Catalogue Entry: MINT00261

Untitled holograph draft memorandum on John Pollexfen's A Discourse of Trade, Coyn and Paper Credit [1697, reprinted 1700].

Author: Isaac Newton

Source: Mint 19/II.608-11, National Archives, Kew, Richmond, Surrey, UK

[Normalized Text] [Diplomatic Text]

Contents

Though agreeing with Pollexfen that excessive reliance on paper credit, especially for luxury goods, is bad for the economy, Newton maintains that judicious and well-regulated use of credit maintains the money supply, keeps down interest rates and promotes prosperity. Disputes the coinage figures cited by Pollexfen as evidence that the introduction of paper money has undermined the coinage, and produces his own detailed account of coinage history since 1640, blaming reductions on changes in international relations, especially war. The principal development has been the increase of gold in proportion to silver in the coinage. This has nothing to do with paper money, but is due to the fact that in Japan and China silver is valued twice as highly relative to gold as in Europe, resulting in a steady export of silver to them and import of gold from them. The benefits of this trade outweigh the disadvantage of diminishing silver reserves so long as they are not too seriously depleted. Advises against amalgamating the two East India Companies to prevent rivalry, as this would create too powerful a body: instead they should be allocated distinct areas of operation.

[Accounts and analyses of this and the following entries (to MINT00269) in Westfall, 618-19, and Craig, NATM, 40-43. Probably written in response to the re-issue of Pollexfen's Discourse: see Westfall, 618, esp. n. 210. See also H1201 for Newton's copy of a related work by Pollexfen.]

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Professor Rob Iliffe
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Scott Mandelbrote,
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