1
results found in
658 ms
Page 1
of 1
30 Oct. 1800
Ordo & Brouillon
Paper Mischief
[Column 1]
Ordo
I. Introductory Matter+
II. Mischiefs of Paper Money Announced.
III. Advantages, real or supposed announced
IV. Mischiefs proved
V. Advantages disproved or admitted
VII. Case as between Bank and Banker’s paper.
VI. Adam Smith considered.
Conduct. Post-off the long[?] description to an Appendix?
Title
Thoughts on Paper Money. Shewing the mischiefs produced by/flowing from it—including its share in the present pressure[?]—together with an indication of the remedy.
[Column 2]
+Remedies that can not be [...?] at the [...?] draw attention[?] from the [...?].
Facts indisputable or acknowledged
1. That the prices of commodities must be regulated by the proportion between commodities and money.
2. That within these 50 years prices in general have undergone a great encrease.
3. That within do money has received a great encrease.
4. Deductions &c.
4. The rise of prices (taken all together) is an exact measure of the encrease of the quantity of money above that of vendible commodities.
5. Mischief of a rise of prices, the defalcation from the income of fixed-incomists.
6. This overlooked by A. Smith, who has attended more to wealth than feeling.
[Column 3]
Instead of Real Price—say Cost or Charge of production.
As the rise of prices equal to one third of the whole sum of prices gives one third part of the value false, This of itself serves as a proof that the addition to the quantity of money has been productive of no addition to the quantity of wealth.
When once an error has got into the universal[?] language, it is next to impossible to get it out again. Propositions and those false, are imperceptibly involved in terms[?]. The true opinion is dug out and brought to view, with great labour by a few thinking men: while the false opinion is declared every moment by all the world.
[Column 4]
7. Adam Smith specter[?] of the rise of prices not resulting purely from encrease of metal money.
8. Accordingly he considers any addition to money by paper money as impossible—as he considers the expulsion of an equal quantity of metal money as a necessary effect.
9. Were this the case paper money would not be chargeable with the mischief in question—but would be purely beneficial.
10. It appears not to have been productive of any such effect—[...?] by testimony of Mr Rose.
11. 2. by the testimony of the known matter of fact viz: the rise of prices.
There can be no rise but as the ratio of money to commodities encreases.
11. (1) Scarce any cash remained he says, along with the American currencies—True: because the demand for foreign commodities encreasing faster than the stock of their own commodities they had to give in exchange, the deficiency was necessarily filled up by cash—
Apply this to the expulsion of cash from the Country.
[Column 5]
12. This shews that money has no such tendency to drive out money as he supposes.
13. He sometimes seems to suppose the quantity of money to be limited by the quantity of commodities.
14. If it were—metallic money would drive out metallic money—which he does not seem to suppose—and which is disproved by the rise of prices.
15. Rise of prices ought naturally to affect all commodities alike, and would were it not for particular causes—viz:
1. Unequal rise or fall of real price.
2. Unequal rise or fall of demand.
3. Taxation.
4. In case of imported articles like causes acting in the producing country.
[Column 6]
16. Of Cloathing &c. the prices have risen less than provisions—because the real prices have been reduced by manufacturing improvements.
17. Of Corn the price has been kept down by the improvements in Husbandry.
18. Of {provisions}cattle the price has risen above corn by the encreased demand produced by Horses which are the effects as well as causes of wealth and the instruments of security as depending on national defence.
19. Of Mutton, A. Smith has shewn how the price has been kept up by the prohibition of the export of Wooll.
20. The keeping up the price of Mutton must have contributed to keep up the price of other Butcher’s meat?
[Column 7]
21. Besides cash Paper must not Bills of Exchange, as far as they go have contributed as well as the encreased fertility of the mines, and consequent encrease of metal money to the rise of prices?
22. They must have done so, as much as Cash paper of equal magnitude. Is it the money paid by Dealers or that by Consumers, that produces the rise?
23. As the number of hands through which a piece of money passes in a year is inversely as its magnitude does not small money contribute more than large to the rise of prices?
24. Unfortunately the reduction of real price has fallen more on luxuries than necessaries. Fine Cloathing Liquors &c.
[Column 8]
25. But in regard to Liquors has been very happily counteracted by Taxes.
25. In so far as Paper money has contributed to the encrease of vendible commodities
Sources of illusion
26. Neither encrease of paper nor of metal money has contributed any thing to the encrease of vendible commodities. But as both have encreased at the same time the encrease of money has been deemed the cause of the encrease of vendible commodities. Gradual encrease of money produces not rise of prices; sudden, does.—Why does gradual not?—not because the fresh money has time to produce the fresh stock of vendible commodities, but because the savings have time to produce the encrease./the addition to intrinsically productive capital with the existing stock of money have had time to produce this encrease
Had it not been for the encrease of money money prices would have grown lower and lower while wealth was encreasing.
[Column 9]
Mischiefs and Advantages of Banking.
I. Mischiefs
1. Rise of prices thence taxation of the distressed classes. A. Smith censured for his indifference.
2. Commercial insecurity by excess.
3. by occasional defects/
4. Support to monopoly by enabling Growers witholding from sale.
5. by enabling dealers to buy up.
6. By speculating themselves by engrossing articles of inferior importance and quantity.
* 7. Diminution quantity of exports and thence of profit by exports and imports. True the fact—But quære as to the evil? So much less capital employd in foreign trade—so much the more in home[?] production and improvement.
8. No good—no real addition to wealth.
*The whole community is thus taxed by the issuing of the paper for the purpose of taxing them another way by the application made of it.
[Column 10]
9. Stoppage would produce no evil as the fall of prices would be gradual—Picture &c.
10. Error Sources
11. Rise—amount of
12. Adam Smith.
II. Advantages
1. Encrease of the general mass of wealth—by the advantage attending to management on a large scale.
The advantage is real—but quere as to the share of Bankers in producing it—
Their trade is ill-suited to the slowness of production
Better suited to the quickness of exchange.
The additions made by paper money to real wealth are seen[?]
The defalcations (by defalcations from income & thence from savings) though not less real, are indiscernible.
Similar Items
-
Title: [4 Novr.1800 Brouillon Paper]Description: 4 Novr.1800 Brouillon Paper Mischief 1*/5 * [Column 1] Sinking Fund if a self-supporting Fund = Redemption of debt. Provision is made by Government for the removal of the load of debt at the end of a period of 40 or 50 years: Why not against[?] a cause of impoverishment of ([...?] partial as to classes affected) so much more powerful than national debt? Vendible 1. Individual 2. Aggregate Aggregate 1. Physical—Land & Building 2. Ideal. Annuities &c. Prefat. 1. Introd. Co-effects become[?] indexes— When political economy is thoroughly understood and the relations between the several phænomena/the matters of fact which constitute the subject matter of it is clearly made out, and effects branching out from one & the same cause, are traced to this their source each one of every such system of connectd effects, will serve as a diagnostic and index to the rest. By this means by means of a few [...?]/matters of fact [...?] public[?] in their nature to be concealed, the eye of the politician may be able to penetrate into the unknown[?] [...?] of affairs in a hostile state. [Column 2] Coining-Quasi It is time to reclaim this stray prerogative which has thus long and thus incautiously been suffered/to be [...?]/left in the hands of individuals. The robbery committed by Bankers is peculation pro ratâ A distinction that whether observed or no ought never to be unobserved by criminalists, is that between peculation in toto and peculation pro ratâ. The crime of Bankers, if it were one belongs to the latter head. Revolution A revolution in property—of the quiet kind—and yet setting aside the mischief of disturbance &c little less extensive than the most turbulent ones known. Fixed reduction of General rate of Interest. Produces the mischief of encrease of money without the benefit. [Column 3] Price—measure of The price of a particular article may rise to any degree without any addition to the quantity of money in the country: do of all articles, not: but only in proportion to the money. No addition to the quantity of money would raise prices, supposing the addition to wealth proportionable: therefore from the absolute addition to money must be deducted the quantity equivalent to wealth, in estimating the cause and measure of the rise. Money Increase Ê Interest Decrease An excess in the quantity of money serves to counter balance and check the mischief resulting from the reduction of the rate of interest, which arises out of the augmentation in the quantity of stock. French Assignats Produced the effect of money according to the price they were taken at [Column 4] Prices—how obtained The quantity of money in circulation i:e: actually employd in buying can never be worth more or less than quantity of commodities bought with/by it The price of any sort of goods in two different years is the same thing with the quantities of money given in the two respective years for the same quantity of goods. Therefore if in the second year the price of goods is double what it was in the first) it follows and shews that the same quantity of money was in the second year worth in goods but half of what it was in the first: if the whole of one[?] quantity of money was worth the whole quantity of goods, the half of the money is/was worth but the half of the goods of the same year and a given sum in the second year was worth but half what [Column 5] what the same sum was worth in the first year. A. Smith Admitted that paper may have a tendency in a certain degree to expell cash but not to its own amount: and so much as it fails of expelling to its own amount by so much it must rise prices It tends to expell cash—because as money grows cheap in the country and other vendible commodities grow dear in proportion to what they are in other countries, it becomes advantageous to send the money out to other countries in exchange for goods. This is particularly the case of provisions of which the real cost of production can not be so much diminished by machines as that of Cloaths and furniture. But in England this tendency is counteracted at both ends— 1. by the laws against exporting cash. 2. —against importing provisions. [Column 6] {A. Smith’s position is disproved to intuitive certainty by the simple fact of the rise of prices} What are the prices meant? The prices given by consumers, the ultimate prices—or those given by Dealers the intermediate or preliminary prices. or both together? Semble the ultimate: these are what bear ration to income—so that the sum of them is equal to the sum of income minus money saved and unemployd[?] These ultimate prices, are the only prices felt. The intermediate if they did not fall upon the ultimate would do no harm:—but that is impossible. No addition to wealth can be effected by any addition to money any otherwise than by encreasing the proportion of enriching to impoverishing expenditure. But in as much as fresh-inflowing paper money is added [Column 7] added in the first instance to capital i:e: employd in enriching expenditure, does it not appear from hence that paper money adds something to wealth upon the whole. Error Sources. {1. Case of individuals. 2. Sophistry of the language detracting from the value of paper money 3. —and of metallic money. 4. Accidental connection between encrease of money metal and paper and encrease of wealth.} 5. Money raisable by paper which could not have been raisable without. ex. gr. Bank of England. It is a mode of taxing without possibility of opposition to the tax. Coin Forbidding export or melting of coin was in fact an act of Bankruptcy—stripping the metal of its value—and reducing it to the condition of bad paper. [Column 8] A case might be put in which an addition to the quantity of money shall be not merely accompanied by, but productive of an addition to wealth: and this without any addition to prices or at least without a proportionable addition to prices. But the case thus put would not quadrate with the real state of things in England. Suppose money imported into the Scotch[?] Isles and employd[?] in fisheries. Cases as between money and wealth. 1. Wealth encreasing money encreasing in the same proportion—No rise. 2. Wealth encreasing money encreasing in greater proportion—Rise. 3. Wealth encreasing. money encreasing but in less proportion—No rise but fall. 4. Wealth encreasing—money decreasing—Greater fall. [Column 9] Cases continued 1. Wealth decreasing money decreasing in the same proportion—No fall 2. Wealth decreasing—Money decreasing in greater proportion—Rise. 3. Wealth decreasing—money decreasing but in a less proportion—No fall—but Rise. Return of a state of things in which money should be stationary or decreasing— If the decrease were gradual no inconvenience would ensue—The[?] Rents would be lowered—but prices of provisions would have been lowered first {Goods being sold} The money as well as real price of exportable goods being lowered goods would be exported to a larger amount or a revenue might be drawn from foreign nations by taxes on Exports [...?] bread basket stops. [Column 10] Data as between 2 points of Time 1750 & 1800 1. Quantity of wealth. 2. Quantity of money less—equal—or greater 3. Prices—higher—equal—or lower. Known antecedently 1. Wealth/Income of 1750 2. Wealth/Income of 1800 3. Prices of 1750 4. Prices of 1800 5. Money of 1750 Known by inference 6. Money of 1800 Cases continued 1. Wealth stationary money stationary. No rise nor fall. 2. Wealth stationary—money encreasing. Rise 3. Wealth stationary money decreasing—Fall.
-
Title: [4 Novr.1800 Brouillon Paper]Description: 4 Novr.1800 Brouillon Paper Mischief 1*/5 * Sinking Fund if a self-supporting Fund = Redemption of debt. Provision is made by Government for the removal of the load of debt at the end of a period of 40 or 50 years: Why not against[?] a cause of impoverishment of ([...?] partial as to classes affected) so much more powerful than national debt? Vendible 1. Individual 2. Aggregate Aggregate 1. Physical—Land & Building 2. Ideal. Annuities &c. Prefat. 1. Introd. Co-effects become[?] indexes— When political economy is thoroughly understood and the relations between the several phænomena/the matters of fact which constitute the subject matter of it is clearly made out, and effects branching out from one & the same cause, are traced to this their source each one of every such system of connectd effects, will serve as a diagnostic and index to the rest. By this means by means of a few [...?]/matters of fact [...?] public[?] in their nature to be concealed, the eye of the politician may be able to penetrate into the unknown[?] [...?] of affairs in a hostile state. Coining-Quasi It is time to reclaim this stray prerogative which has thus long and thus incautiously been suffered/to be [...?]/left in the hands of individuals. The robbery committed by Bankers is peculation pro ratâ A distinction that whether observed or no ought never to be unobserved by criminalists, is that between peculation in toto and peculation pro ratâ. The crime of Bankers, if it were one belongs to the latter head. Revolution A revolution in property—of the quiet kind—and yet setting aside the mischief of disturbance &c little less extensive than the most turbulent ones known. Fixed reduction of General rate of Interest. Produces the mischief of encrease of money without the benefit. Price—measure of The price of a particular article may rise to any degree without any addition to the quantity of money in the country: do of all articles, not: but only in proportion to the money. No addition to the quantity of money would raise prices, supposing the addition to wealth proportionable: therefore from the absolute addition to money must be deducted the quantity equivalent to wealth, in estimating the cause and measure of the rise. Money Increase Ê Interest Decrease An excess in the quantity of money serves to counter balance and check the mischief resulting from the reduction of the rate of interest, which arises out of the augmentation in the quantity of stock. French Assignats Produced the effect of money according to the price they were taken at Prices—how obtained The quantity of money in circulation i:e: actually employd in buying can never be worth more or less than quantity of commodities bought with/by it The price of any sort of goods in two different years is the same thing with the quantities of money given in the two respective years for the same quantity of goods. Therefore if in the second year the price of goods is double what it was in the first) it follows and shews that the same quantity of money was in the second year worth in goods but half of what it was in the first: if the whole of one[?] quantity of money was worth the whole quantity of goods, the half of the money is/was worth but the half of the goods of the same year and a given sum in the second year was worth but half what what the same sum was worth in the first year. A. Smith Admitted that paper may have a tendency in a certain degree to expell cash but not to its own amount: and so much as it fails of expelling to its own amount by so much it must rise prices It tends to expell cash—because as money grows cheap in the country and other vendible commodities grow dear in proportion to what they are in other countries, it becomes advantageous to send the money out to other countries in exchange for goods. This is particularly the case of provisions of which the real cost of production can not be so much diminished by machines as that of Cloaths and furniture. But in England this tendency is counteracted at both ends— 1. by the laws against exporting cash. 2. —against importing provisions. {A. Smith’s position is disproved to intuitive certainty by the simple fact of the rise of prices} What are the prices meant? The prices given by consumers, the ultimate prices—or those given by Dealers the intermediate or preliminary prices. or both together? Semble the ultimate: these are what bear ration to income—so that the sum of them is equal to the sum of income minus money saved and unemployd[?] These ultimate prices, are the only prices felt. The intermediate if they did not fall upon the ultimate would do no harm:—but that is impossible. No addition to wealth can be effected by any addition to money any otherwise than by encreasing the proportion of enriching to impoverishing expenditure. But in as much as fresh-inflowing paper money is added added in the first instance to capital i:e: employd in enriching expenditure, does it not appear from hence that paper money adds something to wealth upon the whole. Error Sources. {1. Case of individuals. 2. Sophistry of the language detracting from the value of paper money 3. —and of metallic money. 4. Accidental connection between encrease of money metal and paper and encrease of wealth.} 5. Money raisable by paper which could not have been raisable without. ex. gr. Bank of England. It is a mode of taxing without possibility of opposition to the tax. Coin Forbidding export or melting of coin was in fact an act of Bankruptcy—stripping the metal of its value—and reducing it to the condition of bad paper. A case might be put in which an addition to the quantity of money shall be not merely accompanied by, but productive of an addition to wealth: and this without any addition to prices or at least without a proportionable addition to prices. But the case thus put would not quadrate with the real state of things in England. Suppose money imported into the Scotch[?] Isles and employd[?] in fisheries. Cases as between money and wealth. 1. Wealth encreasing money encreasing in the same proportion—No rise. 2. Wealth encreasing money encreasing in greater proportion—Rise. 3. Wealth encreasing. money encreasing but in less proportion—No rise but fall. 4. Wealth encreasing—money decreasing—Greater fall. Cases continued 1. Wealth decreasing money decreasing in the same proportion—No fall 2. Wealth decreasing—Money decreasing in greater proportion—Rise. 3. Wealth decreasing—money decreasing but in a less proportion—No fall—but Rise. Return of a state of things in which money should be stationary or decreasing— If the decrease were gradual no inconvenience would ensue—The[?] Rents would be lowered—but prices of provisions would have been lowered first {Goods being sold} The money as well as real price of exportable goods being lowered goods would be exported to a larger amount or a revenue might be drawn from foreign nations by taxes on Exports [...?] bread basket stops. Data as between 2 points of Time 1750 & 1800 1. Quantity of wealth. 2. Quantity of money less—equal—or greater 3. Prices—higher—equal—or lower. Known antecedently 1. Wealth/Income of 1750 2. Wealth/Income of 1800 3. Prices of 1750 4. Prices of 1800 5. Money of 1750 Known by inference 6. Money of 1800 Cases continued 1. Wealth stationary money stationary. No rise nor fall. 2. Wealth stationary—money encreasing. Rise 3. Wealth stationary money decreasing—Fall.
-
Title: [Polit. Economy Paper Mischief]Description: Polit. Economy Paper Mischief Rise of Prices Column 2 Events which used to be regarded as disastrous, and which prove not to be so now—but rather the contrary. 1. Exportation of money (metallic) out of the country. 2. Emigration of labouring hands without capital. 3. Emigration of persons living on income and continuing after their emigration to draw income from the country. 4. Emigration of capitalists withy their capital Column 3 Effect of the hoarding plan pursued by Frederick the great—Hoarding cash? Which was the greatest? Loss by interest that might have been made of the money? or Saving by avoidance of the loss from degradation of money and rise of prices? Would the hoarded money, if introduced into the circulation, have made a clear and permanent addition pro tanto to the mass of money in circulation? Answer Being the produce of taxes—it was taken from consumption expenditure and added to capital Column 4 Items in the Account as between money and vendibles? Quere what are elements to be taken in the account as between money and wealth not pecuniary, in regard to the fixation of prices. 1. Land is not to this purpose to be ranked among vendible commodities—because its price being in No of years purchase will depend not upon the absolute quantum of money but upon the proportion between stock or capital and income. 2. So any other source of perennial income. as Annuities secured on Canal Navigation and Road[?] Undertakings &c. 3. Are Bills of Exchange to be considered as adding to the quantity of money, so far as they are employd in paying for wholesale purchases? Column 5 Why the encrease of productive capital outstrips the encrease of income—whence the fall in the profit of Stock and the rate of interest?— An addition to productive capital is an addition in the shape of principal. An addition to income comes in only in the shape and in the proportion of interest on that principal though at the high rate of interest in which profit on stock is included. {Encrease} Of all the fallacies that have or have not been brought under review by Aristotle, the fallacy a non causâ ut causâ is among those that have seen most service. In this field it is that the imagination seconded by the affections ranges[?] with peculiar/[...?] complacency and ease. Whatever prosperities[?] are remarked are fastened/[...?] as trophies without ceremony[?] as so many trophies on the favourite measures: Or[?] all [...?] are With as little ceremony are fastened on the obnoxious one No wonder that this should be the case in the present instance in which the deception is favourd by such multitude of appearances. Column 6 Dilemma Either the influx of paper money is evil, or not. If not no objection to Annuity Notes. If yes, a reason for extirpating other paper, and giving Annuity Notes as a substitute. __________________ difficulty of making an estimate of the permanent probable proportion of paper money to cash. There may be a maximum beyond which all the confidence in the world would not be able to carry it. But by any deficiency of confidence it might be reduced with that maximum down to 0. Column 7 Quere the effect of a tax upon the import of Bullion, if it could be enforced? It would keep down the rise of prices. Plate would be so much the dearer—and there would be so much the less of it in proportion to wealth in other shapes. But there would not be the less of wealth in other shapes—but so much the more: for the application of the existing stock of labour. The [...?] encouragement for coining[?], and the prohibition of export of Bullion from Coin[?] or English made Plate put together are a trap for and a prison for bullion in the shape of Coin: letting it in at all times, and letting it out at no time. It is only in the shape of Plate that Gold and Silver are of any actual use—that any encrease in the quantity is attended with any advantage. In the shape of Coin, they are no otherwise of use than in as far as they are capable of upon occasion, of being converted into Plate: and while they are in the shape of coin, every encrease in the quantity not attended with a correspondent encrease in the power of purchasing, is attended with disadvantage—viz: in respect of luggage[?]. Column 8 {Adam Smith with every body else exhibits the encrease in quantity of gold as the cause {result} of the rise of prices. But he mentions not that rise as an evil: only the acquisition of the plate as a matter of indifference. So the quantity of wealth in the country be the same, it never occurs to him to enquire into the state of feelings.} Quere both or if not which of the two masses of money produce the rise of prices? The Bills of Exchange &c. paid by Dealers?—or the small masses paid by consumers? __________ Adam Smith mentions Paper Money as driving out Cash: But the prohibition of melting Cash or Plate was intended to prevent this effect altogether, and it can not be supposed to be altogether ineffectual. See Col. X. [Column 9] Paper Mischief May not the Country Banks be mischievous in this way—Lending their Notes to Farmers and Dealers in Corn &c., whereby they are enabled to keep up the Corn &c. without selling it, does not this afford an encreased vent for their paper? especially as there is so much more money to pay for corn &c. in the year—How can the prices of all things rise on a sudden to all people for the whole year unless either quantities of things decrease in proportion, or quantity of money encreases? [Column 10] X. Times Oct. 30 1800 Bullion from Plate or Coin export prohibited. [Balance of para not JB hand] Several Merchants and Refiners, Proprietors of Foreign Gold Bars, weighing 2543 Ounces, attended the Court at Guildhall on Tuesday with their Witnesses, and made affidavits that no part of the above gold was the Coin of this Realm, or the clippings thereof or plate wrought within this Kingdom. The Court afterwards ordered them the usual Certificates for the exportation thereof. Times 30 Oct. 1800 The differences in the course of exchange at Hamburgh is upwards of 15 per Cent: and at home the price is encreased from £3. 17: 6 (the Standard price) to £4. 5s per ounce. This accounts for the large importations of bullion abroad.
1
results found.
Page 1
of 1