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[Recapitulation]
11 Oct 1801
Alarm
Ballance Recapitulation
Upon the whole, the truth of the following propositions, some old, some new, will, I am inclined to think be found pretty well established.
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That the value of the mass of the pretious metals in the way of use of a /the/ mass of pretious metals possessed by a nation does encrease with the quantity.
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That the value of it in the way of exchange as between individual and individual in /within/ the nation does not encrease with the quantity.
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That the value in the way of exchange of the mass of the pretious
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That in acquiring a fresh value in the way of exchange by being converted into money (into a form given it for the purpose of adapting it in a special manner to the business of exchange) a mass of the pretious metals loses for so long as it continues in the shape of money all value in the way of use.
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That a nation /government/ which endeavours to perpetuate the existence of a mass of money in the shape of coin and to perpetuate its continuance within the country in that shape in proportion as it succeeds in such its endeavours, destroys utterly the value of so much of the pretious metals.
6
That in the case of an individual, true it is, that even in the shape of money, the value of the mass he possesses of the pretious metals does encrease with /in exact proportion with/ the quantity of an undiminished ratio with the quantity, because as the quantity of his particular share in the mass encreases, so does its proportion to the whole of the general or aggregate mass of money, the value of which or of so much as is employd in a given time in buying and selling things, is always exactly equal to the aggregate value of the things bought and sold within that time.
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But that this equality as between encrease of quantity and encrease of value in exchange, depends upon the non-encrease in value on the part of the masses respectively possessed by other individuals members of the same community: for if the quantity of each man’s mass encreases in the same proportion in the same time, neither his mass nor theirs will experience any encrease in value
8
That the inference that because the share of the individual - each individual - encreases in value as it encreases in magnitude so must that of the nation is a natural but not a just one but a compleatly erroneous one because in the case of an individual, as his particular share encreases in magnitude, so it does in its proportion to the whole. This is not the case with the aggregate mass belonging to the whole nation (composed of the several particular masses belonging to the several individuals) because its proportion is at all times the whole, and can never be either less or greater.
9
Be the quantity of the whole mass of money employ’d in buying and selling things ever so small the value of it will always be equal to the value of all the things equal to the buying of all the things and be the quantity of it ever so large, it can never buy more than all.
10
The overplus could buy other things from other nations, if it could be reserved and exclusively appropriated to that use: but that can never be: as it spreads in the nation it spreads among the vendible things offered to sale within this nation, and employs itself in encreasing the powers of the national stock of things that are within reach: there is little or none of the overplus left for the purchase of foreign things. It is the care of governments by their taxes and prohibitions that it shall not be so employd.
11
That it is by the encrease in the mass of real capital, and not by an encrease in the mass of money that an encrease is produced in the mass of real serviceable wealth and that by the encrease of the mass of money taken together the mass of real capital does not receive any encrease.
12
That as far as money is encreased the encrease of real wealth depends upon the encrease of the proportion of the money employd in the shape of capital: but that the encrease of this proportion
depends
depends not upon the absolute quantity of money so employd but upon the proportion between the quantity of money employd in that shape, and the quantity employd in other shapes.
13
That a decrease in the quantity /national stock/ of money would if it were rapid enough to deprive in any sensible degree persons under pecuniary engagements for terms of years of the faculty /means/ of fulfilling those engagements, would in that respect be productive of inconvenience and a source of loss not compensated for by any attendant gain.
14
But that no such sudden decrease can obtain in the course of trade.
15
That if the quantity of money in a country were so fixed as to be prevented from encreases while the quantity of things vendible not being prevented from encrease would encrease of course, a decrease to a proportionable amount would take place in respect of the faculty of fulfilling pecuniary engagements for terms of years, but that no such decrease arising from such cause could be rapid enough to produce any sensible degree of inconvenience.
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Title: [[Recapitulation] 11 Oct 1801]Description: [Recapitulation] 11 Oct 1801 Alarm Ballance Recapitulation II. 2 Wealth Encrease True Cause & Measure The terms of the proportion, upon which the encrease of real wealth depends are 1 Quantity of labour employd in encreasing the sources of wealth 2 Quantity of labour employ’d in drawing wealth in the shape of […?] of quick consumption from these sources. 16 That the only case in which any encrease in the national stock of money could be productive of any good is the case were it /who/ did not encrease to an amount beyond the encrease in the mass of real wealth: and that even then it would not be productive of any encrease in the mass of real wealth-soever by the supposition that encrease would be produced without it: and that good care[?] acts[?] in the prevention of sure evil not considerable enough to be worth regarding - an evil /inconvenience/ scarce sensible. 17 That in all cases the encrease of the quantity of money in a nation is productive of either no effect or a bad one. And that no bad effect can in any case follow from the stoppage of such encrease. 19 That to be able to be employ’d to advantage by government in its intercourse with foreign governments or nations, it ought to be so circumstanced as to be taken out of the circulation in large masses without taking away from any part of the people the faculty of fulfilling their previous /antecedent/ pecuniary engagements: and that this can not be done if it be taken from the mass of circulation: it can not be done by any mass of money which has not been hoarded up by government for that purpose in the form of a public treasure. 20 That if all governments were to stop the further encrease of money in their respective dominions, they would not add thereby to the stock of real wealth in the commercial world: since the labour now employd in producing the annual augmentation of the stock of the pretious metals rendered useless by being converted into money, would be employd either in producing a like /equal/ augmentation either in the stock of those metals in their useful state, or in the stock of other things. 21 That any one such government has it in its power to produce the effect to the amount of what would otherwise be the annual augmentation of its coinage 21 coinage, without the co-operation of any other government, without suffering any prejudice by the pursuit of the opposite portion[?] on the part of the other governments its friends enemies or rivals. Adam Smith 22 That Adam Smith was in a mistake when he considered That it was a mistaken notion on the part of Adam Smith that the institution of paper money was productive of any encrease of real wealth in the commercial world in order of the metallic money expelled by it, if any had been expelled by it. Supposing it expelled from the country it must have produced A. Smith 22 produced an addition to the money of other countries, unless it were expelled out of the world But if each country had its paper money each country would thus expell metallic money with all others, and even without owning[?] any from other countries any metallic money expelled by /from/ those countries by the paper money of those countries, our own metallic money supposing it for the moment to have been expelled from it by our own paper, would in time have flowed back into this from those other countries into which it had been expelled. 23 One who assumes in all cases the encrease of real wealth as an /a necessary/ effect of the encrease of money, will sometimes /in most cases/ conclude right: because as we have seen in all common cases in the cases that occurr in private life encrease of money is encrease of real wealth. Having thus a daily /continual/ confirmation of the truth of the proposition before his eyes it is not without extream difficulty that any man even at the situation of a stableman will be able to bring himself to make one exception to it in three in which it requires exceptions to bring it within the bounds of truth. 24 A Minister sees in every pecuniary transaction of his life a Minister sees that the more money he has, he has the more wealth: the less money the less wealth. He sees[?] /feels[?]/ this in his own instance and sees it in the instances of all his friends. Let him see what he will, he will not see a single individual in whose instance this is not true. Can he bring himself to believe it - so much as to conceive it to be otherwise than true, in the instance of all individuals put together? And yet it is so: because in the influence of the several individuals they are taken separately and in each instance 24 instance - on each occasion the money of the individual in question on this occasion is supposed to experience the encrease - the money of other individuals not experiencing from the cause in question any such encrease. But if from that same cause the money of many other individual received the same encrease an encrease in the instance of each mass proportioned to that mass - then he would find that the proposition would not be true.
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Title: [1 Nov r 1800 Paper Mischief]Description: 1 Nov r 1800 Paper Mischief Ch. IV. Mischief Proved 10 labour (to any amount worth considering for the present purpose) but what is produced by money: what is more - the more money a man has the more labour he commands. What argument to appearance /at first view/ more conclusive, prove that the quantity of wealth existing in any community at any given time will be in proportion to the quantity of money that has been employed in the production of it? All this is true: yet after all it will be no less so, that the quantity of labour produced is not unless by accident in proportion to - does not depend upon the quantity of money employd in producing it. Any quantity of wealth may be produced without any addition to the quantity of money. Any addition may be made to the quantity of money in a country without making any addition to the quantity of other wealth. In that one of two countries /periods/ which has most money true it is that in general there will be most wealth: and so as between time /place/ country/ and time / place/ country/ in the same country /period/ /time/ and that independently of any mines of the pretious metals contained in either. But in this case it is not the encrease in the quantity of money that is the cause of the encrease in the quantity of other wealth; but it is the encrease in the quantity of other wealth that is the cause of the encrease in the quantity of money. As a country without mines encreases its wealth, it encreases the amount of those masses of wealth which being collected each into[?] a single hand affords the owner a surplus by which /[…?/] he is enabled to procure foreign commodities, together masses of foreign money where with to procure more.
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Title: [22 June 1801 Polit. Economy]Description: 22 June 1801 Polit. Economy Analysis 5 In the case of all articles of intrinsic use, the quantity of use capable of being made of a given mass of any sort of article, encreases with and in proportion to the quantity Thrice[?] the quantity of corn administered in the way of food. twice[?] the quantity, quality being alike will keep alive for a given time, twice the number of human creatures /people/ or other animals: and excepting the same may be said even of articles of subservient use. But of money this can not be said. The only use it is applicable to - the only it is of is in the way of exchange The value of it does not always encrease in proportion to its quantity. In a certain sense /certain cer/ it might with more propriety even be said to be inversely as its quantity: that is /for/ the value of any part of the mass is inversely as the quantity of the whole. The value of the quantity of money given in exchange for other things in the compass of a year is always equal to that of the quantity of those things given in exchange for money in the compass of the same year. If in each of two years the quantity of things given in exchange for money has been the same, while in the latter of the two the quantity of money given in exchange for the things has been twice as great as in the former, half or any other part of the mass of money has in the latter been worth but half as much as the same part was worth in the former.
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