Which shows that Paper Money had all the Qualities necessary in Money, so much more than Gold or Silver, as to equal the Danger of a Gold-smiths breaking, or which there were many Examples. Mr. Lock, pag. 7th on Interest of Money, says, that one Gold-smith's Credit (being usually a Note under one of his Servants Hands) went for above Eleven hundred thousand Pounds at a time.
The Notes of the Bank in Scotland went, tho there was no Money in the Bank, and tho their Acceptance was voluntary. The Security for the Paper propos'd will be als Good, the Administration may be more safe and satisfactory than that Bank, or any other privat Bank; because it is more publick, and the Commission has not any share of the profits.
Besides it will not be liable to the Hazard Banks are liable to, from the Sale of shares.
And it seems strange that the Administration of such a Commission should be doubted, when the Parliament has the Nomination of the Manadgers; when the Manadgers are to be accountable to the Parliament;when the Trust is to be so small, for more Notes cannot be Coin'd so long as 25000 lib. is in the Office; a Committee of Parliament is to be appointed to inspect the Manadgement, the Books are to be open to the Inspection of any Member of Parliament, and the State of the Commission is to be published in Print.
Since the Notes of the Bank went upon a voluntary Acceptance, tho there was no Money in Bank; 'tis Reasonable to think the Paper Money propos'd will at least have the same Currency: Being Current by Law does not make it less valuable. He who took Bank Notes, could not be sure the Bank would be in a Condition to give Money for them; and the Person he was to pay Money to, might refuse them: So he was more uncertain, than if they had been current by Law.
The Silver Money being to fall betwixt 8 and 9 per cent in 3months, it is not to be suppos'd that Silver will be prefer'd to Paper Money; since the Notes of the Bank, which is Paper upon the same Fund, went at the ordinary Interest: And tho the Receiver was not certain of the Money at the time it was promised, or that the person he was Owing to would receive it.
It may be Objected, that Paper went because Silver could be got for ti when Demanded, or at a certain time.
That was very reasonable, but would not be so in this case: The Security pledg'd for that Paper Money, was Silver. The Security pledg'd for this Paper Money, is Land. This Money has no Relation to Gold or Silver, more than to other Goods. And it were more extravagant to say, I won't take a 100 lib. in Silver for the Goods I sell;because I am not sure if 6 Months hence, it will buy me such a Quantity of Wine, for Wine may grow dearer.
4 Crowns won't buy a Guinea, tho they were Coin'd for the same Value; nor won't buy the 10th part of Goods 4 Crowns bought 200 Years ago, yet Silver is receiv'd as a Value, and Contracted for, tho its Value lessens every Year, and tho 'tis not perhaps worth above a Third of what 'tis given or Contracted for, abstract from the Use of Money.
This Paper propos'd will not only keep its Value; the encrease of the Quantity decreasing as the Demand decreases: But likewise the Land pledg'd is als valuable as the Paper given out, abstract from its Use as Money, and encreases in Value.
The Objection may be made against Silver Money, and with good Reason; for it falls faster in its Value than other Goods, and may soon be reduced to its Value as a Mettal.
The Paper Money Propos'd is equal to its self; but to continue equal to such a Quantity of any other Goods, is to have a Quality that no Goods can have: For that depends on the Changes in these other Goods. It has a better and more certain Value than Silver Money, and all the other Qualities necessary in Money in a much greater Degree, with other Qualities that Silver has not, and is more capable of being made Money than any thing yet known. Land is what is most valuable, and what encreases in Value more than other Goods; so the Paper Money issued from it, will in all appearance not only keep equal to other Goods, but rise above them.
Because of the extraordinary scarcity of Silver in Scotland, and the Inclination People have to it, from its having been long used as Money; It may be necessary to restrict its Price to 5 sh. and 2 pence the Ounce: But it will soon fall from that value of Paper, if it come in greater quantity into Europe, than is exported or consum'd.
Suppose and Island belonging to one man, the Number of Tennents a 100, each Tennant 10 in Family, in all a 1000; by these the Island is labour'd, part to the product of Corns, the rest for Pasturage:
Besides the Tennents and their Families, there are 300 Poor or Idle, who live by Charity. There is not Money, but Rents are payed in kind, and if one Tennant has more of one Product, and less of another than his Family has occasion for, he Barters with his Neighbour.
The People of this Island know nothing of Manufacture; The Island being plentiful, furnishes enough for their Consumption, and an Overplus which they exchange on the Continent for Cloaths, and what other Goods they want: But as that Overplus is only sufficient to make a Return of such a quanity of Goods as they consume yearly, so they have no Magazines of their own or forreign Goods to serve them in bad years, nor no Magazines of Arms, Ammunition, etc. for their defence.
'Tis propos'd to the Proprietor, that if a Money were establish't to pay the Wages of Labour, the 300 Poor might be imployed in manufacturing such Goods as before were exported in product; And as the 1000 that labour the Ground were idle one half of their time, they might be imployed so as their additional Labour would be equal to that of 500 more, which would lessen their Import by providing them with a part of such Goods as before they brought from the Continent, and raise their Export to 3 or 4 times the value it had: The return of which would furnish them with greater Quantities of Forreign Goods than they wanted for Consumption, which might be laid up in Magazines.