JB_003_003.xml

Title: [[Rudiments sheet] 22 Novr 1799]

Description: [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. }

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.

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