The Proposal Continued

It may be objected, that paper went because silver could be got for it when demanded, or at a certain time.

That was very reasonable, but would not be so in this case: the 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[Pg 180] 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[Pg 181] 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[Pg 182] 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[Pg 183] 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[Pg 184] 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[Pg 185] 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[Pg 187] 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[Pg 188] 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[Pg 189] 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;[Pg 191] 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[Pg 193] 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[Pg 194] 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,[Pg 195] 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[Pg 196] 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[Pg 197] 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[Pg 199] 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[Pg 200] 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[Pg 201] 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[Pg 202] 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[Pg 203] 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[Pg 204] 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[Pg 205] 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, 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.