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.
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 bestlaws 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: andpreferable 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 whichgoods 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, orcheaper, 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 thequantity 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 agreater 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 theirquantity, 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 deliver7 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 greaterplenty, 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 pencethan 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 valueit 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, at5 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 improvementproducing 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 answerthe 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 bollsof 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 begiven 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 wasbartered 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.
’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 quantitycoming 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 intoEurope, 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 theychange 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 inHolland, 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, wouldnot 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 particularcountry 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 asa 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 demandfor 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 otherparts of that monarchy that are valuable. allowing the mines do fail, we ought the rather to provide ourselves with another money.