CENTRAL CIRCULATION AND BOOKSTACKS

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AN

ESSAY

ON PAPER CIRCULATION,

AND A SCHEME propofed

For fupplying the Government with

TWENTY MILLIONS,

Without any Loan or New Tax.

Quand vous decoavrez des abus, la fraude, le monopole, Ic peculat, n'eo chercez point le remede local ; creufez & cher- chez le principe. Cherchez le principe & dites, Ce^te chofe eft-cUe dans le droit commun ? Si elle le contrarie qu-elie foic a jamais profcrice, qaelque avantage apparent qui en put refuUer. Si au contraire elle eft de droit, on ne fauroit trop tot I'etablir, & en authentiquer la contexture, les reC- forts, la inarchc, Sc les regies.

VAmi da HommeSf torn. vi.

LONDON:

Printed for W. Nicoll, at the Paper-Mill, in St. Paul's Church-Yard, MDCCLXIV.

ADVERTISEMENT.

November, 1763,

THE following Effay was written near two years ago, and was defigned as a private memorial. The Poftfcript was after- wards added with the fame view ; and the plan of both was accommodated to the fitua- tion in which the nation then was. As the method obferved, however, is not materially afFefted by any alteration of circumftances oc- cafioned by the Peace ; and as it gives an op- portunity of confidering the fubjed: in a^ va- riety of lights, the author has been advlfed not to alter it 5 but to prefent both the Effay and Poftfcript to the Public, nearly in theii* original form. The fubjedl treated of, is of the utmoft importance to the nation ; and yet it is not uncommon to hear many people, who, however ready they are to decide in other political points, make no fcruple of confeffing their ignorance in this, which may juftly be ranked among the moft capital of all. As it muft come under the deliberation of Parlia- ment this winter, and greatly interefts both the Landed Gentlemen and Merchants, we may now hope to fee the general attention turned towards it j and fuch regulations efta- A 2 bliflied.

blifhed, in regard to our Paper Circulation, as may not only put a flop to the abufes of it, which have of late been fo flagrant ; but may enable the nation, in their prefent invol- ved circumftances, to drav^ thofe great advan- tages from it, vi^hich it is capable of affording. The author will efteem himfelf peculiarly happy, if any thing that is faid in the follow- ing pages can in the leaft contribute to thofe important ends ; or, if his arguments are not found confiftent with reafon and truth, he will reckon himfelf greatly obliged to thofe who will take the trouble to deteft his miftakes, as nothing is further from his intention than a defire to miflead the Public.

AN

A N

ESSAY

O N P A P E R C I R C U L A T I O N, £?^,

TH E Diredors of our Treafury have been fo long accuftomed to that mofl: pernici- ous cuftom of borrowing money from in- dividuals, that it is now adopted as the only fyf- tern of fupplying the extraordinary expences of Government, though it has pufhed the nation to the very brink of a precipice. They either h^e not turned their minds to think of other expedi- ents, or have never confidered the nature of mo- ney, and the prefent extenfive circulation of Pa- per, other wife it would have been impofTible for them not to have perceived the dangerous tenden- cy of the immenfe annual loans drawn from private perfons, and not to have feen that the Conftitution of the State naturally pointed out a moft fimple and eafy remedy for that intolerable grievance.

Though the pradiceof the bank and bankers had long proved, to a demonftration, that all branches of domeftic traffick could be freely carried on by other kind of money than filver and goldj yet i\iqk who were entrtjftcd with the management of

( 8 )

the nation*s trcafure, (lill pcrfevercd in the old nar-' row opinion, that nothing but gold and filver would be current in th^ Government's fervice ; or if they fometimes had recourfe to paper-money, they iblicitcd the ianction of private Perlons to give their notes a currency, as though the State had no fgnd of credit of its own.

Now the fund of credit of the State (which is in reality the united property of the whole people) exceeds the value of any private funds. The Le- glflature, tlierefore, by engaging that fund, can ^ire a fuller Security for what paper- money they chufe to ifllie, than any private man or incorpo- rated company can do, efpecially as the faith pf Parliament is by far more to be depended upon 'than' that of any tv^^enty-four Dire6lors.

The prejudice that has been induftrioufly pro- pagated by bankers and monied-men, that their afiiliance was indifpenlably necefTary to procure a currency to paper, has probably been the chief caufe that the State has never attempted to circu- late notes upon its own credit *.

Bank

■ ' •The falfehood and abfurdlty of the pretences of the mo- T)ied men are moft glaringly evident from a late tranfaiEiion in Ireland. In the Year 1 760, the unexpefted failure of five or fix of their cliief banking houfes filled that whole kingdom with fuch a dilkni^ of private lecurity, that theie was a total ilagnation of all paper currency; and an hundred pound note, as 1 aril afiared, would not have been accepted in payment for a fixpenny loaf. Their houfe of Commons, in order to re- lieve the Public dillrcfs, came to a refolution to Hand bound for 150,0001- for three bankers, who proved that they had funds fufficient, which refoludon was no fooner pubiifhed, than General Credit revived, and the internal traffic of the Kingdom was carried on in the ufual manner. The monip4 wen, in this irjftance, could r.ot furely, vviih a good grace,

boali

( 9 ) Bank notes being at firft coiifounded with mer- chants bills, doubtlefs gave rife originally to this prcju^lice: but though it be now well known by thofe who have tboroughly examined our paper- circulation, that bank notes and bankers bills are really a fpecies of money of themfelves, without any refped to merchandize ; yet the old prejudice Hill fubfifts among the generality of peopk% who feldom examine, or indeed are capable of examin- ing, whether the notions adopted by them be founded on truth.

The bankers and rfionied men being fenfible what a profitable monopoly this prejudice threw into their hands, ftudiouQy fupported the delufion-, for they knew if it were once diffipated, their gains would be quickly lellened, and their craft would fall into difrepute. In like manner the London brewers wanted to perfuade the people, that Porter could be made of no other water but Thames water. In like manner, the Hu.ifon's Bay Com- pany, if they could, would wifli to perfuade the nation, that furs ought not to be brought fron-x North America by any other conveyance than by their fhips.

The meaning of the words PMc Credit being generally milunderflood, made the people be more eafily milled into the falfe opinion, that the fecuri- ty of the credit of the State depended upon the good will and ready affifrance of the monied men. Nothing is more common than to hear, in places of public reforr, exprcfTions to the following pur-

boaft that they were thj? fupporters of Public Credit, when, without the fecurit^ of the Legiflatuje, they chemicives had na cr«i4ic- at ali.-

( 10 )

fjofe, Public Credit flonrlflje 5^ Public Credit is lotx)^ public Credit is in danger-^ and if the generality of people fhould be afked the meaning of thole phra- fes, they would immcdiacely reply, that they re- fer to the ftate of the funds •, for when they are low priced, Public Credit is low, and when they arc high priced, it flourifiies.

This they think an admirable folution, though in reality the rifing and falling of the Hocks no more affe6ts the ftability of Public Credit, than the rifing and facing of commodities endangers the property of a Landholder. The forwardnefs of the money-lenders, to advance large fums to the Government, does neither eftablifh public credit, nor docs their refufing to lend their money upon Gov'ernment fecurity but upon the moft extrava- gant premiums, bring it into danger. The for- ma* only flievvs that ufurers are very ready to take advantage of the exigencies of the State, as well as of private perfons, and the latter, that the Govern- ment is in prefling want of a Commodity very hard to be got, becaufe fought for in an improper chan- nel.

The real foundation of Public Credit refts upon the good faith of the Parliament, joined to the probability of their being able co fulfil their con- tra6ls. Public Credit therefore, whatever flight and temporary calamities the State may fuffer, mud ever remain firm and unfiiaken^ while the ma- jority of the Legiflature continue honeft, and do ''not borrow beyond what the value of the fund 'pledged for repay n-jent can bear. It is then evi- dent that Public Credit m.ay fiourifli independent bf the monied men, pay even in their defpite ; for, as the whole body of the ^Landed Gentlemen,

joined

( «I )

joined to the millions of people in the inferior claf- fes of life, circulate much more than the monicd men, if the former acquiefced in paying and re- ceiving any fpecies of money, fiamped by autho- rity of Parliament, it wou-d be abfolutely impof- fible for the latter to fland our, or abftrad them- leives from any concern with fuch currency, un- lefs they chofe to be cut off from all traffic v/ith their fellow fubjedis.

It has been obfervcd, that Public Credit might flourifh independent of the monied men ; but ic will even appear, that it v;iii profper more with- out their alliftance, than by any joint co-operadoa of theirs. Very confiderable profits arife from the circulating of paper, which at prefent are all in- tercepted by bankers and monied men ; but by the fcheme which I fhalUpropolc, the State may eafily become its own banker, and thereby fecure to tt- felf the Profits arifing from the circulation of its own Paper, befides the acquifition of many nja- terial advantages, which fliall be more fully fpe- cified hereafter.

Incorporated banks and private bankers have been fo far of ufe, as they accuftomed the nation to the currency of paper-morey ; for if the Go- vernment had been the firft who attempted to in- troduce that kind of circulation, the people, not being capable of conceiving the foiid foundation of the Credit of the State, would not have accepted fuch payments but with difcontent and murmuring. But as every one now acquiefces in payments mad« by paper, and the great ex'cellcncy of that kind of currency, in large tranfadlons, is univerfally ac- knowleged, it would be the height of imprudence longer to furfFcr private men to multiply chat fpe-

B 2 ' cies

( i2 )

cies oF money at th(.'ir pleafure, by which, in rea-. lity, they, rob the Stite of one half of its exertive ftrenglh.

The law makes It death for any private perfon to coin a piece of money of the fmallefl denomi- nation in gold and filver ; but there is not the lead difference in circulation betwixt paper^money, and gold and filver coin -, and yet^ thro* an overfight in the LegiOature, bankers have been fuffered to iflue out thoufands, nay millions of pounds, of the former kind, which circulate through the nation as freely as if they were (lamped with the King's image, and auchori;ied by an ad: of Parliament.

If vve confider the effecTts of this circulation, it \^'ill appear that the bankers have the power of al- tering the value of money #s much as the Kings of France by their arbitrary edifts ; and that they

"have, by their pad proceedings, adlually done fo. The price of labour, and the value of commodi- ties, in this illand, it is evident, would not be the fame when there is twenty millions of pounds in circulation, as when there is forty millions; but our bankers, by their filent, but inceffant iffuing of notes, have more than doubled the current fpe- cie of this idand, confequently a crown will not go much further now than half a crown would have j4one formerly. Thus they have, in a manner, ftiipped the Landed Gentlemen of great part of their incomes, as looo pounds a year is now of little more value than 500 pounds before this arti- ficial incrcafe of money -j for the price of labour and commodities has rilen in a fafter proportion than the Landed Gentleman's property has been

• improved,

u

( 13 ) If we examine the extent of this circulation, we fhall find it immenfe. Ic is computed by feme of our beft writers on trade, that including our na- tional debts, and all kinds of paper currency, there are notes exifting in this kingdom at prc-fenc, in the proportion of twenty, or rather twenty-four pounds in paper for every pound in gold and fil- ver. Almoft the whole of this artificial fpecie has been coined year after year by private perfons and the opportunity of a loan to the Government has been the very inlet by which they have infinuated, their nominal money into circulation. Neither the whole of the gold, nor of the artificial fpecie is kept up in a^^tual currency ; but from the flighteft attention to money-matters at pref nt, we may per- ceive that there is a ten times greater quantity of the latter kind of money ufed, than of the former. All fums of looo pounds and upwards are now paid almoft wholly in paper. It is nearly the fame with fums of loo pounds; nay even fhopkeepers and tradefmens bills of 20 or 40 pounds are now generally paid in bankers notes. A noblema*n's fleward, in the remote parts of the ifland, writes, that of late he has received the rents of his Lord's eftate chiefly in paper •, and I have very certain in- telligence, that for feveral weeks, in the months of January and February, 1760, the copper-plate

preffes of the B k call off 2000 notes a day.

Thefe plain fa6ts evidently demonftrate the urgent neceflity of fpeedily taking the power of this artifi« cial coinage out of the hands of the monied men, who feem not to care how foon they unnerve the Government, provided the public diftrefs afford them an opportunity of enlarging their fortunes. While there is a malady fubfifting in the State, corrupting its very blood, in vain do we attempt to reftore health by mcer palliatives. If we would

cffeft

( '4 ) cffeft a cure, we mud apply the remedy to the root of the evil.

The order of monled men, which has fatally borne fo much fway for many years pail, inflead of being an ornament, ftrength, or advantage to the kingdom, ought to be fupprefied as one of its greatefb nuifances. In a found State there ought to be no monied men out of the order of mer- chants and manufadlurers (exclufive of the Gentle- men of landed property •,) but within this half cen- tury many have rifen to be monied men, without ever having been concerned in manufacture or traf- fic, or being pofiefTed of land. Now fuch fortunes as theirs cannot otherwife have been raifcd than by preying upon the neceffities of the State, or upon the induftry of private perfons, confequently the bufinefs they profefs ought to be carefully rell rain- ed, if not totally fuppre0ed by every well regu- lated Government.

While the bankers and monied men have been encumbering the State, and finking the value of money by their continual ifTuing of notes, the Stock- brokers have been adding to the confufion and dif- trefs by their daily' pra^ices in the Alley. The greateft part of the profefl money-jobbers, may mod juftly be ftiled Public Robbers ; for by their artifices they have, for thefe feveral years paft, llripped individuals of more of their property than all the Highwaymen in Great Britain. Their prac- tice IS exa6lly finiilar in its effects to that of Houfc- breakers. A Gentleman, we iliall fuppofe, buys I GOO pounds Mock for looo pounds, and locks up the note entitling to the ftock in his fcrutore; There he may reafonably think it fafe ; yet the event will prove him miftaken j for the tricks of

the

( J5 ) the money- jobbers (hall have fuch an influenCesf upon its value, that when he carries ic to market^ he will find that it is not quite worth 700 pou*nds. Would it have made any difference to this Gentle- man to have had his fcrutore broke open at home^ and out of 1000 pounds cafh contained in it, to have found 300 pounds carried off by thieves?

if there were no annual loan, the flot^ks would immediately ceafe to fludluate -, and, by the ella- blifhment which I Oiall propofe, they would con- tinually be kept up at par, or very near it, even during the war, which would give new life to trade, and fave perhaps half a million annually from being fent abroad. Though the fluctuating ftate of the funds does not in reality affe6t the Iccurity of Public Credit, yet their inftability and prefent' low price is extremely prejudicial to the nation. It gives an opportunity to foreigners to draw large fums out of the Kingdom, and tempts many ma- nufadurers and traders to forfake bufinefs, and go to Exchange Alley with their money, where at prefent [1762J for every 8 pence they can pur- chafe a Ihiiling, which is a greater profit than they can exped by following their occupations. This profit, however, few of them ever receive, for not being able to wait to realize their (liilling by feeing flocks rife to par, they are obliged, by the necef- fity of their aftairs, to fell out at much the lame rate they bought in, and find themfelves fufl^erers by having neglcded induftry. The brokers, how- ever, ftill thrive by a fuccedion of new bubbles -, but trade, in the mean time, is daily receiving frefh wounds, and that fpirit of induflry, which is the very life of the State, by continually fupply- ing new refources from agriculture, and the labour of artifts, is declining more and more into a fpirit

of

of gaming^ which fubfifts merely by devouring the refources already provided.

Part of every new Loan is made np by deduc- tions out of the old funds •, for the money lenders are gainers even by felling out of the old funds at one per Cent, lofs, when they fubfcribe the fame money in a new loan at two per Cent, advantage. The funds, by this means, are kept gradually fink- ing, and the Government, on the other hand, is ob- liged proportionally to augment its premiums, the burden of all deficiencies being laid at laft upon the State. The Public funds at prefent are like a granary with a hole at bottom. While the grain is drawn out every day by that opening, it is no wonder that the heap finks down, notwithflanding any fmall fupplies that may be poured in at top ; but if the opening were once flopped up, the gra- nary would foon be filled by the frelh ftorcs brought to it from all parts of the ifiand.

In like manner the funds mud immediately rife^ if the Government but once ceafes to make any de- mands for fupplies from the monied men •, for no pait of the yearly expences of Government being drawn from thence, the number of fellers would be very few in comparifon of the buyers, which is always a moft certain means of raifing the mar- ket. If there were to be no transfers or dcdudtions from the funds, but thofe occafioned by real ne- ceffities of Stockholders, lefs than half a million of money brought to market would be fufficient to raife them to par •, but the annual favings of all the thriving people in this ifland, reckoning from thofe in the higheft ftations, even down to menial fer- vants, in, great part center in the funds, and may juftly be computed at more than two millions,

con-

( 17 ) confequently more money would be brought to market than could be difpofed of, which would make it eafy to be had at the ufual moderate in- terefl.

The true and conflitutional means, therefore, of rendering loans from private perfons unneceflary, and of putting it out of their power longer to over- flow the nation with nominal wealth, is for the Le- giflature to ufe its own Credit at firft hand, and to fupply the extraordinary exigencies of Government by circulating notes of its own, which by the ex- pedient I am to propofe, may quickly be made to become current all over the nation, and have the preference to every other kind of paper fecu- riry. From what has been already faid, I am per- fuaded it has been chiefly owing to timidity, or to falfe prejudice, that the Legiflature has allowed any intereft upon Exchequer-bills, or begged the affiftance of the bank to circulate them. If bank- notes, and even bankers bills, have a free curren* cy through the nation, would any perfon refufe to accept of notes payable upon demand, when the good faith of the Parliament is pledged for the fecurity of that payment, and an office ereded where cafh might be received whenever the notes were prefented. As there never was a time when the Legiflature and the Adminiftration were in higher credit than now, I mean, a time when the Public had a higher opinion of their good faith, no feafon can be more proper than the prefent, to form fuch an eflablifhment, when all ranks are fully convinced of the great neceffity of fupport- ing the Government, and are at the lame time alarmed at the danger which threatens the State from new loans and incumbrances.

C Thougii

( I8 )

Though the French are not fo overrun with pa- per as we are ; yet the mifchicfs brought upon the State by public loans, and by fufFering private men to have the coinage of the artiiicial fpecie, have been complained of by fome of their mod judici- ous writers, who in vain wilh for the expedient for remedying thofe grievances which our free Go* vernmcrnt naturally offers to us. Their fentiments will appear from t .e following extrads, with which I Oiall conclude this introductory part. " * Ajou- tous a lout cela, cequeje viens de dire, qui'l y a dans I'Etat un peuple financier, qui fait commerce & marchanciize d'argcnt & de papiers. lis ont tous un meme intereft, de faire valoir les inven-

*" To tli;s let lis ac^d, what I h ;ve been juft obferving, that there is in the State a let of money-lenders, who make a traf- fic and merchandize of money and papers, Theie people have all the fame intereft in eilablifliing the pernicious inven- tions of their profeilions, which is, to withdraw the real fpe- cie as much as poiTible out of circulation, by keeping it locked up in their flrong boxes, in order to render it more r-ire, and by that means oblige ihe Public to make ufe of their notes, of which chey make a trafiic, by paying them to the bearers with a diicount ; whereas if the real cafii was no where con- cealed, and hid a free ciiculation, payments would be made much more eafily, and we Ihould not fo often be obliged to have recourfe co loans. — They glofs over their proceedings {o artfully, as to perf lade weak peop'e, that they are not only ufeful, b:t abfoiutely neCtflary to ti.e prolperity of the State, which Opinion makes thf^m be fuifered, notwithllanding all the diforders which they occafion in the kingdom, Politic.ul Vie^vs vp-on Commence, I759» If there was an agreement authorifed by the Sovereign, atid adopted by his fabjeds, (tha^ is, efta- blifhed by a Legifl iture, to ifi'ue money nearly in the manner of bank notes, nothing wonld be more ufeful, as by that means we might undertake everything. IJ Never could paper be more juilly entitled to the name of Credit. There is not in the world a bank founded r.pon principles fo folid and fccure as thofe which niake the foundation of this credit. The melt precious metals placed as a fund in a public treafury, cannot, in point of fecurity, be compared to the whole land-pro- perty of a State, Id.

tions

( 19 ) tions pernicieufes de leurs profefTions, qui eft dc faire difparoitre autant qu'ils le peuvenc la quan- tite des efpeces circulantes, en Ics retenant dans leurs coffres-forts, pour Ics rend re plus rares, & par cc moyen obliger le Public a fe fervir de leurs papiers, dont ils font commerce, en les ecomptanc a perte a ceux qui en font porteurs : au lieu que fi ks efpeces monnoyees n'etoic retenues nulle part, & avoient une circulation libre, les payeaient fe fiToient bien plus facilemenr, & on ne feroit pas fi fouvent contraint d'avoir rccours aux emprunts. — Ils donnent a leurs manoeuvres un tour fi adroit quMs perfuadent aux efprits fimples qu'ils font des gens utiles & precieux a I'Etat, ce qui fait qu'on les tolere malgre tous les difordres qu'ils caufent dans le Public. Ft^es Politiques fur le Commerce^ 1759, p. 210. S'il y avoir une convention autho- rifec par le Souverain, & adoptee par fes fujets pour former de la monnoie a peu pres femblable aux billets de banque, rien ne feroit plus utiles, puifque par ce moyen on pourroit tout entreprendre. Id* Jamais papier n'auroic mieux merite le nom de* CoNFiANCE. l\ n'eft pas de banque dans !e monde qui (oit fondee fur des principes fi folides & ii certains que ceux qui fervent de bafe a cette con- fiance ; les metaux les plus precieux mis en de- pot dans un trefor public ne peuvent entrer en com- paraifon avec tous les- biens en fond de terre d'un Etat. Id, p. 230. 232.

* On entend les bons & les mechants dire egale- ment par echo, que nous ne fommes pas dans le

temps

* We hear bo:h honefl: men and knaves echoing to each other, that it is not row a proper time to apply the remedies failed to the grievances of the State. Hovv ! Should not the time of the difeafe be likewife the time for jhe remedy ? We

C z Oiall

C 20 )

temps d'apporter les remcdes convenables aux maiix de I'ttat. Pourquoi done, le temps de la maladie ne Teroit-il pas celui du remede ? On ef- frayera, ciit on, les gens a argent, & I'on ebranle- ra le credit, c'eft a dire, le credit du Financier •, car pour ie credit du citoyen il ne peut qa'aug- menter a mefure que les operations profperes du Gouvernement rtleveront la confiance, & la furete. Eh! quel bien a fait jufques ici ce fatal credit des Financiers ? II a fallu I'amorcer par les profits K's plus onereux, combler d'engagements dc toute efpece le goufre de fa voracite, & fes fecouts equi- voques & perlides n'ont pas empeche qu'on n'ait cpuife en meme temps le credit de la nation, & qu'on n'ait etc force de charger le peuple jufqu' a i'acablement le plus abfolu."

JJ ami des Hommes^ torn. vii. p. 304.

fhall alarm, fay they, the monied men, and give a fiiock to credit, that is, the credit of the qnoney-iender ; for as to the credit of the Citizen, it cannot fal of increahng m propor- tion as the profperous rr.eafures of Government rellore confi- dence and ftcur ty. Alas ! what good have we hitlierio reap- ed from this fatal credit of the money-lenders ? We have been obliged to offer the moft burthenfome premiums as a bait to its rapacity, to throve in contraifls and ergrigen.ents of every kind in;o its voracious gulph; and at the fame time, i's nomi. iial and treacherous fupplies have not prevented us from ex- haufting the credit of the nation, and from being forced to lay fuch burdens upon the people, .that they are abfolutely finking under them. The Friend of Men^ vol. vii, p. 304.

( 21 )

A Scheme for fupplying the Government with feveral millions annually, for two or three years, without any loan or new tax.

Let it be moved in the Houfeof Commons, to ilTue and circulate a million in bills or notes upon the credit of Parliament, without allowing any intereft upon them, or without the aid of the Bank, by appointing an office where thofe notes Ihould be paid upon demand. If the motion is approved of by a majority of the two Houfes, and the Bill pafifes into a law, the circulation of the notes may be effected in the following manner.

Let fix or more CommifTioners be chofen by ballot, by the Houfe of Commons exclufively, to have the dire<5lion and management of the whole circulation. Lee thofe CommifiTioners, after tjiey have been confirmed by the King, hire the large empty apartmenrs above the Royal Exchange for their office ; and when they have fitted them up in a proper manner, and are ready to ifllie out their notes, let the new eftablifhment be then publifhed to the world by two boards, one fronting the ftreet, and the other the inner fquare of the Ex- change, with the following title in large capitals :

THE BANK OF THE PARLIAMENT OF GREAT BRITAIN.

^The apartments above the Royal Exchange may ferve for two years, when the charter of the Bank will expire ; and as that charter ought never to be

renewed.

( 22 )

renewed, the Company, upon being uiflblved, will probably be glad to fell their Houfe to the Government.

As meer names have a great influence on the common people, the very title above mentioned would tend to give the notes a general currency. But, to promote their circulation, let it be infcrted in the Ad, that the Parliament Notes will be ac- cepted in payments, by all offices under the Go- vernment ', and, to fecure the good faith of the Com mini oners, let it be declared felony for them to iflue notes above the value of the fum allowed by Parliament, unlefs for real fums of gold and filver depofited in the hands of their Cafhicrs.

The not'js, when ifllied out, ought to be difperfed in the remote parts of the kingdom, which would make it longer before they were offered for pay- ment in London; and as a fund for the prompt payment of them, 100,000 1. in cafh ought to be depofited in the bank, which fum will be fuffi- cient to anfwer all occafional demands -, for pro- bably not above a tenth part of them would ever happen to be prefented at once, or if there were, fuch an accident could eafily be provided againft.

The Bank being once eftablifhed, let the Com- miffioners foon aft' r petition the Parliament to or- der the annual intereft due to the Public Creditors to be paid at their bank, which would give them the command of three millions, and that would ferve as a rich fund for circulating many millions of paper, as it does at prefent to the Company of the Bank of England, who have the ufe of it with- out making the leaft acknowlegemenc for it. By transfering the Payments of the Dividends to the

Par.

( 23 )

Parliament Bank, the Legiflature could, upon that fund, iflue one and circulate five millions in notes annually for two years, if the war fhould conti- nue fo long ; and five millions ifllied in that man- ner, would, without burthening the people, go as far in fupplying the expences of the State, as fix millions by the way of a loan, as there would be a faving not only of the premiums, but of the dif- count upon all navy and viflualling bills, which laft, at prefcnt, greatly enhances the expence of Government, and throws great profits into the^ hands of the money-dealers.

The eflablifhment of a National Bank would alfo, in all probability, be a means of fhortening the continuance of the war, and bringing it to a happy iflue; for if our enemies faw that we no longer borrowed money from individuals, but raifcd the fupplies within the year, they would be more dilheartcned and intimidated by fuch an alteration in the ftate of our revenue, than by the lofs of Se- veral battles ; and, inftead of wifiiing to protra6l the war, would haflen to conclude a peace, upon juft and reafonable terms.

The circulating of one million in notes, by this method, would alfo he found lefs expenfive, than the allowing an intereft of three per Cent, upon them, and fo)iciting the afliftance of the Bank to give them a currency. An intereft of three per Cent, upon a million of pounds is 30,0001. but the charge of circulating a million by a New Bank, could hardly amount to 20,coo 1. as will appear from the following calculation.

The

( 24 )

Z.

The Salaries of fix, or even nine Com- 7 - miflioners, at loooL each i 90 o

The Intereft of 100,000 1. lying at the? Bank to anfwer all demands ^ ^

The rent of the rooms — — 500

The falaries of the Secretary, Cafhiers, *J Clerks, &c. with the expences of Pa- / per, copper-plate prefles, &c. would J ^^^^

not exceed J '

Total of the expences L, 19,500

Twenty millions might alfo be circulated for the fame expence ; or rather the Government would be put to no expence at all by the nation- al Bank -, for the profits arifing from the circu- lation of the notes, and the difcounting of bills, would more than defray all the charges incident to the eftablifhment.

A far-

( 25 )

A further extenfioii of the Scheme, by which the propofed Bank might be ren- dered one of the greateft refources of Go- vernment, and a means by which great part pf the national debt might be fpeedily paid off.

UPON the return of Peace, the Parliament Bank might foon become the chief center ' of all Paper Circularion, by the Commiflloners being authorifed to offer two per Cent, upon all their notes of looo or 500 1. valae ♦, which would be a means of procuring them an additional fund of gold and fiiver. For as the prices of (locks will then probably be above par, it would be as profit- able for monied men and profperous traders, to take* for large fums circulating notes, bearing two per Cent, intereil, which notes may dill be ufed in trade, a> to throw that money out on trade, by buying flock with it at the advanced price of the funds. Great part of the money received, up- on the iffuing fuch notes, may be difpofcd of in paying off part of the national debt, which bears an irjiereft of four and three per Cent, and by that means the debt (landing at a high intereft, may gradually be transferred into a debt bearing a low in.teFefl, which, in the courfe of a fev/ years, woutd occafion an annual faving of feverai hun- dred thoufand pounds to the State To forward this transfer, and to make a kind of glut of mo- ney, the Government may ilTue out two or three D millions

( 26 )

millions in paper, as there is then no drain of a foreign war to carry out our real fpecie; and by circulating this artificial coinage, the Commiffion- ers of the Bank would get poflfefiion of an equiva- lent Turn in gold and filver. Part of this fum, in real cafh, being thrown back into circulation, by being paid to the Public Creditors, as a part of their principal, would occafion fuch a fuperfluous abundance of money in their hands, that they would be at a Jofs how to difpofe of it, and would be glad to put it again into the Bank, and accept of notes for it, bearing an intereft of two per Cent.

When means are juftly appropriated to the ends defigned by them, great and furprifing effeds are often produced by fmall, and feemingly weak, caufcs. I have heard of the courfe of large and navgable rivers being diverted by fome hours la- bour of a fingle ditcher. In like manner it is ca- pable, I think, of the cleareft demonftration, that the expedient above propofed would alter the chan- nel of ti)e whole 120 millions of debt, by putting it in the power of the Government to cancel that debt for another at the general intereft of two per Cent. Ir would alfo be a means of finking annual- ly a confiderable part of the principal, by the furplus that would fall to the finking fund, and for the future, would fupprefs, if not totally anni- hilate the infamous trade of jobbing in the Alley, by which the morals of the nation are moft fhame- Fully corrupted, and induftry and trade fo great- ly burdened, that they are almoft finking under the load. If the annual intereft were once lefiTen- ed one million, and feveral niillions of the capi- tal debt paid off, which the Circulation of Parlia- ment Notjs would enable the Government to do,

the

( 27 )

the prefent redundancy of paper would gradually vanifh, as private bankers, inftead of having any opportunity for pouring out more notes, would be obliged, for fear of a bankruptcy, to retrench thofe which were already circulating on their cre- dit. The Government then, upon the occafion of any future war, might, inftead of applying for fuccours from private perfons, draw almoft the whole of the extraordinary fupplies from the Par- liament Bank, by increafing the paper circulation, which increafe could again eafiiy be retrenched up- on the return of Peace.

D 2 T|ie

( 28 )

The Scheme further enlarged, fo as to vi- vify commerce throughout the whole ifland, and facilitate the mutual intercourfe of trad- ers remotely fituated from each other.

AT prefent, while our bankers monopolize all money tranfadlions, no money can be tranf- mitted from one pare of the Kingdom to another, without an arbitrary and exorbitant tax, called the price of Exchange. This tax, though it be una- voidable in our commerce with foreign nations, may however be eafily fupprefied within the ifland, by extending the influence of the Bank in the fol- lowing manner. Let the Bank Commiflloners eftablilh fubordinare ofBces in mod of the large Cities of Great Britain, as at Briftol, Liverpool, York, Manchefter, Newcaille, Edinburgh, Giaf- gow, Aberdeen, &c. Let there be a Cafhier and Clerks at each of thofe offices, fubjedt to the con- trol of the CommifTioners of the Bank, in the fame manner as the colkdors of the different diitrids are accountable to the Commiffioners of the Ex- cife and Cuftoms •, and let it be declared, that prompt payment will be given for Parliament Notes at all thofe ofRces.

The eftablifbment being thus regulated, would entirely abolifh that tax levied by money dealers, for tranfmitnng of cafh from one part of the ifland to another ; for whoever had occafion to fend any money to a cliftant part of the Kingdom, needed only to put it into the Bank-office that was next to

him.

( 29 ) him, and his correfpondent, upon intelligence re- ceived by the pod, might receive *the fame fum from the office jying near eft to the place of his re- lidence. A regulation fomewhat fimilar to that I have propofed, has already been introduced by the late A(5l, for the payment of feaniens wages, by the favour of which, a faiior that receives his pay at Plymouth, or any other of the King's Yards, may tranlmit any part of it to his relations in the remoteft corners of the ifland, without the fmallcft dedudlion. The excellent effedls of this new re- gulation, fully illuftrate the advantages that would arife to the State, from abolilhing the arbitrary tax above-mentioned, which, like bad roads to wheel- carriages, greatly obrtru6t the internal tralBc of the Kingdom.

The Bank ought alfo to eftablifh nine or ten offices for prompt payment in different parts of London, which offices would be a means of pre- venting long journies to thofe who wanted to change notes, and would alfo occafion lefs tumult and buftie at the center of the whole circulation at the Royal Exchange. Such offices would alfo be extremely convenient on another account ; for thofe Noblemen and Gentlemen, who at prefent enrich private bankers, by fuffering Jarge fums to ]y in their hands, v;ould foon fee the propriety of transferring their money to the National Bank, where they would receive two per Cent, for it, and might tranfadt their affairs at thofe offices, with more eafe, and much greater fecurity, than at the houfes of private bankers, where bankruptcies of late have not been very unfrequent. When the utility of the National Bank was once perceived, Our Nobility and rich Gentry would probably make

it

( 30 ) it a point of Patriotifm, not to place any money in the Lands of private bankers; and the fums of real cafh t!iat would by this means be transferred into the ParHament Bank, would add fuch vigour to the circulation of its notes, that they would gra- dually fupprefs the nores of our prefcnt monied men and monied Companies, and at length become the only kind of paper money circulating in the State, which would prove a greater mine of weahh to the Government in the exigencies of a war, than all the mines of America to the King of Spain.

I have avoided touching upon minute regula- tions, that I might not fwell this prefent pamphlet-, but as the very novelty of the propofed Scheme may occafion fome fcruples in the minds of thofe who have never turned their thoughts to confider the nature of the traffic, fo ftudioufly difguifed by our monied men, 1 fliall conclude with adding a few words in anfwer to fome plaufible objec- tions that may be made againft the eftablifh- ment.

Ohjeoiion I. It would be an innovation, and innovations are dangerous.

Anfwer. True •, it would be an innovation ; but the firft inftitution of the Bank of England was a greater innovation •, yet that Company was nevertheiefs eftablifhed with fuccefs, and for feveral years added great vigour to the State ; but iis the increafe of our funds has fpawned a great many other private banks, both it and they have long been an incumbrance to the nation. The re- coining of our money, advifed by Mr. Locke, in

the

( 31 ) the midft of a war, vvas an amazing innovation j but being executed with prudence and fleadinefs, it was happily accompliflied, to the confufion of our enemies, and the great advantage of the State, and added more to our reputation, than either our fleets or our armies. Having inftanced thofe two particulars, it would be wafting time to add any more in anfwer to this objedlion. I fhall therefore only obferve, that the circulation of Par- liament Notes in room of other notes, would be effe6ted by fuch an eafy and infenfible tranfition, that the innovation would be no where peVceivable, but in the counting-houfes of bankers, who would indeed foon feel, that the fpring which filled their cifterns was diverted to fupply the necefTities of the State.

Ohje5f, 11. The nation, remembering that the Exchequer was fraudulently fhut up in the reign of Charles II. will fcruple to truft it a fecond time.

Anfwer, I do not defire that they fhould ; oat furely they would not hefira:e to tryft the Parlia- ment for 15, or 20 millions of notes, when the/ have already trufted it for 120 millions. What elfe are thofe transfer notes given to the Public Creditors, for the fums they lend to the Govern- ment, and locked up by them in their fcrutures, but fo many Parliament Notes funk out of circular tion, yet bringing in an intereft to the proprietors of 3, 34, and 4 per Cent. The people are fo far from diftrufting the fccurity of thofe notes, that we have feen, for thefe two years pad, that they have been contented to take annually 12 millions more of them •, though it be certain, that if the Parliament faith were to fail, they would be of 2 lefs

( 3^ ;

Jefs flgnlficancy than blank lottery tickets. Were the Parliament, therefore, to add their fanaion to Notc^s of currency, the circulation of fuch Notes would be eftablifhed without the lead obflrudlion or difficulty, except from the weak murmurs of the monied men. People are now To accuf- tomed to payments in paper, and that kind of •coinage is fo abufed, that one or two fhopkeepers in G— g— w, about twelve years ago, had the af- furance to ifTue no lefs than 50,000 pounds m notes in one fummer; but as chcy went too bare- facedly to work, their notes were all returned upon them in fix or fevtn months This could not happen to notes iflued upon the fandion of Parliament; for, exclufive of the folid fecurity upon which their currency would be eftabliflied, the confumption of the Government, which at prefent is fo great, as to make an eighth part of the coniumption of the inhabitants uf the whole ifland, would occafion a continual rotation of paying and receiving, to a much greater amount than that of the fums in paper iiiued by the Parliament Bank, though the war ihould continue two or three years longer.

OI?jeu^. III. It would be a violation of the Charter of the Bank, which ftipulates that no other Bank fnould be authorized by Parliament during the continuance of the Bank of England.

Jnfwer, The Highteft refiedion will convince any one, that the Parliament, by that llipulation, never meant to preclude themfelves from ufin^y their own credit. The teftimony of fads alfo proves, that the meaning of that ftipulation has always been fo underftood j for what dk are Ex- chequer

( 33 )

chequer bills, but fo much paper money iflued upon the credit of Parliament. The whole dif- ference then, between what has been already done, and what is propofed by the prefent Scheme, is, whether the Parliament fhould content themfelves with the Diredlors of the Bank of England as ma- nagers, or appoint managers of their own. The many advantages aridng from the latter method, I hope, have been already clearly illuftrated.

Ohje5l, IV. If the Parliament fhould fupply the extraordinary exigencies of the war, by efta- blinking a National Bank, and ifluing Notes, the kingdom would be glutted with an over-abun- dance of that kind of money ; which is already but too plentiful.

Anfwer. The very defign of the edablifhment is, to prevent the nation from being overrun with a fuperfluous abundance of paper money. Bank- ers, at prefent, by ifTuing notes, draw all the caffi to themfelvts, which they offer in a loan to the Government j and as this loan is paid at eight or ten different payments, it renders it fcill more eafy for them to keep up the circulation of their paper.

The Government fees the cafli, the people cir- culate the paper, and all the bankers have to do is to keep fo much cafh by them, as is fufficient to give a currency to their notes. According to the vulgar prejudices indeed, loans of ten or twelve millions have been raifed for two or three years fucceflively, from the meer annual favings of our wealthy traders ; but this opinion, everi upon the mod extravagant fuppofitions of the ext tent of our trade, plainly appears to be falle and E abfurd

( 34 )

abfurd in the higheft degree, Bcfides the oppor- tunity which a loan affords to the bankers, of if- fuing note^, the very loan itfelf is converted into transtcT notes, which exilt as (o much paper wealth, and he as a burden upon the State till they be re- deemed by Parliament ; that is, till the debt be paid off. Now, if the Legiflaturc, by a National Bank, were to ifTue five or fix millions in Notes, there could be no other papiT money ifTued that year ; for the bankers would be obliged rather to abridge their paper credit, fince their notes would be thrown back upon them as a ufelefs commo- dity. The Notes ifTued by the Parliament Bank would, in part, fink out of circulation ; but would Jeave no burden behind them, like transfer notes, that remain as evidences of a debt; and thofe notes that continued circulating, would only appear in the room of the prefent private notes, which would cafily be driven entirely out of circulation by them. Thus for two, or even three years, there could not any increafe of our paper fpecie be difcovered^ tl.ough the Parliament fliould ifTue out five, fix, or eight millions annually, and in the mean time, peace, in ail probability, would be happily re- iUrcd.

Ohje^, V. It will occafion an univerfal up- roar among the monied men ; and it is not pru- dent, in the prefent fituation of affairs, to dif- guft them.

Anfwer. I make no doubt but the monied men will clamour, that they will ftudioufly mifreprefent the Scheme, and will endeavour to fill the people with falfe alarms and jealoufies -, but the authori- ty of Parliament, joined to the powerful iafiuence

2 of

( 35 )

of truth, is fufEcient to overturn all their oppo- fition, and filence all their clamours. Their fway and influence, I confefs, is at prefcnt very formi- dable -, but that is entirely owing to their b-ing ap- plied to as ufeful and neceflary auxiliaries to the State •, for their power and interefl would be no- things if they were not fupported by their connec- tion with the Government. If the Government fhould detach itfelf from them, they would be, of all meni the mod dependent ; for, as the richeft of them have ifllied more paper obligations than they can well anfwer for, in (lead of being able to check others, they will be checked themfelves, with the perpetual apprehenfjon of fuch a run up- on them for calh, as would end in a bankruptcy. This would force them gradually to abridge their dealings in paper, and turn themfelves to fome other bufinefs, which would be doubly beneficial to the State. 'Tis natural to expert that they (hould ufe their utmoft endeavours to prevent the. cftabliQiment of a National Bank, or if not fuc- cefsful in that, Ihould labour to mifreprefcnt the tendency of it. But fhould they even offer a free gift of a million to ftop the pafTing of the adb, their prefeot ought to be rejcded, as it would only prove how deeply they were interefted in prevent- ing any reformation in the prefcnt money fyftcm. Or, Ihould they alledge, that to draw money from fuch a bank, would be a violation of the privile- ges of the Houfe of Commons, or that the efta- blifhment itfelf would become a mere State bubble, for cheating the Public Creditors, the very funda- mental principles of the inftitution would be fuf- ficient to defeat fuch flanders, and make it evi- dent to the meaneft apprehenfion, that there was no fraud at bottom, or pofTibility of a fraud : the E 2 privi-

( 36 ) privileges of the Houfe of Commons could not be faid to'^be violated, when the Bank Commiflioners were adually chofen. by that Houfe, as truftees or manac^ers for them •, nor could the nation juftly fear a fecret collufion to rob them of their gold in exchange for paper, when it was made felony for the CommiflTioners to ifiue a fingle note above the fum allowed by Parliament, unlefs for real fums of gold and filver depofited in the hands of their CaQiicrs. How different is the cafe at pre- fent, when for every fum in gold and filver depo- fited in the hands of bankers, perhaps five times its value is iffued in paper. The nation certain- ly would not be fo liable to be over-run with pa- per money, if the iifuing of that coin was con- fined to the LegiHature, who publifh to the world what fums they pledge their credit for, as it is at preient, while the bankers afifume the privilege of iiTuing it at pleafure, without giving the leafl in- timation how much they iffue. Therefore, inftead of oppofnion to the eftablilhment on the part of the people, we may exped their zealous and hearty concurrence in the fupport of it, notwithftanding any clamours or mifreprefentations of the monied men.

Ohje5f. VI. If the Scheme propofed be put in execution, it will entirely ruin the trade of private banking-, and it would be cruel to deprive 4 or 500 people of a livelihood, by which they are at prefint enabled to live in plenty and affluence.

Anfwer, It would neither be cruel nor injuri- ous to oblige any body of men, who thrive by diftreffing the Public, to quit their pernicious oc- cupations, and betake themfelves tt> fome other

means

( 37 )

means of living confident wTith the welfare of t;he State. Hardly any public reformation can be ef- feded, without interfering, in fome manner, with the private in tereft of individuals ; but that is ne- ver thought any juft reafon why fuch reformation fhould not take place. When the war is con- cluded, upwards of 100,000 men will be turned out of bread, that is, will be deprived of their prefent means of fubfiftence, and obliged to look for fome other ; but that is no reafon why the war fhould be continued for ever, left thofe who make it their profeflion Ihould want employment. The intereft of the watermen, who ply on the river Thames, was oppofed to the general conveniency that would arife to the Public from building Weft- niinfter Bridge ; yet this ufeful undertaking was not retarded in the leaft on account of that trifling objedion. The intereft of the water-carriers in London, who were formerly a very numerous bo- dy, was alfo oppofed to the Scheme of introducing the New River water into this metropolis. But though it was eafily forefeen that their trade would be ruined, if the new fcheme fhould take place, yet the extraordinary convenience that would ac- crue to the Public,' from the conftant and plenti- ful fupply of water, outweighed all confidera- tion of the private intereft of thofe individuals, who could eafily earn a livelihood by turnintj^ themfelves to fome other employment. The fo- ciety of water-carriers, it will be allowed, is not much miffed in this great city, the inhabitants of which are now better fupplied with water by the New River Company, who, for a fmall expence, circulate it in pipes through the ftreers and houfes in great abundance. This circulation has been at- tended with fo many conveniences, that the trade

of

C 38 )

c# the water-carriers has long been rendered ufelefs and obfolcte; and to thofe who are accuftomed to think only of modern times, it now feems odd that fuch a Society ever exifted. I q^ like man- ner, if a Parliament Bank fliould be eftablifhed, and be extended in the manner above propofed, the monopolizing trade of private banking would foon be extinguifhed, and it would probably ap- pear a ftrange paradox to Pofterity, how fo many falfe coiners came to be fuffered in the beginning of this century, in all our large cities. ^Before the late Revolution, there was fcarcely a fingle banker in all London, much lefs a banking-houfe in every great city ; yet in thofe times trade flou- riihed, the people lived in plenty, the prices of things were in general very cheap, which made our manufadures find every where a ready mar- ket, and the national flock of gold and filver kept annually increafmg. If the nation could then profper, without the aid of bankers, why fhould it be thought that it could not ftill flourifh, tho' there were not a private banker in the whole ifland, efpecially as Liberty and Property are now better fecurcd, great improvements have been added to the arts, the people now acquiefce with confidence in the good faith of the Legiflature, and the riches and produce of our Colonic? are ten times greater than they were in thofe days.

P O S T-

( 39 )

POSTSCRIPT.

Od^ber 1762.

THE preceding Eflay was written eight months ago, upon the expedation of the continuance of the War j and the defign of it was to prevent the nation from being longer preyed upon by the monied men, who for loans, which, in great part, confided of imaginary fpecie, ex- torted the moil extravagant premiums, efpccially for thefe two years pad, when they amounted t<$ about 40 per Cent, of the whole fum borrowed. Since the writing of the manufcrlpt, the face of affairs is greatly changed, and we have now thd happy profped: of a Peace, which, in all proba- bility, will be both honourable and lafting. '

Irhe mifchievous praftices of the monied men, however, are far from ending with the war. Evea in time of peace, they afTume not only the coin-t age, but (he fole diredion of the circulation of all

our

( 40 )

our paper money, wliich is a power too great to he.lefc in the hands of private men, who arc every day extending it more and more, to the great prejudice of the State. Though the bad confe- quences of this paper coinage have never been attended to at home ; yet we find the Colony of Conne(5licut have not only remarked them, but guarded againft them by a moft wife law, which ordains, *' nal any Society^ pre/timing to emit tr " ijfue bills of credit ^ to he ufed as money in trade ^ *' Jhall be fun'Jhed as in cafe of counterfeiting ; and *' the utter er of fuch bills fh all forfeit double the fumJ"^ See Douglafs's Summary of American Affairs, vol. ii. p. 2 00.

That fuch a law, long before this time, has not been eftablidied in this ifland, I believe, has been chiefly owing to the erroneous, but gene- ral opinion, that the Bank of England was a Na- t'onal Bank, and that the Government had no other way of ufing paper money but through that Corporation. For many years pad, however, this opinion has moft juftly been ranked among vul- gar errors \ and almoft every one now fees, that AHiley's punch-houfe has as good pretenfions to ,be a National Punch-houfe, as the Bank of Eng- land to be a National ^ank.

So

( 41 ) f

So far from being a National Bank, it is indeed a national grievance, as it prevents the Public, while it fubfifts as a Corporation, from gaining annually- near a million flerling, as may be concluded from the following eftimate. 'Tis computed that 30 millions flerling are circulated in paper by our monied Companies and private bankers together, which might all be circulated by the State, if private perfons were by law prohibited from coin- ing that kind of money. Now if 30 millions were circulating upon the credit of the State, the Go- vernment would reap this double advantage; it would in a manner fink 30 millions of the Pub- lic debt, and next would add by that means, a mil- lion a year to the Sinking fund, by which it may be demonftrated, that the whole debt might be paid off in lefs than thirty years. That a Na- tional Bank would quickly be countenanced by the people, and have a more extenfive circulation than all the Banks, both public and private, have at prefent, may, I think juftly be prefumed, from the example of the Bank of Amfterdam, which, as far as I can procure intelligence of it, feems a real National Bank, ^nd one of the great props of the Republic.

It

( 42 )

It has been remarked many years ago, that the Bank of England was formed upon a very im- proper plan, a plan calculated much more for private than public benefiuj but not to go fo far back as the years 1705 and 1710, when thofe ob- fervations were made, I Ihall only give the opi- nion of Sir John Barnard, who, in a debate in the year 1736, exprefled himfelf in the follow- ino- manner ; " I hope it never will be found *' neceffary for us to coniinue the exclufive pri- " vilege of the Bank beyond the prefent term (1742);/' and in another place he fays, " This '' propofal, I. hope, will have one good effeflj " that it will put the people in mind, that as the " term the Bank has is drawing near to an end, ,*' the Public ought to begin to think of redeem- *' ing the nation from that monopoly; and there- *' fore they ought now to begin to pay off that " capital, which mud be all redeemed before an « end be put to their exclufive privilege."

To any perfon the lead acquainted with the na- ture of our Public funds, and the real founda- tion of Public Credit, it will appear furprifing that the advice of Sir John Barnard was not then followed ; but the adminiftration at that

time

( 43 )

time feem neither to have had capacity nor in- clination to look beyond the falfe fyftem that had (o long prevailed. They went on from one tem- porary expedient to another; and though the ne- cefllty of putting the currency of paper under fome national regulation became every day more and more apparent, they even fufFered the monied men to extend their power, and to appropriate to themfelves advantages, which really belonged to the State, and from which the Government might have drawn confiderable profit.

'Tis a juft obfervation of an excellent writer, *' Qu'un Etat ne fortira jamais de fon engour- *' diifement, Sc de la lethargic des ufages & de " j'indecifion s'il n'eft gouverne par des tetes tran- " chantes qui voient le but, & qui y marchent *' a travers les brouffailes, fans les prendre pour *' de la futaie." If many people are not mif- taken, the Government is at prefent under the di- redlion of fuch heads ; and as a mofl: favourable opportunity again offers itfelf of throwing off the fhacklcs of the monied men, and of doubling the vigour of the State, by applying to the fervice of the Government the refources which they have long intercepted, we may now hope that the oc- F 2 cafion

( 44 )

cafion will be improved, which will foon reflecl a greater luftre upon the adminiflration, than what could arife from many brilliant vidories*

Hardly any thing, I think, bids fo fair for ef- fecting that purpofe ^s the Scheme above pro- pofed, which might be eftabiilhed without even feeming to be an innovation •, and though the profits arifing from it to the State would be ve- ry confiderable ; yet it would not interfere with the advantages of any, but of a few perfons, whofe traffic at prefent, though not illegal, is really un- conftitutional. Inftcad of burdening manufac- tures and interrupting induftry, it would eafe and advance both thefe. It would give the Legifla- ture fuch a proper command of the cafh of the kingdom, as would enable it to reduce the inte- reft of the public debts to two per Cent, and to promote manufa(flures and improvements, the Government could then even lend money at that intered.

As the charter of the Bank of Eng'and expires ih the year 1764, that Company will, in all pro- bability, move for a renewal of it during this Sef- fion of Parliament ; but if the Government fhould

think

( 45 )

think fit to eftablifh a National Bank this winter, they might defer granting a new Charter to the Bank of England, and next year the National Bank would be able to ilTue and circulate notes to the amount of the whole Capital due to the Bank of England, which Corporation might then be to- tally and for ever fupprelTed. The National Bank having once fucceeded in room of the Bank of England, might afterwards extend its branches, in, the manner above propofed, to the remoteft corners of the ifland, if the Legiflature fhould think proper to enad a law like that of the Colony of Connedicut, againft the circulation of all artificial bills of credit.

The fpirit of banking and paper-coining is now prevailing to fo great a degree, as to make fuch ^ law extremely necefTary. The News-papers mention, that there is a great increafe of bankers in Lombard-ftreet ; and they inform us likewife, that fome perfons have an intention of fetting up a new Bank in Pall-mail, the Capital of which is to amount to 200,000 pounds, upon which, (according to the computation of bankers, of cir- '

culating-

( 46 )

culating five for one) a million fterling in paper may be circulated. A Gentleman declares, that laft year in Scotland, he faw 800 pounds of land rents, of which only ten pounds confifted of real cadi, and the method of changing a guinea in that country at prefent is with four five (hilling notes and. a (hilling.

If the bankers are fuffered to proceed at this rate, they alone, in a (hort timi-, will be in ppf- fefTion of all the gold and filver in the nation ; in which cafe, exclufive of the great power they would acquire, trade would be as much burdened by an over-abundance of paper fpece, as it is at prefent by our high taxes. I know we have been of en told, that the Bank of England when they next renew their Charter, intend to prevent that, by getting the private bankers laid under fuch reftric- tions, as to put it out of their power to trade fo largely in bills; but, befides that this would only be increaGng the monopoly of the Bank of Eng- land, I (hould be glad to know wh.re is. the diffe- rence to the State, whether the coinage of the ar- tificial

( 47 )

tificial money be in the hands of private bankers, or of a corporation of bankers. And if the Bank of England, for their exclufive profit, could think of prohibiting private bankers from dealing in bills of credit, why fhould the Legiflature, for the be- nefit of the State, hefitate to afllime the fole power of ifluing fuch bills, which would prevent bank- ruptcies from being fo frequent, and flrengthen both pubhc and private credit.

By ellablifhing a National Bank this winter, an experiment may be made before the expiration of the term of the Bank of England, how the Pub- lic would relifh the Parliament Notes, which in all probability would have a ready currency eviry where. For it cannot reafonably beprefumed that people would refufe notes that are immediately convertible into money at par^ when at prefent they make no fcruple to accept of warrants or bills that are not by the Government converted into money till fix or twelve months after.

If the Parliament Bank fhould be zealoufly pa- tronized l)y the landed Gentlemen as a really Na-

2 tional

( 48 )

iioHdl injliiution^ and its notes fhould have a vigo- rous currency among manufadurers and tradefmen in the remote parts of the ifland, the adminiftration might difregard the invidious infinuations, and ma- licious undermining of the monied men, who have not now fuch influence over the minds of the people, as they had twenty years ago, when they had the art to get their private inierefts preferred to the interefl: of the Public. A refolution of the coun- try Gentlemen, at the quarter-feffions of the Coun- ty, to give the preference to the Parliament Notes in all payments *, would probably fecure their

currency

* Since the above was written, we have (ctn the country GeHtlemen exert their influence very properly in putting a flop 19 the too diflfufive circv»Ution of private notes ; confequently it vvould be no lefs in their power to promote the circulation of Parliament Notes, which inflead of adding to the burdens *they now bear, would be the means of eafmg them. The (f(;>Howing 3ppear«d in the London Evening Poft of the ift of June, 1763, *' At a general meeting of the Gommiffioners of *' fupply for the county of Aberdeen, held on the 30th of ♦« April laft, all the Gentlemen prefent, except John Ding- ** wall of Ranniefton, and John Dyce of Tullygrieg, refolved, " tliat after the firft Pay of July next, they would not receive " in payment any five fhilling notes, iflued by any private

" perfon.

( 49 )

currency againft all the cavils of the monied men ; and in a few years we might hope to fee the Par- liament Notes, in as great credit as thofe of the Bank of Amfterdam ; that is^ be preferred to cafh itfelf.]

But if the eftablifhment, upon trial, fhould not be acceptable to the generality of the nation, which is not reafonably to be apprehended, It might then be difcontinued next fcfilon of Parlia- ment, and a new Charter be granted to the Bank of England, or to any other private Company that Ihould offer the belt terms. 1 fay, to any other Company that fhould offer highed for fuch

'* pericn, or any private banking Company whatever ; and they " referred to the confideration of :he next general meeting, to be <* held on the 23d of May, fo much of the motion then made, as " regarded the notes' ilTued by the banking Companies in Glaf- *' gow." To the honour of the Gentlemen of the county of Aberdeen, they have been the foremoft in checking thfe frauds and impofitions of the money-dealers. , Their example has late- ly been followed by the counties of Edinburgh and Linlith- gow ; and in time we may exped to fee the Gentlemen m every county in Great Britain roufed to purfue their own and the nation's intereft, which has too long given place to the mo- nied interell, that now fpreads like a gangrene over ihe whole State.

G a mo-

( 50 )

a monopoly ; for it may, I think, eafily be de* monftrated, that the Bank of England, for a re- newal of their Charter for twenty years, and the other advantages they receive from the Govern- ment, ought to give double to what they have at any time formerly given.

But as this is a fubjed foreign to what I am at

prefent treating of, I (hall not here enlarge upon it.

I (hall only make an obvious remark upon the

following obfervation of an author, who wrote in

the beginning of this century. '' In the year

*' i^97> it was pleaded, he fays, by a zealous

*' writer for the Bank, as one way to enable them

*' to fupply the Kingdom's occafions with money,

*' that feveral branches of the King's taxes and

" revenues fhould pafs through it 5 and it has

** been faid, that they would give a million of money

*' for this privilege, which has never yet been

<' granted, but exprefsly prohibited by Parliament,

*' excepting for a fmall time, and in an extraordi-

" nary cafe."

What would this author have thought, if he had fcen three millions of national taxes palTing

through

{ 5^ ) through the hands of the Bank of England, who inftead of paying any equivalent for fuch an in- dulgence, pretended that the Government was ob- liged to them for taking care of their money. If the Bank of England would, in the year 1697, have given a million for the handling of fome branches of the King's taxes, which were then but incon- fiderable, what ought they now to give, when they receive annually three millions of thofe taxes, which are a fund for the circulation of three or four times as many millions of paper ?

The END.