is like a rose, fresh and fair and sweet. I am glad I can
The Dutch for the same reason set up the Bank of Amsterdam. Their Money was Silver, but their Trade was so great as to find payments even in Silver inconvenient. This Bank like that of Sweedland, is a secure Place, where Merchants may give in Money, and have credit to trade with. Besides the convenience of easier and quicker Payments, these Banks saves the Expense of Casheers, the Expense of Bags and Carriage, losses by bad money, and the Money is safer than in the Merchants Houses, for 'tis less lyable to Fire or Robbery, the necessary Measures being taken to prevent them. Merchants who have Money in the Bank of Amsterdam, and People of other Countries who deal with them, are not lyable to the Changes in the Money, by its being allay'd or alter'd in the Denomination: for, the Bank receives no Money but what's of Value, and is therefore call'd Bank-money; and tho rais'd in current payments, it goes for the Value it was pledg'd for in Bank-payments. The Agio of the Bank changes a Quarter or a half per cent as current Money is more or less scarce. Banks where the Money is pledg'd equal to the Credit given, are sure; For, thos Demands are made of the whole, the Bank does not fail in payment. By the Constitution of this Bank, the whole sum for which Credit is given, ought to remain there, to be ready at demand; Yet a sum is lent by the Managers for a Stock to the Lumbar, and 'tis thought they lend great Sums on other occasions. So far as they lend they add to the Money, which brings a Profit to the Country, by imploying more People, and extending Trade; They add to the Money to be lent, whereby it is easier borrowed, and at less use; and the Bank has a benefit: But the Bank is less sure, and tho none suffer by it, or are apprehensive of Danger, its Credit being good; Yet if the whole Demands were made, or Demands greater than the remaining Money, there could not all be satisfied, till the Bank had called in what Sums were lent. The certain good it does, will more than ballance the hazard, tho once in two or three years it failed in payment; providing the Sums lend be well secured: Merchants who had Money there, might be disapointed of it at demand, but the Security being good, and Interest allowed; Money would be had on a small Discompt, perhaps at the Par. Last War, England set up a Bank to have the Conveniencies of that at Amsterdam, and by their Constitution to encrease Money. This Bank was made up of Subscribers, who lent the King 1200000 lib. at 8 and a third per cent for 11 years, on a Parliamentary Fund; And were priviledg'd Bankers for that time. The sum due by the Government was a Security to the People, to make good any Losses the Bank might suffer. This Bank was safer than the Goldsmiths Notes in use before. It made a great Addition to the Money, having a much greater Sum of Notes out, than Money in Bank. And the Sum lent the King, which was the Fund belong'd to the Subscribers, was negotiat at Profit, and had the same Effect in Trade as Money. I don't know how their Notes came to be at discount, whether from the Circumstances of the Nation, or from ill Management. The Fund of the Bank of Scotland was a 100000 l. of which a Tenth was pay'd in. This Bank was safer than that of England, there being a Register whereby most Sums lent were secured. Its Notes went for 4 or 5 times the value of the Money in Bank, and by so much as these Notes
went for more than the Money in Bank; So much was added to the Money of the Nation. This Bank was more useful than that of Amsterdam, or England; Its Notes passing in most payments, and through the whole Country: The Bank of Amsterdam being only for that Town, and that of England of little use but at London. The stop of Payments which hapned to the Bank of Scotland, was foreseen, and might have been prevented. The Consumption of Forreign Goods, and Expense in England, being more than the Export of Goods did pay; the Ballance sent out in Money lessen'd the Credit of the Bank. For as Credit is volunatary, it depends on the Quantity of Money in the Country, and Increases or Decreases with it. Coyning Notes of one Pound supported the Bank, by furnishing Paper for small payments, and thereby preventing a part of the Demand for Money: by these Notes the Bank might have kept its Credit, till other Methods had been taken to supply the Country with Money; had not a Report of raising the Money occasion'd an extraordinary Demand, which in few days exhaust the Money in Bank, and put a stop to payments. It would not have been easie in that scarcity of Money to have got enough to support the Bank, tho Men of the best Credit had undertaken it; That Report of raising the Money having only occasioned a Demand from the People of Edinburgh. In a short time Notes would have come in so fast from the Country, that what Money could have been got, would not have answer'd the Demand. If the Privy Council had lower'd the Money, the English Crown to 5 sh. and the other Money in proportion, to take place 2 pence p. Crown in 3 days, and the other 3 pence in a Month; the occasion of the Demand being remov'd, in all appearance Money would have been return'd to the Bank. If the state of the Bank had been known, or suspected by the People; such a Proclamation would have had the same effect, tho the stop of payment had then happen'd. In that case, the support of the Bank might have been the Narrative of the Proclamation; The security being good, few or none would have kept their Money to loss, rather than return it to the Bank. And if in 3 days Money had not come in so fast as expected, their Lordships by a 2d Proclamation might have lower'd the Crown to 5 sh. to take place then, and 6 pence more in 3 days. When the Credit of the Bank had been re-establish'd, the Money might have been cry'd up, if that had been necessary, the Crown to 5 sh and 5 pence, and the other money in proportion as it was before. Some are against all Banks where the Money does not lie pledg'd equal to the Credit. 1. They say the Demand may be greater than the Money in Bank. Secondly, If we are declining in our Trade, or Money, we are not at all, or are less-sensible of it: And if the Bank fail, we are in a worse condition than before. To the first it's Answered, tho the Nation had no Benefit by the addition the Bank makes to the Money; Nor the People by being supply'd with Money when otherwise they could not, and at less Interest; And tho the Proprietors had no gain by it: the other Conveniencies, as quicker and easier Payments, etc. are more than equal to that hazard; Or Bank Notes, Gold-smiths and Bankers Notes, would not be prefer'd to Money, every Body knowing such a stop may happen to the Bank, and that Gold-smiths and Bankers may fail. The other Objection is the same as to say, a Merchant who had a small Stock, ans was capable of imploying a greater; If a Sum were
offer'd him without Interest, equal to what he had, and more as his own encreas'd, should refuse it, because he might fancy himself Richer than he was, and if his own Stock decreas'd, that Sum lent would be taken from him. If 15000 is suppos'd the Money in Bank, and 75000 lib. of Notes out; 60000 lib. is added to the Money of the Nation, without Interest: For what is pay'd by the Borrowers, is got by the Proprietors. As the Money of the Nation encreases, the Credit of the Bank encreases, and the Sum of Notes out is greater; And so far from making the People less sensible of the condition of the Country, a surer Judgment of the state of Trade and Money may be made from the Books of the Bank, than any other way. If Trade can be carried on with a 100000 lib. and a Ballance then due by Forreigners; The same measures, and a greater Quantity of Money, would make the Ballance greater. Nor is that Additional Money the Bank furnishes, to be suppos'd will be lost, if by a Ballance due from Trade the Silver Money encreases: That Credit may fail from an accident when Money is plentiful, and would soon be recover'd; 'Tis only lost by a scarcity of Money. Such a Credit may support Trade, in cases where without it Trade would sink, but cannot do prejudice. Another Objection is made against the Bank. That it encourag'd the Exportation of Money, by furnishing Sums in such Species as were of most value Abroad. To answer this Objection, I shall make a Supposition. A.B. Merchant has occasion for a 1000 lib. in Holland, and desires C.D. Banker to give him a Bill for that value; There is no Money due in Holland to Scots Merchants, so C.D. must Export the Money to pay the Bill he Draws: But there being no Bank, nor any possibility of getting a 1000 lib. in 40 Pence Pieces, he sends out Money of different Species. This does not hinder the Money to go out, but makes the Exchange dearer by 2 or 3 per cent, then it would have been if 40 Pence Pieces could have been got. And tho no other Money were left, but old Marks, if a Ballance is due these will go out, tho not worth 10 Pence: The Exchange will be so much higher, the profit of Exporting is the same; And so far from doing hurt to the Country, the Bank by furnishing such pieces as could be Exported to least loss, kept the Exchange 2 or 3 per cent lower than otherwise it would have been, and saved yearly the sending out a considerable Sum to pay a greater Ballance, the higher Exchange would have occasioned.
The Several Measures now propos'd, consider'd. As, raising or allaying the Money. Coyning the Plate. Regulating the Ballance of Trade. Or, Re-establishing the Bank.
When I use the Words, Raising the Money, I desire to be understood raising it in the Denomination; For I do not suppose it adds to the Value. There is no way Silver can be made more valuable, but by lessening the Quantity, or encreasing the Demand for it. If the Export and Consumption of Silver be greater than the Import, or the Demand be encreas'd; Silver wil be of more Value. If the Quantity Imported be greater than the Quantity Exported or Consumed, or the Demand lessen'd; Silver will be of less Value.
If raising or allaying the Money could add to its Value, or have any good Effect on Home or Forreign Trade; Then no Nation would want Money. A 100 lib. might be rais'd or allay'd to 2, to 10, to a 100 times the Denomination it had, or more as there were occasion. But as 'tis unjust to raise, or allay Money; Because, then all contracts are payed with a lesser Value than was contracted for; And as it has bad effects on Home or Forreign Trade: So no Nation practices it, that has regard to Justice, or understands the nature of Trade and Money. If A.B. sell 12 Chalder of Victual for a 100 lib. payable in 6 Months, with which he is to pay Bills of Exchange of that Value, to be drawn on him then from France for Wine he has Commission'd; and in that time the Money is rais'd or ally'd to double, the 100 lib. A.B. receives will only pay half the Bill he has to pay, being only equal to 50 ib. of the Money he Contracted for. Nor will that 100 lib. buy the same Quantity of Goods of the Country, that a 100 lib. brought before: It will pay where Money is due, and satisfie past Contracts made upon the Faith of the Publick, because the Prince says every Man shall take half what is owing him in full Payment. But in bargains to be made, the Value of the Money will be considered; Goods will rise, tho perhaps not to the Proportion the Money is rais'd: And such Persons as do not raise their Goods, equal to the Money, are impos'd on. When 6 pence is raised to 12 pence, the 6 pence is worth 12 pence; But the value of the pence is lower'd to Half-pence. To explain this matter better, I shall suppose when Money is rais'd, Goods rise, or not. If Goods rise, then raising the Money has not the effect design'd. If a piece of serge is sold for 40 sh. and the Shilling be raised to 18 pence, the piece of Serge will be sold for 3 pound. This adds to the Tale of the Money, and pays Debts with two Thirds of what is due, but does not add to the Money. this is the natural consequences of raising the Money; For, it is not the sound of the higher Denomination, but the value of the Silver is consider'd. If, when Money is rais'd, Goods keep the Prices they had before. Then all Goods exported are sold for a lesser Value abroad, and all Goods imported are sold dearer. (Ex.) A Half-crown is rais'd to 40 pence, and that half-crown buys the same Quantity of Goods 40 Pence bought before; Then the Merchant who sends Goods to Holland, to the value of 300 lib. which are sold for 390 lib. there, would gain 220 lib. on the value of 300 lib. exported: Because, 390 lib. in Holland would be equal to, or worth by Exchange at the Par, or sent in Bullion, 520 lib. in Scotland. That trade would bring no more Profit to the Nation, than when the Return of the Goods yielded only 390 lib: For, 390 lib. before it was rais'd, had the same Quantity of Silver, that 520 lib rais'd Money would have; and bought als great a Quantity of Forreign Goods. But that Trade would be so profitable to the Merchant, that more People would deal in it than could get Goods to buy; and as more Buyers than Sellers would raise the Prices here, so one Merchant underselling the other would lower the Prices in Holland. But tho the Prices kept low here, and our Merchants kept up the Prices Abroad; The Dutch knowing the Goods were so cheap in the Country, would buy none from our Merchants, but Commison them in return of Goods they sent. Suppose the yearly Export first Cost 300000 lib. sold abroad 390000 lib. The Import, and Expense abroad 410000 lib. and 20000 lib.
sent in Money, to pay the Ballance. The Money rais'd one Third, and Goods to keep the Prices they had before, 225000 lib. sent to Scotland in Forreign Money, or Goods, or by Exchange, would buy what was sold abroad for 390000 lib. The Export, Import, and Expense Abroad continuing the same, Scotland would be due a Ballance of 18500 lib. for, tho Scots Goods were sold under the value, yet other Nations would not sell their Goods for less than before; or than they could have in other Places. It may be alledg'd, we have more Product and Manufacture, than is consum'd, or exported; and selling cheaper, would occasion a greater Demand for our Goods Abroad. The Product and Manufacture might be much increas'd, if we had Money to imploy the People: But, I'm of Opinion we have not any great Quantity of Goods, more than what is consum'd or exported. Allow Selling cheaper would occasion a greater Demand; that the greater Demand, would occasion an increase in Product, and Manufacture, to the value of a 1000000 lib. and allow that the extraordinary cheapness of Goods, did not occasion a greater Consumption in the Country: Yet, we would be in the same Condition as before; 20000 lib. would be still due of ballance, and the Improvement would be given to Forreigners for nothing. But this Improvement is imaginary, for tho the Demand encreas'd, yet without more Money more People could not be imployed, so no further Improvement could be made: we would be forc'd to retrench near one half of the ordinary Consumption of Forreign Goods, and Expense Abroad; not having Money to pay the great ballance would be due. Some think Forreign Money being rais'd, would bring in Money to Scotland. Tho the Crown were rais'd to 10 sh. yet if a Ballance is due by Scotland, the Exchange will be above the Par, and 'tis not to be suppos'd an English Merchant will bring Crowns to Scotland, when for a 100 pay'd in at London, he can have 105 or 6 of the same Crowns payed him at Edinburgh. If the ballance of Trade was equal, Forreign Money rais'd, and Scots Money not raised in proportion; Forreign Money would be brought in, and a greater value of Scots Money would be carried out. 'Tis the same loss to a Country when Money is rais'd, and Goods no not rise in proportion: (Ex.) If Forreigners send in Money to buy Goods, and this Money when exported is not valued so high as here; the Return in Goods will be so much less, besides the want of the Profit we would have had on the Export of our Goods. If all Import, and Forreign Expense were discharged, Scotland would then be so much richer, as there was Bullion or Money imported: But, if that Prohibition be suppos'd, Scotland would be richer by keeping the Money at the value it has; Because, a greater Quantity would be brought in, to buy the same Quantity of Goods. If we could be suppos'd to be without any Commerce with other Nations, a 100 lib. may be allay'd and rais'd to have the same effect in Trade as a Million: but, if a Stranger were suffer'd to come to Scotland, he might purchase a great part of the Land or Goods with a small Sum. And a rich Man here would make a very small Figure Abroad. Money is the Measure by which all Goods are valued; and unless Goods rise to the full proportion the Money is rais'd, the Goods are undervalued. If the yearly Value of Scotland in Product and
Manufacture be 2 Millions, at 20 Years Purchase 40 Millions. The Money a 100000 lib. Raising the Money 20 per cent, makes it pass for a 120000 lib. Suppose the Goods rise only 10 per cent, then that a 120000 lib. is equal in Scotland to a 110000 lib. of the Money before it was rais'd; and Buys the same Quanitity of Goods. So, an addition is made of 20000 lib. to the late, and of 100000 lib. to the Value of Scots or Forreign Money, compar'd with the Value of Scots goods: but the measure by which goods are valued, being rais'd in the Denomination 20 per cent; And the Goods rising only 10 per cent: Scotland is near 4 Million, or one Tenth less valuable than before. And any Man who Sells his Estate, will receive a Tenth less Silver, or of any other Forreign Goods for it, than if he had Sold it before the Money was rais'd. France and Holland are given as Examples of raising and alloying the Money. In France the Money is higher in the Denomination than in other Countries, but that does not hinder the Money of France to be Exported. When the Lue d'ore was at 12 Livres were pay'd then at Paris, for a 100 Lue d'ores of the same Weight and Fineness at Amsterdam, and passing there for 9 Guilders Bank Money; So 10 per Cent was got by Exporting Money From France. When the Lue d'ore was rais'd to 14 Livres, that did not make the Ballance against France less; The Exchange continued the same, 110 Lue d'ores tho at 14 Livres were payed for a bill of a 100 at Amsterdam, and the same Profit was made by Exporting Money. If the Exchange hapned to be lower, it ws from the Ballance of Trade due by France being less, and that would have lower'd the Exchange whether the Money had been rais'd or not. But the raising the Money, so far from bringing the Ballance to the French side, keeps the Ballance against France: For, as their Goods do not rise to the full proportion the Money is rais'd, so French Goods are Sold cheaper, and Forreign Goods are Sold dearer, which makes the Ballance greater, occasions a greater Export of Money, sets Idle so many of the People as that Money employ'd, lessens the Product or Manufacture, the yearly Value of the Country, and the number of the People. It's thought the Dutch Coin Lue d'ores, and send them to France, where they pass at 14 Livres. And, that Guineas were sent from Holland to England, in the time of the Clipt Money, because they past there for 30 sh. But these People are misinformed. Ever since I have known any thing of Exchange, a Lue d'ore at Amsterdam whether new or old, has been of more Value by Exchange, than a new Lue d'ore at Paris. And in the time of the Clipt Money, a Guinea in Holland was worth more by Exchange, then a Guinea in England. These who were Ignorant of the Exchange, might buy up guineas or Lue d'ores, to carry to England or France, but they would have got more by Bill. There was a Profit then upon Exporting Guineas and Lue d'ores from England and France to Holland. The Pound English at that time was given for 8 guilders, or under; and the Exchange from Amsterdam to Paris has been these 8 or 10 Years for the most part, considerably above the Par on the Dutch side. I have known the Pound English at 7 guilders 13 Stives, and the French Crown of 3 Livres bought in Holland for 37 Stivers, in London for 39 Pence half Penny. Raising the Money in France is laying a Tax on the People, which is sooner pay'd, and thought to be less felt than a Tax laid on any other way. When the King raises the Lue d'ore from 12 Livres to 14,