Part 4

Such a regulation will have its difficulties. 1. to discharge all or a great part of the import, will lessen considerably the revenue of the crown; and her majesty may not think good to give the royal assent to such a regulation, unless an equivalent be given. 2. such a regulation would not be so strictly kept, but a part of what was used to be imported would be stole in. 3. the residence of our princes being in England, we are under a necessity of having a ministry there: imployments being at the disposal of the prince, and London being a place of more diversion than Edinburgh, the gentry will continue to go to London for places or pleasure.

But allowing the royal assent were given to such a regulation; either with or without an equivalent; and the regulation could be so strictly kept, that nothing were imported contrair to that law; and allow 20000 lib. could be saved of the expence in England, so that the import and expence abroad should be 60000 lib. less than last year: yet there are other difficulties, that I fear will make the regulation ineffectual.

1. Suppose the ballance last year due by us was 20000 lib. the import and expence abroad lessened 60000 l. these who propose this regulation may think a ballance will be due to us of 40000 lib. but as the bank may have supplyed us with 60000 lib. of notes, more than the money in bank: and as 20000 lib. is supposed to have been exported last year: so our money being lessened 80000 lib. the next year’s export may be so much less valuable, the want of that money having set idle a part of the people were then imployed: and a greater ballance be due than last year, notwithstanding of the regulation.

2. 40000 lib. first cost of goods imported, and 20000 lib. spent abroad, lessened the consumption of the goods of the country; and the export was by so much greater, as the consumption of the goods of the country was lessened. but this regulation occasioning a greater consumption of the goods of the country, the export will be less.

3. Several merchants may have exported goods, tho’ they had not much profit upon the export of them; but because of the profit to be made upon the import; which being lessen’d, may likewise lessen the export.

4. If Scotland discharge or put a very high duty on the goods of other nations, other nations may discharge Scots goods.

Allowing there were no difficulties in regulating the ballance of trade, and that the same measures were followed as are followed in Holland; we would grow richer, but their riches would increase in the same proportion: and 50 years hence Scotland would be as poor as now, in comparison with Holland.

If two countries equal in their product, people, &c. the one with a 100000 lib. of money, and living within its yearly value; so that the first year a ballance is due of 20000 l. the second year of 25000 lib. and so on. the other country with 20 millions of money, and consuming more than the yearly value; so that a million is sent out to pay the ballance, the second year 1200000 lib. and so on. this country will be soon poor, and the other be soon rich: but if that people who has 20 millions of money, will retrench in proportion to the other; they will be rich and powerful in comparison with the other.

Considering how small a share we have of the money of Europe, and how much trade depends on money: it will not be found very practicable to better our condition, but by an addition to our money. or if it is practicable without it, it is much more so with it.

The bank will add little to the money; for as credit is voluntary, it depends on the quantity of money in the country. and tho’ the bank had never failed, yet it could not have kept its credit much longer. because, the quantity of money in Scotland is not sufficient to give a circulation to such a sum of notes, as will pay the charges of the bank, and the interest to the owners.

’Tis thought the proprietors of the bank design to apply to the parliament for further priviledges: but as their design is not yet made publick, I shall only say in general, that if other priviledges are to be given, then it is not the same bank; at least not on the same establishment it was: in either of these cases, every person should be allowed to share in it.

When a bank is establish’d every person may have a share, upon the terms of the act of parliament; and he that offers first is preferred. suppose upon the setting up of the bank, A. B. and C. did not subscribe to it, because they thought the establishment not favourable enough: so long as they who did subscribe can support the bank upon the terms of the act of parliament, none will pretend to any share in it; unless the subscribers are pleased to sell. but if other priviledges are given, A. B. and C. as any others of the country may desire the books to be opened, that they be allowed to share in it; and any other set of men who offer the same security, may at the same time be allowed to set up a bank with the same priviledges: so every shire in Scotland will desire one. and if new priviledges are given to this bank, it were a hardship to refuse the same to others, who are able and willing to give the same security, especially when the nation stands in need of more money than this bank would be allowed to give out.

CHAP. V.

_That any measures proposed for increasing the silver money or establishing a credit promising a payment of silver money are ineffectual. that silver money has fallen much from the value it had. that land is of greater value. that silver may lose the additional value it received from being used as money._

National power and wealth consists in numbers of people, and magazines of home and foreign goods. these depend on trade, and trade depends on money. so to be powerful and wealthy in proportion to other nations, we should have money in proportion with them; for the best laws without money cannot employ the people, improve the product, or advance manufacture and trade.

The measures have been used to preserve and increase money, or such as are now proposed, are attended with difficulties; and tho’ the difficulties were removed, are ineffectual, and not capable to furnish money so as to improve the country, or extend trade in any proportion to the improvements and trade of other nations.

Credit that promises a payment of money, cannot well be extended beyond a certain proportion it ought to have with the money. and we have so little money, that any credit could be given upon it, would be inconsiderable.

It remains to be considered, whether any other goods than silver, can be made money with the same safety and convenience.

From what has been said about the nature of money, chap. 1. it is evident, that any other goods which have the qualities necessary in money, may be made money equal to their value, with safety and convenience. there was nothing of humour or fancy in making silver to be money; it was made money, because it was thought best qualified for that use.

I shall endeavour to prove, that another money may be establisht, with all the qualities necessary in money in a greater degree than silver; with other qualities that silver has not: and preferable for that use, tho’ silver were the product of Scotland. and that by this money, the people may be employed, the country improved, manufacture advanced, trade domestick and foreign be carried on, and wealth and power attained.

What I propose, will I hope be found safe, and practicable; advantageous in general to Scotland, and in particular to every Scots-man.

But as I offer to prove, that what I shall propose is more qualified for the use of money than silver: so before I come to the proposal, I shall shew some defects in silver money; and that it has not, nor does not answer the design of money.

Money is the measure by which goods are valued, the value by which goods are exchanged, and in which contracts are made payable.

Money is not a pledge, as some call it. it’s a value payed, or contracted to be payed, with which ’tis supposed the receiver may, as his occasions require, buy an equal quantity of the same goods he has sold, or other goods equal in value to them: and that money is the most secure value, either to receive, to contract for, or to value goods by; which is least liable to a change in its value.

Silver money is more uncertain in its value than other goods, so less qualified for the use of money.

The power the magistrate has to alter the money in its denomination or fineness, takes away the chief quality for which silver was made money. in countries where the money is often changed in the denomination or fineness, ’tis more uncertain to contract for money, than it was in the state of barter to contract for goods. if a 100 ounces of silver are lent, or contracted for, and a bond given for them denominat pounds, payable in a year: in that time half a crown is raised to a crown, and 50 ounces pays the 100 lent, or contracted for.

Tho’ the magistrate did never alter the money in its denomination or fineness, yet it is more uncertain in its value than other goods.

Goods of the same kind and quality differ in value, from any change in their quantity, or in the demand for them: in either of these cases goods are said to be dearer, or cheaper, being more or less valuable, and equal to a greater or lesser quantity of other goods, or of money.

Silver in bullion or money changes its value, from any change in its quantity, or in the demand for it: in either of these cases goods are said to be dearer, or cheaper; but ’tis silver or money is dearer or cheaper, being more or less valuable, and equal to a greater or lesser quantity of goods.

Perishable goods as corns, &c. increase or decrease in quantity as the demand for them increases or decreases; so their value continues equal or near the same.

More durable goods as mettals, materials for shipping, &c. increase in quantity beyond the demand for them, so are less valuable.

Silver or money increases in quantity by so much as is imported to Europe, more than is consumed or exported. the demand has encreased, but not in proportion to the quantity; for, 1st. the same quantity of silver or money, won’t purchase the same quantity of goods as before. 2dly. 10 per cent was payed for the use of it; now ’tis to be had at 6, in Holland at 3 or 4.

An ounce of silver being worth 5 sh. and 2 pence, and a crown worth 60 pence, unless altered by the prince, makes most people insensible of any change in the value of silver or money: but as one year the boll of barley is sold for 2 crowns, and the year after for 3; this difference comes from a change in the quantity or demand of the barley, or of the money: and that of the money will occasion a difference in the price, as well as that of the barley.

If last year a 100 sheep were sold for a 100 crowns, and the person sold them desires this year to buy the same number of sheep; tho’ the quantity of the sheep, and the demand for them be the same as last year: yet if the money is increased in quantity, and the demand for it not increased in proportion, the 100 sheep will be equal in value to more money than the year before, so the money is cheaper. if the quantity of the money, and the demand for it be the same as before; yet if the sheep are lesser in quantity, or the demand for them greater: the 100 sheep will be equal to a greater quantity of money, so the sheep are dearer.

So tho’ the magistrate did never alter the money, yet ’tis liable to a change in its value as silver; from any change in its quantity, or in the demand for it: and the receiver is doubly uncertain whether the money he receives or contracts for, will, when he has occasion, buy him the same goods he has sold, or other goods equal in value to them; because of the difference may happen in the value of the money, or the goods he is to buy.

And this uncertainty is, tho’ both money and goods were certain in their quality.

The difference of the prices of most goods, from changes in their quantity, or in the demand for them, would be much prevented, if magazines were kept; but the difference in their prices from the greater or lesser quantity of, or demand for money; cannot be prevented so long as silver is the money.

That money is of much lesser value than it was; will appear by the value goods, land, and money had 200 years ago.

By the acts of the council of Edinburgh, it appears, that anno 1495, the fiars for wheat was 6 sh. and 8 pennies Scots money the boll.

Anno 1520, claret and white French wines were ordered to be sold in the taverns at 6 pennies Scots the pint, and ale at 20 pennies Scots the gallon.

Anno 1526, the milns belonging to the town were lett for 400 merks Scots, now they give 13000.

The petty customs at Leith then lett for 115 merks.

Anno 1532, the load of malt containing 9 firlots, was ordered to be sold at 32 sh. Scots the load.

Anno 1551, ordered that the best mutton bulk be sold for 12 pennies Scots, the 2d. sort for 10 pennies, and the worst sort for 8 pennies.

Anno 1553, the 9 firlots of malt old measure, with the charity, is ordered to be sold for 36 sh. Scots. the landwart bread to weigh 40 ounces, and the townbread 36 ounces the 4 penny or plack loaf.

Anno 1555, the bakers are ordered for each boll of wheat, to deliver 7 score loafs, at 16 ounces the loaf.

By an act of the 5th parliament of Queen Mary, anno 1551. ’tis ordained, that wines imported upon the east and north coast, should not be sold dearer than 20 lib. Scots the tun of Bourdeaux wine, and 16 lib. the tun of Rochel wine. the pint of Bourdeaux wine 10 pennies, and the pint of Rochel wine 8 pennies. and that wine imported upon the west coast, be sold no dearer than 16 lib. Scots the tun of Bourdeaux wine, and 12 or 13 lib. the tun of Rochel wine. 8 pennies the pint of Bourdeaux wine, and 6 pennies the pint of Rochel wine.

So that what 5 lib. bought 200 years ago, will not be bought now for a 100 lib. nor were goods in greater plenty, or of less value than now: on the contrair, as these acts were made to regulate the prices of goods, ’tis reasonable to think they were in lesser quantity than now, proportioned to the demand, so of more value. but money having increased in quantity, more than in demand, and having been altered by the prince; is fallen in value: and a 100 lib. now is not worth what 5 lib. was worth before.

Land may be computed to have been improved in 200 years, that what pays now two bolls the acre, payed then but one boll: which may be known from old rentals.

Money gave then 10 per cent interest, and as 384 acres, rented at a boll the acre, victual at 8 sh. and 4 d. the chalder; so the property of these acres was equal to, or worth a 100l. for a 100 lib. gave 10 lib. interest, and the 384 acres payed only such a quantity of victual, as was sold for 10 lib. but as land (being preferable to money for many reasons) is valued now at 20 years purchase, tho’ money is at 6 per cent: so that land then may have been valued 14 years purchase or 140 lib.

As the quantity of money has increased since that time, much more than the demand for it; and as the same quantity of silver has received a higher denomination, so of consequence money is of lesser value: a lesser interest is given for it: A greater quantity of it is given for the same quantity of goods, and the land is worth more years purchase.

The value of such land now, the acre rented at 2 bolls, victual at 8 lib. 6 sh. and 6 pence, money at 6 per cent, so land at 20 years purchase, would be 8000 lib. by this computation money is only worth the 20th part of goods, and the 57th part of land, it was worth 200 years ago. part of this difference is from the improvement made on land, and the greater demand for land, the quantity being the same, whereby its value is greater: the rest of the difference is, from the money being more encreased in quantity, than in demand, whereby its value is lesser, and its use lower: as likewise from its being altered in the denomination.

There was then a greater quantity of silver in the same number of pence than there is now: which appears by several acts of parliament made about that time.

Anno 1475, in the 8 par. of K. James the 3. the ounce of silver was ordered to be sold for 12 sh. Scots, and 12 groats was made of the ounce of silver.

The 3d. of November 1554, by an act of the town-council of Edinburgh, the ounce of silver was ordered to be sold at 18 sh. and 8 pennies Scots; but these acts do not mention the fineness the silver was of. suppose the same number of pence had twice or 4 times the value of silver in them that they have now: then silver is only fallen to one tenth, or one fifth of the value it had to goods; and to one 28th, or one 14 of the value it had to land. but still money is fallen to one 20th of the value it had to goods, and to one 57th of the value it had to land.

The manner of lending money in France, and I suppose in other Roman Catholick countries; is by way of perpetual interest, redeemable by the debitor, and which the creditor may dispone or assign, but can never demand the principal. and it is usury by law to take any interest for money, if the creditor has power to call for the principal, tho’ the term of payment be many years after the money is lent. suppose the manner of lending in Scotland was the same 200 years ago, and that A. B. having 768 acres of land, rented at a boll of victual the acre, the yearly rent 48 chalder, at 5 lib. Scots the chalder, 20 lib. sterl. C. D. worth a 100 lib. in money, to have lent it to A. B. and interest being at 10 per cent, to have received an annual interest of 10 lib. which he left to his son, and thought he had provided sufficiently for him, 10 lib. being equal to, or worth 24 chalder of victual. but interest being lowered to 6 per cent, money being raised in the denomination, and of less value by its greater quantity: the 6 lib. now paid for the annual interest of that 100 l. is not worth one chalder of victual. and 384 acres, or the half of A. B’s land 200 years ago only equal to a 100, or a 140 lib; is now worth 57 times that sum, the rental supposed to be doubled, and its value at 20 years purchase.

In France it has been observed, that about 200 years ago, the same land was in 30 years worth double the money it was worth before. so land worth a 100 lib. anno 1500, was worth 200 lib. anno 1530. 400 lib. anno 1560. and so on, till within these 50 or 60 years it has continued near the same value.

In England 20 times the quantity of money is given for goods, that was given 200 years ago. in these countries ’tis thought goods have rose; but goods have kept their value, ’tis money has fallen.

Most goods have increased in quantity, equal or near as the demand for them has increased; and are at or near the value they had 200 years ago. land is more valuable, by improvement producing to a greater value, and the demand increasing, the quantity being the same. silver and money are of lesser value, being more increased in quantity, than in demand.

Goods will continue equal in quantity as they are now to the demand, or won’t differ much: for the increase of most goods depends on the demand. if the quantity of oats be greater than the demand for consumption and magazines, what is over is a drug, so that product will be lessened, and the land imployed to some other use: if by a scarcity the quantity be lesser than the demand, that demand will be supplyed from magazines of former years; or if the magazines are not sufficient to answer the demand, that scarcity cannot well be supposed to last above a year or two.

Land will continue to rise in value, being yet capable of improvement; and as the demand increases, for the quantity will be the same.

Silver will continue to fall in value, as it increases in quantity, the demand not increasing in proportion; for the increase does not depend on the demand. most people won’t allow themselves to think that silver is cheaper or less valuable, tho’ it appears plainly, by comparing what quantity of goods such a weight of fine silver bought 200 years ago, and what quantity of the same goods it will buy now. if a piece of wine in France is equal in value to 20 bolls of oats there, that quantity of oats can never be worth more or less wine; so long as the quality, quantity and demand of both continues the same: but any disproportioned change in their quality, quantity or demand, will make the same quantity of the one, be equal to a greater quantity of the other. so if a piece of wine in France, is equal to or worth 40 crowns there; it will always continue so, unless some disproportioned change happen in the quantity, quality, or demand of the wine, or of the money.

The reason is plain, why silver has encreased more in quantity than in demand: the Spaniards bring as great quantities into Europe as they can get wrought out of the mines, for it is still valued tho’ not so high. and tho’ none of it come into Britain, yet it will be of less value in Britain, as it is in greater quantity in Europe.

It may be objected that the demand for silver is now greater than the quantity. it is answered: tho’ the demand is greater than the quantity; yet it has not increased in proportion with the quantity. 200 years ago money or silver was at 10 per cent, now from 6 to 3. if the demand had increased as much as the quantity, money would give 10 p. cent as then, and be equal to the same quantity of victual, or other goods that have kept their value. if A. B. having a 1000 lib. to lend, should offer it at 10 per. cent. interest, and desired land of 240 chalder of victual rent for his security, as was used to be given 200 years ago: tho’ no law regulate the interest of money, A. B. would find no borrowers on these conditions; because silver having increased more in quantity than in demand, and the denomination being altered, money is of less value, and is to be had on easier terms. if the demand had encreased in the same proportion with the quantity, and the money had not been raised, the same interest would be given now as then, and the same quantity of victual to pay the interest; for money keeping its value, 8 sh. and 4 pence would be equal to a chalder of victual, as it was then.

If 2000 lib. was laid out on plate 200 years ago, it is thought the loss on the plate was only the fashion, and the interest; but if the 2000 lib. had been laid out on land, the rent of that land would be more than the value of such plate.

Tho’ money or silver is so much fallen from the value it had, yet it’s given as a value for one half, or two thirds more than its value as silver, abstract from its use as money.

Suppose silver to be no more used as money in Europe, its quantity would be the same, and the demand for it much lesser; which might lower it 2 thirds or more; for besides that the demand would be less, its uses as plate, &c. are not near so necessary, as that of money.

Goods given as a value, ought for their other uses to be valuable, equal to what they are given for. silver was bartered as it was valued for its uses as a metal, and was at first given as money, according to the value it had in barter. silver has acquired an additional value since, that additional use it was applyed to occasioning a greater demand for it; which value people have not been sensible of, the greater quantity making it fall more: but it has kept it from falling so low it would have fallen, if it had not been used as money, and the same quantity had come into Europe.