people, this would be so to the Dutch
rather than to us: the air of Holland is grosser which inclines to
laziness; and the country not producing wherewith to maintain the
inhabitants, would force them to rob or cheat their neighbours, or
one another. but it is more reasonable to think laziness and want
of honesty are vices, the consequences of poverty; and poverty the
consequence of a faulty administration. if the same measures had been
taken in Scotland for encouraging trade, as was taken in Holland, we
had been a more powerful and richer nation than Holland. if Spain,
France and Britain, or any one of them had apply’d to trade, as early,
and upon the same measures Holland did; Holland would not have been
inhabited. but by their early application, and the wrong measures of
other countries, they have got such great magazines of what’s necessary
for their maintenance and defence; of rich commodities to sell to other
nations, of materials for shipping, &c. and such a quantity of silver,
esteem’d above its value as a metal by being used as money: that in
all appearance so long as silver is used as money, the great quantity
they have of it, with their great oeconomy, enabling them to under-sell
other nations; they will maintain the rank they hold in trade, and
consequently in power; notwithstanding their natural disadvantages, the
present application, and natural advantages of other nations.
This country is more capable of an extended trade than any other
country of Europe, yet it is reduc’d to a very low state. trade is
ruin’d; the national stock is wasted; the people forsake the country;
the rents of land are unpay’d; houses in towns, and farms in the
country are thrown upon the owners hands; the creditor cannot have the
interest of his money to live upon; and the debitor’s person and estate
are expos’d to the law.
The landed man, by having engaged his person and estate for the payment
of a species, which is not in his power to perform; and having no
alternative: by the law his person is at the mercy of the creditor, and
his estate to be sold for so much of that species as it will yield. if
2 or 3 money’d men call in their money, with a design to force their
debitors to part with their estates, at what prices they please to
impose: they may bring the price of land to 15 or 10 years purchase.
for they would not take bonds in payment, and few or none would be in a
condition to buy with money.