631
3Of Credit good & counterfeitbad, & of the usefulness of the
first & danger of the last. former.
p. 13Mr P, (sect 26) tells us that the allowing of paper to pass as money must have
(& we have found by experience it has had) yethe same effect as yethe permission
of two sorts of coyn one false & little worth little & the other time & valua
ble. Here he callscompares all paper credit to false money & a little after (sect 27) he adds
that paper when it passes for money is as a false coyne. I answer that there
are two sorts of paper credit, the one good upon the other counterfeit, the
first upon good security, the other upon more upo credit with it. without it.one good orthe others bad. The good is upon good security &
may be compared to good money
The
first is good & may mostmost properly be called d circulatinyg security the other was
counterfeit
the bad is upon bad security or without any security at all
takesecurity & may be compared to counterfeit money.. The first I defend, the other Mr P. opposes. For credit
ing paper credit or to speak more pap
Tis opinion thatpaper security if it be godod is not of yethe same intrinsic value with good money. If security
upon a Bond or Mortgage or Bill of Exchange or a Bank Bill &c be good, its as good
as money. For otherwise no man would part wthwith his money upon such security.
Good security is a phrase for wchwhich signifies security of yethe same value with
money. For otherwise men would not part with their mo So long as we beleivebelieve
it good so long we are content with it in lieu of orour money & when we
begin to suspect its goodness we call it or money & givereturn it for take in orour money
& return back yethe security. Tis mere opinion that sets a value upon money
we value it because with it we can havepurchase all sorts of commodities for it & the same
opinion sets a like intrinsic value upon circulatingpaper security. For We value it because
with it we can purchase all sorts of commodities & money too. All the differ
ence is that the value of gold & silver is set upon their internal substance or matter
& therefore called intrinsic & that the value of circulating securityof paper credit security upon the apparent form of the writing & therefore called extrinsic & that yethe value of yethe former
is more universal then that of yethe latter. But if Gold & Silver be prefera
ble to credit theirpaper circulating paper security for their more universal value & circulation then for yethe same reason good circulating security
is preferable to Bonds & Mortgages wchwhich have no circulation. For by circulatingion they
areit paper security is rendred more usefull.. One sort of paper credit are
Bills of exchange. These are so necessary to Trade that without them
Trade could not be carried on, & their use consists in paying of debts wthwith
out the trouble hazzard & tediousness of sending of money from nation to nation place to place. The like is
done by Bank Bills Exchequer Bills & other sorts of good paper credit. And
this makes such dispatch in business as enlarges Trade exceedingly, as is
very planeplain by yethe great strop put to business & trade at prsentwhich the by yethe sinking
of paper credit a month ago. last Ianuary this winter put to business & trade.
Nor of is this desired
by Mr P. p 13 But he Mr P. tell us that we cannot be certain that plenty of
coyn will be obteined by a large trade for unless trade be good as
well as great it may happen with a nation as with particular men that
are often undone by enlarging their trades too far. I answer that The
objection lies against Trade as well as against credit & not against either
but against the excess of both., If & so makes as much against virtue as against
paper credit because the virtue it self by running into extremes become vice
If the too much credit & trade by unsafe let us use the have them in a mode
rate degree.
But he adds thosate the increasing of orour trade by more paper will have a
natural tendency to enlarge those trades that are carried on by the exportation
of orour coyn or Bullion, but how it can or will encourage
any
any trade, that will bring in Bullion (wchwhich are yethe trades that are
grounded upon yethe labour of orour people) should be made out before
we make any addition to yethe paper credit we have.
p 16 Mr P. allows that paper credit may be used sometimes as a cordial
in cases of necessity but not as constant food & instances reccons the first ExcheqrExchequer Bills
issued out in yethe late warr to be of this kind & ytthat it may be convenient
upon pressing occasions to make us of yethe same method thereafter provided such Bills be issued
out upon some fund & not for more then yethe tax may yeildyield & be
paid off when yethe money comes in. For, saith he, the danger of using paper
as money does not arise from yethe immediate use of the paper but
from yethe misapplication of ytthat deposit & there for that reason he advises
that as such paper cannot be discharged finally discharged but by payment
of money so coyn so care should be taken to preserve coyn in yethe nation for
that piurpose. He saith also that as such a way of giving a supply to
the nation publick may be convenient in cases of necessity so it may be
necessary to have a Bank in yethe City for yethe keeping of money & yethe
ease of making payment by assignmtassignment, but in no case to allow of Notes
& Bills to pass as money unless a pdepositum be secured. And By all this
he allows paper credit so far aswherever yethe security is good, & so far thus f
so far we are agreed.I agree with him.
But then he seems to doubts whethser any paper credit be
upon good security except where there depositum is a book in yethe
City or We are also agreedI agree wthwith him also that where
that where
there is no deposition or
yethe
deposition is in danger of being withdrawn the security is not go bad &
the paper credit to be condemnedunsafe.
& such paper credit (not good circulating security) I would compare to counterfeit
money & say that it may be used sometimes used as a cordial ins cases of necessity (like
the brass money of K.King IJames in Ireland) &but is not to be used as constant
good. And of such bad security This sort of Credit Paper credit Mr P. seems to understand when he com
pares it to counterfeit money & says that it is to be used only as a
cordial. Thus far there For he speaks of credit where the deposit is in danger of being withdrawn.
So then the dispute against Paper Credit in general is at an end
& the Question wchwhich remains is only about the goodness of the security
of the safety of the Deposit on wchwhich this or that sort of Paper credit
is grounded.
Credit upon a standing Bank if equal value is allowed to be good
And Credit upon land security is as good
And so is credit upon Parliamentary funds so long as the
Government lasts & there is but money enough of our own to pay Taxes.
Of this kind are Excheqruer bills, Bank of England Bills, Mault Tickets,
Million Lottery Tickets, Annuity Tickets &c AndBut this security is weakended by
the stocks of Forreigners in those funds. Five millions of money by circulating will pay a debt of 20 millions
to orour own people, but it will not pay a debt of six millions to Forreigners. Their money is no safe depositum
The credit of particular Merchants is more apt to fail then
ytthat of parliamtparliament unless in Barrs & yet must be tenderly dealt with because of the life of their trade
But Mr P represents &c
And so the Question wchwhich remains is
only about ytthat security the goodness ofof paper on the several sorts of of paper credit on ytthat several sorts of security.
Credit upon a standing Bank of equal value is allowed to be good.
And Credit upon land security is as good.
And so is credit upon Parliamentary funds so long as ytthat Govern
ment lasts & there is but money enough to pay Taxes.
Of this kind are
excheqrexchequerBills, Bank of England Bills, Mault Tickets, Million lottery Tickets, Annuity Tickets &c
†
† The credit of particular merchants is more apt to fail & yet
must be tenderly dealt with because the life of their trade.
But Mr P. represents &c
But Mr. P represents that Paper credit encourages only those trades
wchwhich export orour money & when yethe money is gone wchwhich should I credit, & by doing ytthat circulating it instead of money sets money at liberty to be exported & when the money
is gone the credit sinks for want of a depositum. I answer that paper credit
by making great dispatch in business promotes all trades as well good as bad as in manifest by the stop put to trades this
winter by yethe want of it,;
that it promotes yethe bad trades most (that is such as export orour money) only by
promoting luxury in forreign commodities & p if that luxury be checkt (as
it may be wthwithout destroying tradecredit) yethe Objection ceases, & its better to check
luxury then tradecredit) wchwhich is the life of trade; & that Cred Cred paper credit
that& yethe coynage Act in yethe two last reigns notwithstanding this luxury we got brought in much
more gold & silver to yethe Mint by trade then ever came in before, that by trade
alonewas brought in by trade alone before
& that if as yethe strongest poisons rightly used b duly prepared & applied become the best medicines so those trades wchwhich we no complain of for exporting orour money,
if we can but check our own luxury in forreign commodities, may like the strongest poisons in medicine be
come the most beneficial to us of any others by furnishing orour neighbours
wthwith those commodities to drain away their money; but if we part with paper
credit to check those hurtful trades, we check all forreign trade in general & leave
the hurtfull trades to orour neighbours who when ever we will make us pay
dearer for those forreign commodities then orour own merchants do, so that we
shall632
shall never be able to grow rich hereafter.
I recommended credit for lowering Interest, this because low interest is to yethe advantage of trade & business: Mr P.
replies that yethe argumtargument may be as good for limiting the rates of letting land because the cheapness of
provisions may as much encourage trade as the cheapness of provisions. I answer
that if provisions be cheap & other commodities dear the husbandlanded man will soon be
beggared. Care must be taken of orour land & native product as well as of orour trade &
paper credit is good for both. By lowering interest it raises the price of land &
furnishes all the busy part of the nation (thus badmen Grasiers Artificers Shopkeepers, Merchants) with money at easy rates to carry on
their several imployments & is good for every body but the idle Vsurer & them
that cannot live but upon yethe interest of their money. It may prejudice Orphans who are to live upon the interest of their mone portions, but its good for yethe whole nation in general & may enable father to provide
better for their children & yethe publick is most to be regarded.
The Question about paper credit must no is comparative. The arguments
against it must not be considered alone but compared wthwith yethe argumtsarguments for it
& judgmtjudgment given on yethe weightier side.
p. 10 l. 20 —to p. 12 l 23 against yethe circulation of credit.
p 12 l 23 — p 16 l. 2 against more credit.
p 16 l 2 — p 17 l 27 What credit allowable & how long oo
p 17 l 27 p 19 l 9 Care to be taken against exporting orour coyn.
part. There might be a third or 4th part fit for culling but all Importedrs
did not cull & th among yethe Guineas of K.King Ch. & K.King Ia. there are still many weighty
of full weight notwithstanding the wearing. If I should allow a fift part to
be culled out & recoyned there would remain 7121952li. 15s. 06d. To wchwhich add
the Guineas coyned from Decemb 31 1699 to amounting to
& the Lewid'ors & Spanish Pistoles wchwhich are now recconed at a million
& an half & the whole gold coyn will be above 8800000li Of wchwhich if
we should suppose an quarter of a million hundred thousand pound to have been exported & melted down at home & abroadabroad
there wouldwill in Holland & France there will remain above 8 millions in yethe nation besides broad gold. in the nation besides I broad gold & if we I say but 8 millions as weI did in my former paper there will remain a wast of above 300000li to answer small objections.
p 5 If any gold hath been bought wthwith the clippings of silver monies melted down into Ingotts & exported, that 'tis allowed for in my former paper 5 millions wast of yethe silver monies
p. 5, 6And if any gol the like is to be said of gold brought in by ForreinersForreigners to get by loans upon publick funds &c. For since yethe year 17694 we have paid orour debts deb forreign debts in any thing but gold. And if any suchsuch debts wchwhich now remain unpaid, they are not to be received in yethe b considered in recconing yethe what m quantity of monies now in yethe nation, but must be referredallow toaccounted for in yethe ballance of trade wchwhich at prresent is on orour side.
Mr P. affirms that
All wchwhich being considered I do not see but that yethe recconings I set down in my former paper come neare yethe truth vizt that oin yethe year 1689 when we were richest we had orour silver monies we had about 12 millions ofin silver monies (not in tale but standard value) ,& about 5 millions in Guineas & Pistoles, in all 18 millions besides b broad gold. And in Decem yethe year 1700 we had about 7 millions ofin silver monies milled & hammered & about 8 million of in Guineas & Pistoles besides broad Gold & the Guineas coyned 1700,, In all we had about 15 millions which is about 2 millions less then before.. In making this estimate I do not pretend to be exact. I have used the best of my judgment Where I could meet with exact recconings I follund them & in yethe rest I used the best of my judgment.
Where I have erred I desire to be convinced by stricter ways of recconing then those wchwhich I have followed used. For the pro Mr P having undertaken to write against Paper credit the proof lies on his side & am ready to submit not to stricter ways of recconing then my own.
All wchwhich is as much as to say that paper may be lower interest but is not a natural way of doing it because it tends to enlarge the bad trades wchwhich export orour money & when yethe money is gone the want of it will advance yethe rates of Interest.