The Proposal

To supply the nation with money, I propose that 40 commissioners be appointed by parliament, answerable to parliament for their administration, and the administration of the officers under them.

The nomination of these officers being left to the commissioners.

The commissioners have power to coin notes: which notes to be received in payments, where offered.

A committee of parliament will be appointed to inspect the management, and that none of the commissioners be members.

The commission and committee meet twice a year at Whitsunday and Martinmass.

Their meetings will begin 10 days before each term and continue 10 days after each term.

There are 3 ways to the parliament, for giving out these notes:

1. To authorize the commission to lend notes on land security, the debt not exceeding 1/2 or 2/3 of the value at the ordinary interest.

2. To give out the full price of land, as it is valued, 20 years purchase more or less, according to what it would have given in silver-money.

The commission will possess such lands, by wadset granted to the commission or assigneys. The land will be redeemable between and the expiring of a term of years.

3. To give the full price of land, upon sale made of such lands, and disponed to the commission or assigneys irredeemably.

Any person shall have such bonds, wadsets, or estates assigned or dispon’d to them, upon paying in the value to the commission.

The commission will not receive other money than these notes.

No person who has contracted for these notes, shall be obliged to receive silver or metal money.

The commission have not power to coin more than 50000 lib. at a time, and that no more be coin’d so long as there is 25000 lib. remaining in the office.

For 1.5 years, the commission be limited to a certain sum. After that time, they can coin what sums are demanded unless restricted by ensuing parliaments.

These who desire to have money from the commission, give in a note to the lawyers for the commission, a month before the term, of what sums they want, with the rights of the lands they offer in pledge: and that these who have notes to pay in to the commission, give warning 10 days before the term.

The state of the commission, the sum of notes coined, the debt and credit, with the highest number of the different notes, be publish’d every term.

Any person who shall discover 2 notes of the same number, or of a higher number than these publish’d, shall have a 100 lib. reward.

The under-officers be intrusted with the sum of 20000 lib. to change notes with; and that they attend the whole year.

Any member of parliament may inspect the state of the commission.

No notes be coined, money lent, or rights assigned by the commission, but at the terms of Whitsunday and Martinmass: and in presence of at least 20 commissioners, and one third of the committee.

The revenue of the commission, over what pays the charges, and what part the parliament thinks needful to make good any losses may happen to the commission, be applyed by way of drawback, for encouraging the export, and manufacture of the nation.

Paper-money do not rise more than 10 per cent above silver-money; so that he who contracts to[Pg 164] pay in paper, may know what he is to pay in case he cannot get paper-money.

The parliament may enter into a resolve, that the next sessions of this or the next ensuing parliament, the state of the commission be taken into consideration, preferable to all other business: and if found hurtful to the country, the parliament may discharge any more notes to be given out, and order what notes are then out to be called in.

That after 3 months from the date of the act, Scots and foreign money be reduced to the English standard. the English crown to 60 pence, and the other money in proportion to its value of silver. the 40 pence to 38 pence, the new mark to 13 pence[Pg 165] 1/2, the old mark to its weight, the ducatdowns to 68 pence, dollars to their weight. guineas not to pass 22 sh.

That after 4 months no Scots money, (except what shall be coined after the act) nor any foreign money except the English money, be received in any payments, or be sold as bullion but at the mint.

That for what old money or bullion is brought to the mint, the mint return to the full value in new money of 12 pence, 6 pence, and 3 pence pieces; of eleven deniers fine, the 12 pence of 3 drops 3 grains weight, the other pieces to weigh in proportion: the expence of coinage to be payed out of the funds appropriated to that use.

That for 3 months, after the act,[Pg 166] the new money pass for 13 pence, 6 pence half-penny, and 3 pence 1/4.

That after 3 months, bullion and wrought plate be of eleven deniers fine, and 5 sh. and 2 d. the ounce of silver, gold not to pass 4 lib.

The paper-money proposed will be equal in value to silver, for it will have a value of land pledg’d equal to the same sum of silver-money that it is given out for. if any losses should happen, one 4th of the revenue of the commission, will in all appearance be more than sufficient to make them good.

This paper-money will not fall in value as silver-money has fallen, or may fall: goods or money fall in value, if the increase in quantity, or if the demand lessens. but the commission[Pg 167] giving out what sums are demanded, and taking back what sums are offered to be returned; this paper-money will be keep its value, and there will always be as much money as there is occasion, or imployment for, and no more.

If a contract for paper-money could be satisfied by paying the same quantity of silver money, then that paper-money could not rise above the value of silver, and would fall with it. but as the paper money is a different species from silver, so it will not be lyable to any of the changes silver money is lyable to.

Tho’ the parliament could give silver money to the people, in as great quantity as there were occasion: the parliament could not justly[Pg 168] know what sum would serve the country, for the demand changes. if the quantity of money is less than the demand, the landed man is wronged: for a 100 lib. then being more valuable, will buy a greater quantity of the landed mans goods. if the quantity of money is greater than the demand, the money’d-man is wronged, for a 100 lib. then is not so valuable, so will not buy the same quantity of goods a 100 lib. bought before.

If the commission do not give out money when it is demanded, where good security is offer’d; ’tis a hardship on the person who is refused, and a loss to the country: for few if any borrow money to keep by them; and if employ’d it brings a profit to the nation, tho’ the employer loses.

If the commission did not take back what sums were offer’d to be return’d, it were a hardship on the money’d man, who has a sum payed him, and does not know how to employ it; and the quantity being greater than the demand for it, would fall in value.

After the method propos’d, the quantity being always equal to the demand for it, it will keep its value, and buy the same quantity of goods 50 years hence, as now: unless the goods alter in their value, from any change in their quantity, or in the demand for them.

Suppose this commission had been establisht 200 years ago, land then at 14 years purchase, money at 10 per cent, victual at 8 shil. and 4 pence the chalder, and paper money to have been[Pg 170] given out upon land; 8 shil. and 4 pence of that paper money, would now have been equal to a chalder of victual, and to 8 lib. 6 sh. and 4 pence silver-money: because silver-money having increas’d in quantity, more than the demand; and having been alter’d in the denomination, has fallen to one 20th of the value it had then. nor would the landed-man have receiv’d less for his victual, than now; for that paper-money would have bought him 20 times the quantity of goods, silver-money will buy.

Land has a more certain value than other goods, for it does not encrease in quantity, all other goods may. the uses of goods may be discharged, or by custom be taken from them, and given to other goods: the use of bread may[Pg 171] be taken from oats, and wholly given to wheat: the use of money may be taken from silver, and given to land: the use of plate, and the other uses of silver as a metal, may be taken from silver, and given to some other metal, or some mixture that may be more fitted for these uses. in any of these cases, these goods lose a part of their value, proportion’d to the uses are taken from them: but land cannot lose any of its uses. for as every thing is produced by land, so the land must keep its value, because it can be turn’d to produce the goods that are in use. if wheat is more us’d, and oats less, as the land can produce both, it will be turn’d to produce what is most used, because most valuable.

This money will not receive any additional[Pg 172] value from being used as money, so the receiver will be certain he can be no loser, tho’ after a term of years the use of money is taken from it. the land will receive an additional value, from being used as the pledge upon which the money is issued; and that additional value would be greater than what silver received: because, tho’ land be used as the pledge to issue out money upon, yet none of its other uses would be taken from it: silver cannot be us’d as money and plate at the same time. but as land is in greater quantity than there will be occasion for to give out money upon; so the additional value it receives, will not be near so great as that silver-money has receiv’d.

Suppose the additional value land[Pg 173] received were one 4th, land now at 20 years purchase, would then be at 25 years purchase. if the parliament call’d in the paper money, he who had paper money could be no loser by it, tho’ the land lost the additional value; for no more of it is given out than the value of the land abstract from its use as money. whereas if silver was no more used as money, he who had silver, would lose a half, or 2 thirds; silver falling then to its value as a metal.

So that this paper money propos’d, having a better value than silver; and receiving no addition to its value, from being used as money; and not being lyable to any change in its value, the quantity and demand encreasing and decreasing together: it is so far more qualified to be the measure by[Pg 174] which goods are valued, the value by which goods are exchanged, and in which contracts are made payable.

The other qualities necessary in money, are,

1. Easy of delivery.

2. Of the same value in one place to what it is in another.

3. To be kept without loss or expence.

4. To be divided without loss.

5. To be capable of a stamp.

Paper money has these qualities in a greater degree than silver.

1. It is easier of delivery: 500 lib. in paper may be payed in less time, than 5 lib. in silver.

2. It is nearer the value in one place to what it is in another, being of easier carriage.

[Pg 175]

3. It can be easier kept; taking up less room. and without loss; because it may be exchanged at the office. the consumption of paper is not of so much value as the consumption of silver: the consumption of the paper is a loss to the office, the consumption of silver is a loss to the owner.

4. It can be divided without loss: because it may be changed for lesser notes at the office.

5. It is capable of a stamp, and less liable to be counterfeit.

The practice of most trading nations confirms, that paper is more qualified for the use of money, than silver; providing it hath a value. in Holland silver is pledg’d, and paper is used as money. that land pledg’d is a better value than silver pledg’d, is evident[Pg 176] from what has been said. in England, before the bank was set up, gold-smiths notes were received in payments preferable to gold or silver: 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-smith’s breaking, of 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 as good, the administration[Pg 177] may be more safe and satisfactory than that bank, or any other private bank; because it is more public, 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 managers; when the managers 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 management, 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 3 months, 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[Pg 179] time it was promised, or that the person he was owing to would receive it.