An essay on paper circulation : and A scheme proposed for supplying the government with twenty millions, without any loan or new tax

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.