Part 5

’Tis uncertain how long silver may keep that additional value: if England set up a money of another kind, silver will not fall to one third, because used in other places as money; but the lesser demand, besides the ordinary fall from the greater quantity coming into Europe, would occasion an extraordinary fall perhaps of 10 per cent: if the new money then in England did not encrease beyond the demand for it, it would keep its value, and be equal to so much more silver at home or abroad than it was coined for; as silver would be of less value, from the ordinary and extraordinary fall.

If England changed their money, other countries may do the same. if Holland alone kept to silver money, the price of silver may be supposed to fall immediately 50 per cent, from the lesser demand for it as money. and a 100 lib. in Holland be worth no more than 50 lib. new money in England, whether sent in specie or remitted by exchange; and as more silver came into Europe, it would fall yet lower, because of its greater quantity.

It may be objected, that in Scotland the quantity of goods are proportioned to the demand as they have been some years ago; and money scarcer, the demand for it the same or greater. so if goods and money are higher or lower in value, from their greater or lesser quantity in proportion to the demand for them; money should by its great scarcity be more valuable, and equal to a greater quantity of goods. yet goods differ little in price, from what they were when money was in greater quantity.

To this it’s answered, the value of goods or money differs, as the quantity of them or demand for them changes in Europe; not as they change in any particular country. goods in Scotland are at or near the same value with goods in England, being near the same in quantity in proportion to the demand as there: money in Scotland is not above one 40th part of the money in England, proportioned to the people, land, or product; nor above a 10th part proportioned to the demand. if Scotland was incapable of any commerce with other countries, and in the state it is now, money here would buy 10 times the quantity of goods it does in England, or more: but as Scotland has commerce with other countries, tho’ money were much scarcer than now, or in much greater quantity than in England; if there were but 10000 lib. in Scotland, or a million, the value of goods would not differ above 30 per cent, from what they were abroad, because for that difference goods may be exported, or imported. prohibitions may raise the difference higher.

Brittannia languens and others on trade and money, are of opinion that goods in any country fall in value, as money in that particular country grows scarcer. that, if there was no more than 500 lib. in England, the yearly rent of England would not exceed 500 lib. and an ox would be sold for a penny. which opinion is wrong, for as the ox might be exported to Holland, it would give a price in England equal or near to that it would give in Holland: if money were supposed to be equally scarce in Holland, and other places as in England, the ox might give no more than a penny, but that penny would have a value then equal to 5 lib. now; because it would purchase the same quantity of goods in England or other places, that 5 lib. does now.

The same answer may be given to these who think an addition to the money of any particular country would undervalue it so, that the same quantity of goods would cost double the money as before.

If the money and credit current in England be 15 millions, Scotland reckoned as 1 to 10, the money in Scotland encreased to a million and a half, the demand in proportion to the demand in England; that addition to the money of Scotland, would not make money of less value here, than it is now in England. goods in Scotland would sell as they sell in England, the product of the country would perhaps be 10 or 20 per cent dearer, to bring it equal to what it sells in England; but all sorts of manufacture would be cheaper, because in greater quantity: and all goods imported would be cheaper, money being easier borrowed, merchants would deal for a greater value, and men of estates would be capacitate to trade, and able to sell at less profit. nor would land rise higher than in England, the buyer having in his choice to buy elsewhere; the better security of a register may be supposed to add a year’s purchase or two to the value.

If the money of any particular country should encrease beyond the 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.