CHAP. VI.
The proposal given in to Parliament by Dr. H. C. examined.
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 notesupon 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 thattime 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: and1 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, advantageousand 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 thesebills, 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.