JB_003_004a.xml

Title: [[Rudiments sheet] 1799 Nov 25]

Description: [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

JB_003_006a.xml

Title: [[Rudiments sheet] 20 Decr 1799]

Description: [Rudiments sheet]

20 Decr 1799

Annuity Notes

X. Brouillon

[003-006b formerly attached here, covering blank column]

Effects Individuals Borrowing

Period 5

Money would then be more difficult to borrow than now, since a man would be able

to make but 2 per Cent and that precarious more than he would make to a

certainty without lending.

Effects upon mercantile dealings ready money or bill of Exchange By giving credit

a man would make only 2 per cent by his forbearance more than if he had sold for

ready money

As some will be accepted out of the funds by the rise of price, so others will

be deterred from buying in: These will be driven either to lend their money to

individuals (chiefly in trade) or to embark in trade themselves -

The latter effect will take place principally, the utmost interest being now but

2 per Cent

to lib IX +

Extent

Effects Period II

The payment of the interest[?] on the small fractional notes, if paid separately,

would be very troublesome, but before they are issued in such abundance, it will

be established by experience, that the interest will not in general be demanded.

In as far as people hoard at compound interest, such hoarding will contribute in

a great degree to render it scarcer and scarcer, as compound interest can not be

made otherwise.

When the demand of the small and temporary annuitants comes to have been

supplied, and the large and permanent Annuitants upon being paid off

involuntarily[?] buy Annuity Notes immediately upon the paying off of this

Stock, then the currency receive no more addition from the encrease of the

quantity of this paper.

Effects Period III

When the conversion has been compleated, as the paying off plan goes on, the

demand for Anny Note paper for permanent income will become greater and greater,

and as at so much as is so employd is taken out of the currency, the quantity in

currency will thus grow continually less and less.

Period I

+ As there will be less lending, there will be less loss. One reason perhaps why

Bankruptcies have not encreased by the War, the high price of Stocks having

diminished the lending to individuals.

War & Peace

The longer it is before the forced paying off plan takes place the longer it will

be before the augmentation given to the currency in circulation will cease.

But the longer the war continues and thence the practice of raising money, the

longer it will be before the fund[?] paying off plan

commences

Effects Period I

War &Peace

commences. Therefore the longer the war & continues the greater the

quantity of additional currency that will be poured in - which is just what is

desired. It will add /yield/ most money when money is scarcest - least, when

money is most plenty.

If the war should continue so long that the demand of the temporary and part[?]

annuitants is supplied before 3 per Cents have been raised to near par so as to

bring Annuity Note paper within the demand of the large and permanent

Annuitants, the issue will then slacken, and what there is of it going on in

each year will be no more than the produce of the small savings of the year.

If The quantity of currency thus added be equal to the quantity of capacity of

labour remaining unemployd, this is quite sufficient: all above[?] would do

rather harm than good, by sinking the value of money, that is raising the price

of goods.

[Next section formerly obscured by 003-006c]

{ As nobody would take out the Silver recte currency in single notes with a view

to the interest, encouragement to take it out might be necessary - viz:

1. Stoppage of larger Notes. or

2. Allowance for taking out small notes. or

3. Light silver taken for its denominative[?] value in exchange for Silver Notes.

The silver and small Gold Notes should not be issued singly, but only in

quantities amounting to the Standard Note?

So in regard to payment of interest.

Government might reserve to itself the option of composing the amount of each

such Standard Note issued as it thought fit. Power to the Bespeaker however to

make known his wishes in that respect. }

Effects Period II

When the whole of the Stock Annuities has been converted into Note Annuities When

Note Annuities have absorbed the whole of the Stock Annuities, so that there

remain no Annuities but the Note Annuities at Market, the steadiment will be

gone - they will of course be liable to Agio as stocks are at present.

In the ordinary state of things, as accumulation continues, and thence the demand

for these means of accumulation, they will experience a gradual rise. The paying

off plan will encrease that rise.

In case of a war or preparation for war (it being a time of peace) then of course

they will fall - in proportion to the quantity of Stock supposed to be about to

be created.

Effects. Period II

{ The Annuity Note paper could not fail of filling up the gap created by the

expulsion of Bank & Bankers paper since it is only in proportion to the

preference given to the Annuity Note paper that the expulsion will take place. }

But when the steadiment is gone, and they become susceptible of an Agio, that

Agio will be rise merely[?], exempt from all danger of a fall below the mark

from whence the rise set out: the only danger they will remain exposed to in the

nature of a fall, will be that of being made to undergo a forced reduction by

the threat of being paid off and this danger will not at the opening of the

market, nor for years afterwards be likely to appear a probable one, so as to

diminish the propensity of coming to the market.

Effects. Period I

War & Peace

It is the property of the paper to answer the purpose to perform the functions of

Stock and money both together and immediately. War time creates an encrease of

Stock that is /and thence/ of Stocks & money taken together. War time

will alike[?] by creating an encrease of Stock will create an encrease of this

paper in proportion as it goes for the buying in of Stock. Thus it is that War

time will create an encrease of this paper of Stock and money /currency/ taken

together - and as the demand for an abstention[?] to Stock will not encrease in

proportion, the encrease produced in war is left to take the shape of money

/currency/.

It thus produces /affords/ most money when money is most wanted - it affords

least money at a time when an influx of new money would be prejudicial by

depretiating the old, in other words by raising the prices of commodities.

Plenty can not depretiate it: be-

cause

Effects Period I

War & Peace

-cause in the nature of things it can not but be preferred to ready money: and

because it can not be brought into existence but in proportion as and so long as

it is actually preferred to ready money.

The difference is that this converts capital into means or encrease into capital

[…?], and without producing depretiation on either part. Whereas Stock Annuities

can not be sold out in large quantities at once without a proportionable

reduction in the price.

A Note-Annuity holder has at every moment at his[?] option, either to keep his

annuity, or to dispose of it without loss.

JB_003_002.xml

Title: [[Rudiments sheet] 12 Novr 1799]

Description: [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.