143
Note (b) to p. . 142
(b) The rate of accumulation, indicated by the
amount of the Exports from Great Britain, for
the 14 years ending in 1798, agrees, to a coincides wonderful
degree of exactness, with the assumed 5 per Cent. At that rate, in 14 years
£1,000,000 nearly doubles itself; it becomes £1,979,931. + Sinnot's Gulles p. 53
According to the Table of British Exports given by M r Secretary Rose, || || Bruss Examination Appendix N o 1.
(old valuation) Amount in 1785, £16,086,000: amount
in 1798, £33,800,000: — a little more than double.
The rate of accumulation or a breach of productive
industry, favoured as this may be supposed by
the war, may accordingly be supposed greater
than on other branches. This however seems open to
dispute: but what will namely be deemed open to
dispute is — that in time of peace, when an
annual defalcation by war - loans to the amount
of upwards of 22 millions, upon an average [+] [+] (over and above what has been restored to capital by the operation of the Sinking Funds), or
as at an end, the accumulation can not but go on
with much greater rapidity, than in period
of the year the same number of years devided
- in equal proportion between
war and peace.
+ Note to p. 155 157
Note p. ( ) to p. 155
Note to p. 6
3 o Note Abstract
Ch. XII
5 (a) Amount of national income money
compared with that of national money income
(a) Total of National income according to D r Becke_ _ _ _ (the official estimate not
including income from labour, and therefore not being
applicable to this purpose) _ _ _ }£217,000,000
Quantity of National metallic money —
, Gold Silver and Copper together (Gold
alone being according to M r Secretary
then near £44 millions) say
}45,000,000 Bank paper, before the
pressure of
1797, and the
consequent extension by £2 & £1 Notes as per
Accounts published on an average about _ _ _ _
}10,000,000 Country Bankers circulating
paper, by loose estimate (see below) _ _ _ _ _ }12,000,000
Common Bills of exchange by random conjecture
or for the purpose _ _ _ _ _ _ } 3,000,000 £70,000,000 Addition by £2 and £1 Notes- say
£3,000,000
the addition made
the late tax
Qusn as to the addition made to the amount
of Bank and Banker's paper by allowance of smaller notes,
considering the effect, if any of the late tax imposed on that
species of paper?
Are Exchequer Bills to be considered as entering into the composition of
the mass of paper money? They perform that function, at any rate, in
the neighbourhood of the Change, will
not
much more difficulty than Bank Notes of the same
. magnitude: the intervention of Broker's assistance,
and Broker's fee being though convenient in some instances, not
necessarily in all.—
In this point of view, the recent addition to the
quantity of this species of paper, in consequence of the additional sums
raised within the year, by the trebling of the assessed taxes
and since by the Income Tax, may
help to account for the great plenitude that has
so rapidly succeeded to the preceding scarcity.
purpose of money in proportion to the smallness of the sums it
[+] it seems the more difficult to
account for the recent prevalence in number of the £1000 and
£500 Bills over the £100 Bills, which are the smallest in
use.
Ch. XII
The want of a circulating medium
as such
that deficiency, of which so much was said in 1797, is not
felt no longer felt no longer,
now, but it may recurr at any time. From
my the concurrence united wisdom of all parties interested, it
received a cure at the time from a
to be at any time to become the
number of concurrent measures, all of them
perfectly well adapted to the production of the effect.
From true wisdom it received for the time a
perfect
( a)
(a) Note in the next page p. 161 cure:
but, by any other means than the sort of remedy here proposed, to prevent
the evil from recurring again and again
it is not in the power of the most perfect wisdom to prevent the
recurrence of the evil: at any time, is not within the reach of the
most perfect wisdom. and prevention is
still better than the most perfect cure.
(b) (b) note in p. 162 To be liable at any time to
become the instrument of mischief, and that in either of two opposite
ways, by being in too great quantity or in too little, is of the essence of
all such promissory paper: for it's not being in too small a quantity it depends upon the wisdom
and
benefit
humour
even humour
of a few individuals for its not being in too
great quantity it depends not only upon the wisdom and humour
of individuals, but upon contingencies [ ] of
the day, and the humours and prejudices of the
uninformed, and ill-informed, and hasty and impetuous
multitudes: +
+ upon the
former, as to
their not exceeding in their issues the amount warranted by the
rules of prudence: upon the latter, as to the
not frustrating and
setting
at default all the rules of prudence, by crowding in
withou
to demand for their paper without need, such a quantity of
cash as is not in existence.
The sort of promise given by Bank and Banker's paper, is that
sort of promise, the fulfillment of which, taken in the aggregate, is
physically and constantly impossible: — the promise, given by the
proposed Annuity Note paper, is that sort of promise the fulfillment
of which whether taken in the aggregate or in parcels, has never
: yet been found to fail:— which
possesses all the certainty that is to be found any where
unimpressed
in human affairs: — and which becomes
less and less liable to fail, the greater the quantity of money
thus promised of which it conveys the promise.
Were
Should it be the determination of government [to]
If the paper of the Bank of England should be accepted by
Government, or in payment for Annuity new paper issued,
the Lowest Annuity Note offers, in the footing of cash,
as it is at present at the existing other Government
offices, the circulation of Bank Notes would not (it would seem) experience
any diminution
from the proposed measure. It might even
receive assistance:
; in virtue of the source since
the same which regular
the properties by which Bank paper is rendered preferable to cash for all
other purposes, +
+ See Ch. IV.
it will be rend. no less so for this purpose.
no less in a word by circulation of Bank paper diminish'd
Should the public in general
testify for Annuity Note paper the expected preference, as
compared with cash, the Bank, by keeping that paper
as the stock
on reserve to
calls for change for their own
notes, might
keep so much the less cash and divide £2.1g interest
from a portion of their stock which at present yields them
more. But the profit from the present state of things is simple and
certain:
infusion
result of the proposed measure upon the affairs as touching
its effect of the
would appear wrapped in clouds
be both to serveuncertainty The Bank,
according to their intelligent censor M r
Allardyce, +
+ Address to the Proprietors of the Bank
1798. have not been forward to step out of the beaten
track, where the step has been ever so obvious, and increased
emolument ever so certain a fruit.
The occasions on which a person would naturally be led to send
his Cash to the next Local Ofiice to change it into Annuity Notes
are the several sorts of occasions by which currency is in use to find
its way into a mans pocket in the Lump: viz: in masses beyond
what are requisite for the expenditure of the day. - A sketch of these occasions
as they respect the several classes of persons concerned together with the
aggregate amount of the Sums received on these several occasions within the
compass of a year (the amounts taken from M r Pitts computation of the
Income of Great Britain as printed in M r Secretary Rose's pamphlet of
1799) may be exhibited as follows.--
I Money received in the shape of fixed income - coming in in masses generally
periodical as yearly half yearly or quarterly. -
1. Landlords Rents for Land on the days on which such rents come}
respectively to be paid — } 25,000,000
2 - D o for Horses on d o days — 6,000,000
3 - Tithes on D o days — 5,000,000
4 - Minis Navigation and Timber . — 3,000,000
5 - Proportion for Scotland, say — 1,000,000
6 - Income from professions beyond Sea — 5,000,000
7 - Interest on Funds — 15,000,000
£60,000,000
[Rudiments sheet]
1799
Annuity Notes
{ 1
For instantaneous distinction take the paper to be coloured in the new mode
Green, Yellow, Red - These colours might serve to distinguish the emissions of
different Years}
2
On presentation for payment of the Interest the note might be changed viz. a note
that had but four years to run instead of the Note that had the whole five years
to run - and a deduction might be made sufficient to pay for the new note and
for the Clerk’s time &c.
3
The sum of the fractional part of the interest might be added in the first
instance to the value of the note, on the very day of issuing, and by that means
the real rate of interest would be exactly equal to the nominal.
4
Distinction for emissions of different Years Title in large Letters
1 Annuity Note at 4 per Cent issued for 8 years Ao 1801
2. Annuity Note at 3 per Cent irredeemable issued for 5 Years Ao 1802
{ 5
By arrangement with the Post each Note might be remitted from the Country to the
Exchequer and the dividend with the fresh Note returned. }
{ 6
Issue a portion of those 5 Years Annuity Notes as you would Exchequer Bills. If
any remain in the Country unpresented at the time of payment, it will so much
borrowed at 4 per Cent all the right[?] time. }
{ 7
There is a particular time in the Year when money is more[?] plenty[?] in the
Exchequer than that another time. This time say a Month should be the time for
paying off the principal if demanded Should the sum be greater than expected
then would be the time for Parliam to make provision accordingly. }
8
Penal to engrave or draw such a view of the Auditor as is given on the Notes -
viz. Front view - or Left Profile - or Right Profile &c
9
Dutch Obligations of 100 florins P. Carus[?]. Therefore this not a new experiment
- pregnant with unforeseeable consequences.
10
{ The embarrassment attending the multitude of small Annuity Notes would
naturally tend to confine the large transactions to Stock, leaving small ones to
Annuity Notes.
The Annuity Note plan would be a plan for enabling persons in middling
circumstances to lay out their money on Government Annuities to advantage. }
11
{ If the Annuity Notes do not In as far as the Annuity Notes take place of
Bankers promissory notes they will add to the security of the nation in regard
to its property - In as far as the former operate in {addition} without
diminishing the quantity of the latter, they will add to the national wealth. }
12
Paper promising money, multiplies the money in the same way as a multiplying
glass multiplies it to the eye of the imagination though not to the senses.
13
Exchequer Bills though promises not of money in a series of payments like
Government Annuities - but of money in a mass sum[?]
Bank Notes are exempted from the causes of failure that prevail in the case of
Bank Notes, by the remoteness and fixity of the term, and by the certainty which
the Government has always experienced of making provision for the payment at the
time.
14
In this respect the proposed Annuities cannot possess /be made[?]/ any advantage
over the existing Exchequer Bills.
Persons, who wish for permanent income to a large amount, will not buy Annuity
Notes upon terms affording much profit to Government - not if they yield much
less interest than Stock does.
15
{ Payment in the Country, through the Postmasters.
A Months Notice to be given by the Bill Holder - at what Post Office he will
receive it. Se.[?] Col. 9. }
16
Rejected
{ The Annuity Notes might be received at the Government Offices at any time (on
forfeiture of the Interest) if promises were made authorizing the Exchequer to
reissue any that were received Col. 9.
17
Security
Expedients against a Run.
1 Time of payment Wanted - say to a month each half year
(But does this apply to principal or[?] Interest , or both?
2. Time of the Year the most convenient - i:e: when money is most plenty
3. The quantum of possible demand not to exceed the quantum of possible
postponement without prejudice to credit: i:e: without breach of fixed &
positive engagement
{ With regard to the influence of the plan upon Banker’s Notes it will a great
difference probably, whether the principal be demandable upon any terms or not
If not demandable it[?] without interference so much - at least will not be
exposed to the complaint of its interference.
In this case too, all anxiety about Runs is at an end - and all the complication
that might be necessitated by such anxiety avoided.
They must be perpetual unless redeemable /redeemed/ - not limited to 5 years as
at first proposed - For this would afford no provision for a family - nor for
old Age. }
[…?] only to call in the old Notes, on offering new notes on the same terms.
Collateral Topics
Best proportion between the quantity of coined money and the general mass of
property in the country - moveable and immoveable and endmoveable[?] consumable
and unconsumable?
Effect of an addition to the coinage?
Does it afford a permanent addition to the stock of present money as contrasted
with future. Or (the state of paper tender[?] remaining the same) does it cause
exportation of the encrease?
Annuity Notes will not encrease the possible quantity of future money - since
they will add nothing to the facility of raising that money as the periods of
payment arrive.
{ […?] also to the […?] to buy them up: since this would prejudice but […?]
Holders }
Advantages.
{ They would add to the security of national property - as against Insolvency.
They would contribute to correct the depretiation of money in the shape of
interest as compared with money in the shape of principal: i:e. the scarcity of
ready money to Government.
They would not add to the quantity of wealth of the country as (at the expence of
its security) Bankers Notes do - Because the quantity of them will always be
limited - and will come on time[?] of an equal quantity of Stock: i:e:
Government Annuities on the common terms.
Therefore, they would not interfere with the Bank nor other Bankers Notes.
Such only would come to market (and interfere with Bankers Notes) as were over
and above what were retained as a proportion for futurity like other Stock. }
[Rudiments sheet]
12 Novr 1799
Annuity Notes
Brouillon I
* { 1* To the actually existing Petty Hoarders may be added those who would be
Petty Hoarders, had they the means and […?] in question. See the Author’s
Public[?] of a plan relative to the Poor as printed
Nomenclature in Young’s Annal.
Holders of small sums hoarded - not large enough to buy Stock with.
Holders of temporary sums seeking employment not permanent enough to buy stock
with
Holders of temporary sums not seeking employment - or running cash.
1. Petty Hoarders - or on a small scale
2. Temporary Sum-Holders not under engagement
3. Temporary Sum Holders under engagement.
2*. Hoarders in attendant on a small to a large scale.
4. Mean expenders without hoarding.
1 Possessors of Petty Hoards - Permanent Hoards Permanent sums on a small scale
seeking employment
2. Possessors of Temporary Sums on a large scale not under engagement but seeking
employment
3. Possessors of do on do under engagement.
4. Possessors of Income or Sums for current expences. }
Extent
{ 1 2
The amount of Debt bought in will be equal to the amount of Annuity Notes sold
plus the profit of the quantum: i:e: the discount upon Stock at the different
periods
2 3
The addition made to the currency will be the amount of Annuity Notes sold minus
the amount of Annuity Notes hoarded - minus the amount of Bank and Bankers’
paper expelled.
3 1
The amount of Annuity Notes issued will be
1. The amount of Bank & Bankers’ paper existing - plus
2. The amount of Gold coin now existing
3. Minus the quantity necessary for circulation - which will be equal to the
quantity requisite for paying dividends viz. £9,000,000: - plus the claimed
dividends on Note Annuities.}
Extent
3 1
{ 4. plus - the difference between the amount of Annuity Notes that will be
hoarded, and that of cash that now is hoarded. }
Gold coin existing - £44,000,000
Deduct Half Years Dividend on Stock} 9,000,000
Remains addition to the currency and to the National Wealth £35,000,000
From which is only to be subtracted the claimed interest upon the amount of
Annuity-Note Paper issued.
Advantages
Security.
The danger of failure is continually encreasing by the encreasing extent of the
connection of the Country Bankers with one another, and with the London Bankers.
{Bankers debarred
Extent.
The expulsion of Bank and Bankers’ paper would effected without producing
failure, inasmuch as before the establishment of the {new} paper they would have
ample warning to withdraw. }
Say
Addition to the currency £35,000,000
Bank Paper large 10,000,000
Do Small 3,000,000
Banker’s Paper 7,000,000
55,000,000
Profit on the above at 33.6.8 per Cent }
Total Debt paid off being = } 2
66.13:4
which is to 100::40
40 to 60
Effects
{ The effect of the influx of this wealth will be just the same as if so much
specie were imported from abroad and paid to government by some foreign power on
account of tribute, subsidy, marriage portion &c. }
Government making the […?] applicable of it.
It would no more drive out specie than Bank & Bankers’ notes have driven
out specie(a)+
- But if it did? - where would be the harm? &c
What a rejoicing upon the capture of a few hundred thousand pounds in specie!
which because the property not of Government, but of the individual captors -
+(a) Smith speaks of Bankers paper driving out specie - but this is only in a
particular part of the Country That the whole quantity of specie has not been
lessened appears from those.
Extent Effects
So long as any gold exists, it can not be scarce - bear a premium as exchange
against Annuity Notes, because Annuity Notes being by the supposition preferred
to it, every body will rather part with gold than with an Annuity Note.
Neither can it lose its value since every body is compelled to take gold for a
debt, and can not be compelled to take Annuity Notes.
Gold can not be inconveniently scarce without bearing a premium: nor can a
premium be given for it for the purpose of purchasing Annuity Notes with it:
since there is nothing on which the purchase of it could be made but Annuity
Notes.
Therefore the proportion as between Cash & Paper would adjust itself to
general convenience without any scarcity on either side. As neither could be
driven out (by the other) both would stay.
1 Assurance
1
{ The first {to} take it will be the Petty Hoarders who take it with a aim[?] of
keeping it. To answer their purpose it is not necessary /induce them to take it
no persuasion is necessary on their part/ that any body should /will/ be in
readiness to take it off their hands unless it be with a view of holding[?] it
as they do, as in case of sink[?]
2
In the first instance a man who can keep his money by him but a limited time, and
must then buy it will not be disposed to take it, for fear of his not being able
to get it off his hands in that time. }
3
But a man who has the money for his own - can keep it thus invested as long as he
pleases, {and who is prevented from investing it in a private loan for want of
knowing where that premium can be placed out with perfect certainty of its being
repaid to a day and}
1 Assurance
{ and also fears buying into the funds for fear of a fall to a greater amount
than the interest, will be disposed to venture on the purchase of a few Annuity
Notes - on confident of being able to pass them off at par on the following
considerations.
1. That there is a class of people that will be always wanting these Notes that
they were afraid[?] of not being able to circulate them.
2. That these Petty Hoarders can never get an Annuity Note in the way of issue
without paying par price, with the fuss and trouble to boot
3. That this expence and trouble will be saved by taking them in the way of
circulation - taking them of him[?] }
4. That it is impossible that even in the way of office before many months
weeks[?] or even days are elapsed there must be a demand for such a mass of
Annuity Notes as he meant to take out
- A fortune that there must be in
1. Assurance
{ in the way of circulation
5. That the market for this paper will not; can not however be confined to the
Petty Hoarders, because those being […?] in the same situation with himself the
inducement that operates on him to take out his paper in the way of issue will
operate in the encreased force upon others so as to engage them to take it in
the way of circulation.
When once it becomes a fact a well known matter of fact, that this paper is
received in circulation and received at par the bulk of men will not be
scrutinizing out the reason. }
Ex. gr. the South Sea Scheme) They will acquire and presume the presumption that
it will continue to be so received.
For a short time this paper will not be taken out by any but those who can afford
to keep it.
{ But while by experience it is forced to be as current[?] as cash, it will not
enter into a man’s head to consider whether or no he can afford to keep it. }
{ The demand for it in the case of Petty Hoarders will be the basis of the demand
on the part of the other classes. }
{ 1. Assurance
The demand in the way of issue & in the way of circulation would regulate
each other - A man could not be deterred from taking it in the way of
circulation by a dread of a glut in the way of issue - since iss[?] circulation
will always be preferable to issue.
Fees highest at first
The fees on issue might be higher at first than afterward
1. To favour the circulation in its infancy.
2. That the rate of payment may be higher when the dealing is less extensive. }
{ Progress of Issue
It can not be that Notes should continue to be refused in circulation, when it is
known that they are taken out in the way of issue. Therefore the progress of the
issue should be regularly published. }
Unless (what is not improbable) the currency of it should be preconfided[?] in by
moneyd men to such a degree as to induce them to take it out in the first
instance.
[Rudiments sheet]
22 Novr 1799
Annuity Notes
Brouillon III
Extent
1
What will be the case where 3 per Cent Stock is raised at par? People will not
then take Note Annuities at 2 per Cent although the issue of the 3 per Cent Note
Annuities should be stopped. The 2 per Cents will if taken out at par would be
at a proportionable discount. Therefore they would not be taken out. But the 3
per Cent Note Annuities if the issue were stopped would bear a premium
continually rising. At such a time government would be able to pay off these 3
per Cent Note Annuities: and by threatening so to do might force them to yield
them up and accept of a lower rate of interest -
Ought it so to do? }
Extent
War & Peace
2
Better to be adopted now in War, than in Peace because in Peace it will
exaggerate the inconvenience to certain classes in War it will alleviate the
inconveniences of War
Extent 3
There is a point beyond which any addition to the circulating cash or to bullion
the material of circulating cash would cease to be an addition to the mass of
national wealth; because it would take away from other commodities as much value
as it added in the shape of plate Plate would be cheaper, but all other
commodities would be as much dearer as Plate was cheaper.
{ The influx of money produced by the Annuity Note paper will have the same
effect, as if it were in as much cash. } +
Objections
Extent[?] Cash
Borrowing Fund
Succedaneum to the Bank.
It is only in War time that any such need for sudden borrowing can exist.
In addition to the Treasure, power to stop /take out/ the Sinking Fund: i: - to
apply to this purpose the produce of […?] that Sale.
But, for home payments Annuity Note paper will serve - and for foreign payments
there can be no sudden demand to such an amount above the Treasure without
consent of Parliament.
{ Extent
5
It would bring up 3 per Cent to par sooner than would be supposed - and by that
means not only retard the operation of the Buying up plan but change it into a
Paying-off plan - and so reduce the rate of interest. }
3 continued
+ At that point staking[?] a Treasure would be no national loss since the money
if circulated would only raise the price of butter[?] &c without adding
to national wealth. Yes it would - it would augment the mass of national wealth
by the amount of the bullion introduced - there would be so much more bullion -
and though not so much the more of other commodities, yet not so much the less.
Extent - Effects -
6
In 9 Years time Peace alone almost doubled the price of Stocks: in 1783 they were
at 53; in 1792, at 96. As they have been recently up so high as 68, with Peace
alone, were Peace to be made soon, they would presently be up at par: much more
with the help of the proposed plan.
{ Plan Addend.
1
That out of the Stock bought up with the produce of the money received for
Annuity Notes, so much as is equal to the mass of Annuities granted /created/ by
the Annuity Notes be extinguished: and the remainder kept on foot for the
purpose of buying up fresh Annuities according to the Plan at present pursued by
the Commissioners. }
{ Plan Addend.
1
That when the division of Notes have been carried as far as it is thought capable
of being carried without a preponderating inconvenience, Notes be received in
lieu of Taxes, and reissued from the Exchequer in the way of circulation.
2
That then, for the raising of the trouble of working on large payments, multiples
of the original Annuity Note be issued to those who choose to purchase them
either with cash or with smaller Annuity Notes.
3 2 7
That when 3 per Cent Stock Annuities are by this means raised to par or above
par, upon which the buying in plan will cease of course, and the paying off plan
take its place, Stock Annuities be paid off in preference to Note Annuities.
4
That when, by the threat of being paid off the faculty of compelling the
acceptance of a lower rate of interest is acquired by Government, it be exerted
upon the Stock Annuities in preference to the Note Annuities. }
Effects. No Paradox
1
Gain to the Holder of each Annuity
- 3 per Cent during the time of his holding it.
2
Gain to all Holders collectively
3 per Cent per annum on the total amount of Anny. Notes in circulation
3
Gain to the Stockholder on selling out - the amount of the rise of price thus
produced.
4
Gain to government
5
Gain to labourers at present out of employ - Employ
6
Gain to Labourers at present not in full employ
Full employ
Effects. No Paradox
Loss
{ Plan Addend
5
That the progress of the issue be published periodically quarterly, monthly or
weekly Gazette, with permission to publish it in the other papers, as is done in
regard to Bankruptcies.
5(a)
Reason. They can never be refused in the way of circulation when they are known
to be taken out in the way of issue.
6
To what degree of detail should the designation of the respective place in which
the respective amounts have been issued, be carried?
7 […?] D[?]
That it may be made known ab initio, that Note Annuities will not be paid off
till after the Stock Annuities.
8
That it be a fundamental regulation and condition, that Loans shall never be made
in these Note Annuities, but only in Stock Annuities as at present.
9
Fees on issue higher at first than afterwards.
9(a) Reasons. 1. To favour circulation.
2. To afford the better recompence[?] when there is least custom. }
{ Plan continued
9
All above £1 to be on yellow paper, to denote Gold: all below, on white paper.
10
Price of Annuity Notes of the different amounts for each day (by encrease of
interest) to be announced in the Newspapers of the day - and in Almanacs. }
[Rudiments sheet]
1799 Nov 25
Annuity Notes
Brouillon V
Extent - Effects.
1
The existing prices of things vendible at each period are the result of the
existing proportion between things vendible of all kinds and on the one hand and
(ready?) money of all kinds on the other. Add to the quantity of things vendible
without adding to the quantity of money, you make things cheaper: take from this
quantity of things vendible without taking from the quantity of money, you make
things dearer.
2
Add to the quantity of money, without adding to the quantity of things vendible,
you make things clearer: take from the quantity of money, without taking from
the quantity of things vendible, you make things cheaper - There being less
money to be had, a greater quantity of things vendible will be given to get such
share of it as a man wants.
Disadvantages
3
The disadvantages resulting from the encrease /state of progression/ of wealth in
the shape of capital, are inseparable from the advantages: a choice must be
made: and a choice is made Notwithstanding the disadvantages, it is better the
rates of capital to means should be on the encrease than on the decline, and
such accordingly is the universal wish taking the matters in the lump: though
many speculatists observing the disadvantages without observing their necessary
[…?] with the advantages may raise arguments for being dissatisfied with the
general result. Witness the […?] against inclosures, i:e: against the
improvement of land.
Disdavantages
4
The state next to be desired, if it were capable of being brought to pass is a
state exactly stationary: but this is altogether impossible.
5
A state of advance is the effect and cause and inseparable accompaniment of
general prosperity. Nothing but adversity and calamity can reverse it: nothing
but adversity and calamity can so much as stop it, and substitute a stationary
state to a progressive one.
6
So long as men have their means men /individuals/ will be laying up money for
themselves and their families /children/: thus it is that the quantity of
capital in a country is continually on the encrease. Two things and two things
only, prodigality and distress can either turn the encrease into decrease - stop
the encrease, or so much as diminish it - Is either of them a
thing
Disadvantages
thing to be desired? If it were, no measures need be taken to bring it about:
since at any rate it is the worst result that can take place.
7
The disadvantages attendant on the encrease of wealth are continually productive
of their own alleviations. Marriage and the prospect of it makes men lay up
money /wealth/ for their children, children, as they come into life cause a part
of that money to be spent, cause a part of the heap of money to be taken away -
and as they come to the labouring age, keep adding by their labour to the heap
of vendible things.
8
The disadvantages attendant on a state of decline are productive of no
alleviation. Destruction of money, destruction of any other species of wealth,
produces nothing but distress.
Dividend Forbearance
9
The maxim trade[?] quod habes & habis is the principle of all paper
circulation. Paper will not serve instead of Bullion, because paper will not
serve instead of plate . But paper will serve instead of coin, because coin, so
long as it is in the state of coin is as unfit for use as the paper in which
contain[?] /convey[?]/ a promise of it.
10
A striking proof of the inutility of coin i:e: of the actual possession in
contradistinction to the faculty of possession is that in the case of a Bank of
deposit such as was at least that of Amsterdam a man paid a man in general more
willingly to pay and did pay - a man paid money for the not having his money in
his possession: paid the Bank of Amsterdam for keeping it. In Great Britain a
man does not pay any body in actual money for keeping his money for him since
there are enough (Bankers enough) who are ready to keep it from him for nothing.
But for a service of such much[?] trouble and […?] on one
hand
Divid. Forbearance
10
hand - of such utility on the other, a man must in some shape or other be content
to pay: accordingly what a man does pay in this case /way/ for the keeping of
his money is the risk of losing it. The disadvantage the owner submitts to is
the risk of losing it: the advantage the keeper receives for the trouble and
risk of keeping it is the faculty of lending it - of lending it out for one
interest, and putting that interest into his own pocket.
11
The expectation of possession - the persuasion of having actual possession at
command being what a man prefers in this case to actual physical possession, so
far as this expectation can be produced and kept up without disturbance, so far
may the substitution of paper to cash be carried, and carried without
inconvenience.
[Next section formerly obscured by 003-004b]
{Divid. Forbearance
12
By the proposed plan Government will be a man’s Banker in respect of such Annuity
Notes of which the dividends remain unclaimed. }
{ Extent
13
So much hard cash as Government thought fit to lay up in store instead of going
on to buy up Stock for, to so much it woud[?] stop the encreasing issue of Anny
Notes: since it is only in exchange for cash that Annuity Notes can be issued.
14
There is no incongruity in the Holders of Annuity Notes taking receiving Annuity
Notes (of a proportionable magnitude) in payment of their dividends: only they
must receive it in the regular way at the Sub-Offices, receiving Cash in the
first instance, and receiving Anny Notes in exchange for their cash. }
[Next section formerly obscured by 003-004c]
{ Extent
13
So much of the Annuity Note paper as a man chose rather to take the interest of
from the next person to whom he had to make a payment - that is in time the
whole of the paper in circulation (bating accidents) so much will be to be
deducted from the sum which it will be necessary for Government to keep
receiving.
On this footing the more paper is out in issue, the more may continue to be
issued, but this state of things will not take place for some time.
14
When 3 per Cent Stock has been raised to par, there will be a time when
Government would have it in its power if it chose to issue Anny Note paper at 2½
per Cent or 2 per Cent: and by the produce of it to pay off a part of the 3 per
Cent Note Annuities, and by threat of paying off reduce the remainder to 2½ to
2. }
[Next section formerly obscured by 003-004d]
{ Extent. Divid. Forbearance.
15
Government therefore will not pay Anny Note Dividends with Anny paper - but it
will pay them with nothing at all: i:e: it will not be called upon to pay them:
every Annuity Note Holder will take Government for its Banker: and the Annuity
Notes passing from hand to hand with the interest running on will perform the
function that is at present performed by Bank Notes.
16
Guineas will not go in exchange for Notes but in proportion as they get into
hands who can keep the Notes long enough to make it worth their while to be at
the trouble of the exchange.
See IV.6 in regard
17
This (15) will go to the formation of the Government Treasure Fund.
18
But this applies only
[Rudiments sheet]
28 Novr 1799
Annuity Note
Brouillon VIII
1. Small Notes
2 Official Currency[?]
3. Cash Fund
4
5. Government to […?] of the Cash[?] […?] to the Bank[?] for in the […?] to make
discount with.
[Next section formerly obscured by 003-005b]
{ Extent - after Par.
Might not Government out of its Cash Fund take in Annuity Notes on certain terms
over and above such as are brought in in payment of Taxes?
This might be done either by lending the cash in the Notes /in each[?] Annuity
Note/ as a security (lending suppose ¾ of their /its/ value) or by purchasing
them outright for /at/ a small premium /profit/ and then not counting[?] them
but re-issuing them
As Annuity Note Paper wants[?] be more eligible than cash to the individual, so
would it to Government: Government so long as it kept each note in the Exchequer
without re-issuing it, would be making interest on it: i:e: saving the interest.
In this way, it would be for the advantage of Government to take in whatever
Notes were brought to it, giving Cash for them: so long as it had the sure means
of recovering the cash when wanted: which it woud[?] have so long as the issue
in the Country at large continued. }
Extent after Par
If Government thus bought in the Notes, instead of lending upon them, instead of
taking the money under the name of a premium (which would make a discount in the
Notes) it might take it in the name of a fee for each Note: and if this fee was
the same for notes of all dimensions (say ½ or 1d) it would operate as an
exclusion of the very small notes in which the trouble of counting would be an
object
Analogous practices.
Pawnbroking
Warehouse-room in addition to interest. Commission (mercantile) in addition to
interest.
[Next section formerly obscured by 003-005c]
{ Extent after Par
The terms might be such as would render the transaction advantageous upon the
whole to Government, lender paying for Clerk’s time.
Or an accredited body such as the Bank, or E. India Company might do the
business, Government furnishing them with the cash on certain terms. }
Government might re-issue them though not open any but through the Post Offices.
[Next section formerly obscured by 003-005d]
{ Currency Steadiness
The condition requiring cash to be paid on taking out an Annuity Note, and do
coupld with the appropriation of that cash effectively protects the Holders of
Annuity Notes from seeing them depretiated by an excessive and unlimited issue
of this kind of paym.[?] as has so often taken place in the case of the American
and French paper monies. Without the payement of cash, the necessity of the
consent on the part of the taker-out of this paper would not be sufficient to
afford the security in question: since the amount of any apprehended
depretiation might be made up to each individual taker-out (as is the practice
in the case of Navy Bills and Treasury Warrants) and thus the market might be
mandated[?] to any pitch.
They can not be issuers but in so far as they are preferred to cash. }
Extent. Effects
The quantity of unemployd capacity of labour combined with the quantity of hard
cash exportable with profit /advantage/ will give /limit/ the quantum of
additional wealth which the country can be made to receive in the course of a
year from this source, but it will not limit the number of returns which the
quantity of hard cash left in the circulation is capable of making to the
Exchequer for Annuity Notes nor consequently the quantity of nominal value which
government will have it in its power, (and indeed lie under the obligation) of
introducing within the year (and so from year to year) supposing stock not to
have been yet raised to par.
As far as the guineas are furnished by income, this reciprocation can not extend
beyond the sum of the income of individuals: but as far as they are furnished by
masses of capital, there seem to be no limits to the rapidity with which the
exchange may be
repeated.
Extent. Effects
repeated
The only limit opposed to the rapidity seems therefore to be that which is set by
the uncertainty whether the individual who has the money to receive in each
instance has the prospect of being able to keep it by him long enough to pay him
for the trouble of sending to the next Post House to exchange for Annuity Notes.
War & Peace
Difference between the advantage in time of War, and in time of Peace.
In time of war, it helps raising the Funds, which then, taken by itself is a
result not desirable: since the lower the funds are when the buying-in phase
sets out after the conclusion of the War, the more advantageous the terms on
which it buys in.
But the advantage by forbearance of Dividends is a very substantial one, and
applies equally to War & Peace.
On this account the greater quantity of the Mass of Annuities can be exchanged
from Stock into Notes, the better.
[Next section formerly obscured by 003-005e]
{ Effects Bankers
Compensation
Bankers would get the cash that now goes to the composition of Petty Hoards. The
business of the country Bankers would assume the form now assumed by the London
Bankers. They would issue less paper or notes[?], but they would {have}
/receive/ more cash. }