'Of Credit good & bad, and of the usefulness of the former' (changed from 'Of Credit good & counterfeit, & of the usefulness of the first & danger of the last')

<631r>

3Of Credit good & counterfeit\bad/, & of the usefulness of the first & danger of the last. former.

^[1]M^r P, \(sect 26)/ tells us that the allowing of paper to pass as money must have ({illeg}|&| we have found by experience it has had) y^e same effect as y^e permission of two sorts of coyn one false & little worth little & the other time & valuable. Here he calls\compares/ 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 {illeg}|pa|per credit, the one good upon the other counterfeit, the first upon good security, the other {illeg} upon more upo credit with it. \without it./\|one| good or\the others/ bad. The good is upon g{illeg}|o|od security & may be compared to good money/ The first \is good &/ may most\most/ properly be called {illeg}{illeg}^d circulatin|y|g security the other was {illeg} counterfeit \the {sic} bad is upon bad security or without any s{illeg}|ecuri|ty at all {take}\{illeg}|secur|ity/ & may be compared to counterfeit money. {sic}/. The first I defend, the other M^r P. opposes. For credit ing \{illeg} paper credit or to {speak} more {pap}/ \Tis opinion that/paper\/ security if it be god|o|d is \{not}/ of y^e 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 w^th his money upon such security. Good security is a phrase for w^ch signifies security of y^e same value with money. For otherwise men would not part with their mo So long as we beleive {sic} it good so long we are content with it in l{illeg}|ieu| of o^r mo{illeg}|ne|y & when we {illeg}|be|gin to suspect its goodness we call it o^r money & give\return it for/ {illeg}|take| in o^r money & return back y^e security. Tis mere opinion that sets a value upon money we value it because \with it/ we can have\purchase/ all sorts of commodities for it & the same opinion sets \a/ like intrinsic value upon circulating\paper/ security. \For/ We value it because with |it| we ca{illeg}|n| purchase all sorts of commodities & money too. All the difference is that the value of gold & silver is set upon their \internal/ substance or matter \& therefore called intrinsic/ & that \the value/ of circulating security\of paper credit security/ upon {illeg}|th|e \apparent/ form \of the writing & therefore called extrinsic/ & that y^e value of y^e former is more universal then that of y^e latter. But if Gold & Silver be preferable \to credit their\paper circulating paper/ security/ for their \more/ universal value \& circulation/ then {illeg}|fo|r y^e same reason \good/ circulating security is preferable to Bonds & Mortgages \w^ch have no circulation. For by circulating|ion| they are\it/ \paper security is/ rendred more usefull. {sic}/. One sort of {illeg} paper credit are Bills of exchange. These are so necessary to Trade {illeg}|th|at without them Trade could not {illeg}|be| carried on, & their use consists in paying of debts w^thout \the trouble hazzard & tediousness of/ sending of money from nation to nation {illeg} 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 plane {sic} by y^e great strop put to business & trade at p^rsent\which the/ by y^e sinking of paper credit {illeg} a month ago. last Ianuary\{illeg} this winter {illeg} put {illeg}|to| business & trade/. Nor {of} is this desired by M^r P. ^[2] But he \M^r 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 {illeg} 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 moderate degree.

But he adds thos|at|e the increasing of o^r trade by more paper will have a natural tendency to enlarge those trades that are carried on by the exportation of o^r coyn or Bullion, but how it can or will encourage <631v> any trade, that will bring in Bullion (w^ch are y^e trades that are gro{illeg}|u|nded upon y^e la{illeg}|b|our of o^r people) should be made out before we make any addition to y^e paper credit we have.

^[3] M^r P. allows that paper credit may be used sometimes as a cordial \in cases of necessity/ but not as constant food & instances reccons the {illeg} first Excheq^r Bills issued out in y^e late warr to be of this kind & y^t it may be convenient \upon pressing occasions/ to make us of y^e same method thereafter provided such Bills be issued out upon some {illeg}|f|und & not for more then y^e tax may yeild {sic} & be paid off when y^e money comes in. For, s{illeg}|ai|th |he,| the danger of using paper as money does not arise from y^e immediate use of the paper but from y^e misapplication of y^t 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 y^e nation for that pi{illeg}|u|r{illeg}|p|ose. He saith also that {illeg}|a|s 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 y^e City for y^e keeping of money & y^e ease of making payment by assignm^t, but in no case to allow of Notes & Bills to pass as money unless a p|d|eposit{um} be secured. And By all this he allows paper credit so far as\wherever/ y^e security is good, & so far thus f so far we are {illeg}|a|greed.\I agree with him./ But then he \seems to/ doubts w{illeg}|he|th{s}|e|r any {illeg}|pap|er credit \{illeg}/ be upon good {illeg} security except {illeg} where the|re| {depositum} is a book in y^e City {illeg}|o|r We are also agreed\I agree w^th him also that where {sic}/ that where there is no deposition or y^e deposition is in danger of being withdrawn the security is not go bad & the paper credit to be condemned\unsafe. {sic} \& such paper credit (not good circulating security) I would compare to counterfeit// < insertion from f 632r > money & say that it may be used sometimes used as a cordial ins cases of necessity (like the brass money of K. Iames in Ireland) &|b|ut is not to be used as constant good. And {of} such bad security \This sort of Credit Paper credit/ M^r P. seems to understand when he compares 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 w^ch rem{illeg}|a|ins is only about the goodness of the security of the safety of the Deposit on w^ch this or that sort of Paper credit is ground{illeg}ed.

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 Excheq^r bills, Bank of England Bills, Mault Tickets, Million Lottery Tickets, Annuity Tickets &c |{And}|But| this security is weakend|e|d by the stocks of Forreigners in those funds. Five millions \of money by circulating/ will pay a debt of 20 millions to o^r 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 m{illeg}|o|re apt to fail {illeg}|th||en| |y^t of parliam^t| /unless in {Barrs}\ \&/ yet must be tenderly dealt with because of the life of their trade

But M^r P represents &c < text from f 631v resumes >

And so the Question w^ch remains is only about y^t security \the goodness of {sic} paper {on} the several sorts of/ of paper credit on y^t several so{illeg}|r|ts 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 y^t Government lasts & there is but money enough to pay Taxes. |Of this kind are| /excheq^rBills, Bank \of England/ Bills, Mault Tickets, Million lottery Tickets, Annuity Tickets &c\ |†| < insertion from the left margin > ^† The credit of particular merchants is more apt to f{illeg}|ai|l & yet must be tenderly dealt with because the life of their trade.

But M^r P. represents &c

< text from f 631v resumes >

But M^r. P represents that Paper credit encourages only those trades w^ch export o^r money & when y^e money is gone w^ch should I credit, \& by doing {y^t} {illeg}\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 {illeg} paper credit by making great dispatch in business promotes all trades as well good as bad \as in manifest by {illeg}|t|h{illeg}|e|{illeg} stop put to trades this/ < insertion from f 632r > winter by y^e want of it, {sic} < text from f 631v resumes > ; that it promotes y^e {illeg} {illeg} bad trades \most/ (that is such as export o^r money) only by promoting luxury in forreign commodities & p{illeg} if that luxury be checkt (as it may be w^thout destroying trade\credit/) y^e Objection ceases, & its better to check luxury then trade\credit/) w^ch is the life of trade; {illeg}|&| that Cred Cred paper credit that\& y^e coynage Act/ in y^e two last reigns notwithstanding this luxury we got brought in much more gold & silver to y^e Mint \by trade/ then ever came in before, that by trade alone\was brought in by trade \alone/ before/ {illeg}|&| {illeg}|that| {if} {illeg} \as y^e strongest poisons rightly used b duly prepared & applied become the {illeg}|b|est medicines so/ {illeg}|tho|se trades w^ch \we/ no complain of for exporting o^r money, if we can but check our own {illeg}|l|uxury in forreign commodities, may \like the strongest poisons in {illeg}|m|edicine/ become the most beneficial to us of any o{illeg}|t|hers by furnishing o^r neighbours w^th those commodities to drain away their money; but if we {illeg}|p|art with paper credit to check those \hurtful/ trades, we check all forreign trade in general & leave the hurtfull trades to o^r neighbours who when ever we will make us pay dearer for those forreign commodities then o^r own merchants do, so that we <632r> shall never be able to grow rich hereafter.

I recommended credit for lowering Interest, \this {illeg}/because\ low interest is/ to y^e advantage of trade \& business/: M^r P. replies that y^e argum^t 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 husband\landed/ man will \soon/ be beggared. Care must be taken of |o^r| land & native product as well as of \o^r/ trade & paper credit is good for both. {illeg}|B|y lowering interest it raises the price of land & furnishes all the busy part of the nation \({illeg}|th|us ba{illeg}dmen Grasiers {illeg}|{Artificers}| Shopkeepers, Merchants)/ with money at easy rates to carry on their several imployments & is good for every body {illeg}|b|ut the{illeg} \idle/ {illeg}|V|surer & them that \cannot/ live \but/ upon \y^e/ interest of \their/ money. |It may prejudice Orphans who are to live upon| /the interest of their mone portions, but its good for y^e whole \nation in general/ & may enable father to provide better for their children & y^e 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 w^th y^e ar{illeg}|g|um^ts for it & judgm^t given on y^e weightier side.

<632v>

p. 10 {illeg} l. 20 —\to/ p. 12 l 23 against y^e 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 o {sic}

p 17 l 27      p 19 l 9 Care to taken against exporting o^r coyn.

part. There might be a third or 4^th part fit for culling but all Imported|r|s did not cull & th among y^e Guineas of K. Ch. & K. Ia. there are \still/ many weighty {illeg}\of/ full weight notwithstanding the wearing. If I should allow {illeg}|a| fift part to be culled out & recoyned there would remain 7121952^li|.|{illeg} 15^s. 06^d. To w^ch add the Guineas coyned from Decemb 31 1699 {illeg}|to|              amounting to \        / & the Lewid'ors & Spanish Pistoles w^ch are now recconed at a million & an half & the whole gold coyn will be above 8800000^li Of w^ch if we should suppose a|n| quarter of a million \hundred thousand pound/ to have been \exported &/ melted down \at home &/ abroad/abroad\ there would\will/ \in Holland & France there will/ remain above 8$\frac{3}{4}$ millions \in y^e nation/ besides broad gold. in the nation besides I broad gold & if we I say but 8$\frac{1}{2}$ millions \as we|I| did my former paper/ there will remain \a wast of above/ 300000^li to answer s{illeg}|m|all objections.

^[4]{illeg} If any gold hath been bought w^th \the/ clippings of silver \monies/ melted down into Ingotts & exported, that 'tis allowed for \in my former paper/ 5$\frac{1}{2}$ millions {illeg} wast of y^e silver monies

^[5]And if any gol the like is to be said of gold brought in by Forreiners {sic} to get by loans upon publick funds &c. For since y^e year 17|6|94 we have paid o^r debts {illeg} deb forreign debts in any thing but gold. And if any such\such/ debts \w^ch now/ remain unpaid, they are not to be received {illeg} in y^e b considered in recconing |y^e| what m quantity of monies now in y^e nation, but must be referred\allow/ to|\accounted for in/| y^e ballance of trade w^ch at p^rsent is on o^r side.

M^r P. affirms that

All w^ch being considered I do not see but that y^e recconings I set down in my former paper come neare y^e truth {illeg}|vi|z^t that o|i|n y^e year 1689 when we were richest we had o^r silver monies we had {ab}out 12$\frac{3}{4}$ millions of\in/ silver monies (not in tale but standard value) ,|&| about 5$\frac{1}{4}$ millions in Guineas \& Pistoles/, in all 18 millions besides b broad gold. And in Decem y^e year 1700 we had about 7$\frac{1}{4}$ millions of\in/ silver monies milled & hammered & about 8$\frac{1}{2}$ million of in Guineas & Pisto{illeg}|l|es besides broad Gold \& the Guineas coyned 1700, {sic}/, In {illeg}|a|ll |we had| about 15$\frac{3}{4}$ millions \which is about 2$\frac{1}{4}$ millions less then before. {sic}/. 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 foll{illeg}|un|d them & in y^e rest I used the best of my judgment. Where I have erred I desire to be convinced by stricter ways of recconing then those w^ch I have followed used. For the pro M^r 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 w^ch 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 w^{illeg}|ch| export o^r money & when y^{illeg}|e| money is gone the want of it will advance y^e rates of Interest.