JB_003_404.xml

Title: [27th. July 1801 II + Eden]

Description: 27th. July 1801

II +

Eden

Interest Note

1

{3}41

20. p.3

Observations continued.

II. “As to the new currency – The grounds of expectation (p.42) appear to be very

narrow. The circulation of Banker’s paper, bearing interest, is mentioned as the

principal one” (No such thing.) “Country Bankers indeed allow interest on

deposits at their Banks; and some few may issue notes bearing interest. But in

what part of England do such notes circulate to any considerable extent?”

Counter-Observations.

I know not, and I do not care – this question may be best answered by a string of

other questions. – 1 In what part of England lives there a Banker whose security

/is/ all over England is looked upon as being as good as /upon a par with/ that

of Government? 2 In how many parts of England are there Bankers, that give,

secured in the shape of interest-bearing notes, an interest which amounts in

reality to so much as 3 per Cent? 3. In how many instances do these

interest-bearing notes afford, like Exchequer Bills, even sums, or aliquot parts

of even sums, for daily interest? 4. In how many instances are they adapted, by

diversity of magnitude, to every diversity in the amount of the capacity for

taking them on the part of individuals borrowing them or taking them in

payment?

JB_003_406.xml

Title: [27th July 1801 Eden Interest]

Description: 27th July 1801

Eden

Interest Notes

3

43[?]

paper which I should expect to see in circulation? So many points of distinction

as you have seen – (and I know not that they are all that might be seen) are

they not all together enough to constitute a difference? Is there any one of

them that does not constitute an advantage? Some of these advantages – the

principal ones – those which respect security – duration – rate of interest

facility of calculation are in the very page and sentence he referrs to,+

staring him in the face: but he fancies he annihilates them, when he shuts his

eyes.

In mentioning the rate of interest allowed by some of the Country Bankers, on

interest-bearing notes issued by them, I mentioned it for the principal if not

sole purpose, of shewing that an interest so much inferior – not only to the 5

per Cent more or less, afforded by the existing Government securities, but even

to the almost 3 per Cent proposed to be allowed by Government on the proposed

new Securities – actually met with individuals to accept it. I might have gone

further: for, to judge by what I have since heard, the example of

many

+ p.42.

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.