JB_017_193.xml

Title: [29 Oct 1801 Polit. Economy]

Description: 29 Oct 1801

Polit. Economy

Non-Facienda

2. Encreasing Money

2

4

{ In this case the effect of such depretiation, is to produce, (as explained

elsewhere) an indirect unproductive income tax on fixed incomes, to the annual

amount of x[?] times the amount of the fresh money so introduced: x being as the

aggregate of the sum composes the annual income of individuals to the sum of

fresh money so introduced.

Call the aggregate mass of money in circulation 72 millions: and the aggregate

of national income 216 millions: 72 x 3 = 216: and let the fresh money so

introduced in the compass /course/ of a year be one million. The effect of this

one million of fresh money so introduced is to add to the 216 million, being the

money or pecuniary power representative of the aggregate amount of the national

income 3 million, making together 219 million; while the real income it self,

the vendible /the mass of consumable and other/ articles of all sorts to be had

for the money is not encreased, any otherwise than by and in proportion to the

addition made to the mass of real and really productive capital, by the first

expenditure of the money, as above.

The amount of this tax is drawn back as it were before hand by those who receive

a share of the fresh money equal to the amount of the depretiation: these

receive before hand a compensation (adequate in money at least howsoever it may

in regard to feelings) to their loss by the indirect tax. On those who receive

no share of the fresh addition to money - on those whose sole income consists in

an unencreasing sum of money, it bears with undiminished pressure.}

JB_017_329.xml

Title: [16 March 1804 + Cd Institute]

Description: 16 March 1804

+ Cd

Institute Polit. Economy

Ch.2. Leading Features

'.2.I. Wealth 2 Non Agenda

5

3

{ 2. Encreasing Money

1. Labour, not money, is the real source of wealth. All hands being employed,

and employed in the most advantageous manner wealth, real wealth could admitt of

no further increase: but money would be increasable ad infinitum.

2. The effect of every encrease of money (understand of the ratio of the

quantity of money employed in the purchase of things vendible to the quantity of

things vendible sold for money) is to impose an unprofitable Income-tax upon the

incomes of fixed-incomists.

3. If, on the first introduction of the additional money into the circulation,

it passes in the first instance into hands who employ it in the way of

unproductive expenditure,(a) the suffering from this tax remains uncompensated

altogether: if, before it comes into any hands of that description, it has come

into hands by which it has been employed in the shape of capital, the suffering

by the income-tax is partly reduced and partly compensated. It is reduced, by

the mass of things vendible produced by means of it: a mass, by the amount of

which, were it not for the correspondent increase in the mass of money, the

value of the mass of money would pro tanto have been encreased, and the prices

of things vendible decreased: it is in a certain degree, though in a very

inadequate degree, compensated for by the same means: viz: by the amount of the

addition made to the quantity of serviceable wealth - of wealth possessing a

value in the way of use.(b) Here[?], as in the abovementioned case of forced

frugality, national wealth is encreased at the expence of national comfort and

national justice.

4 No sooner however does it pass on from this its primary destination (that of

adding to real capital) to the other - viz: that of adding to unproductive

expenditure, than its operation, in the way of making an addition to real

wealth, at an end. No sooner does it go in to the money employed in the purchase

of articles for consumption, than its power of producing an addition to the mass

of the matter of real wealth is at an end: thenceforward and for ever it keeps

on contributing by its whole amount to the encrease of prices, in the same

manner as if, from the mines[?] it had come in the first instance into an

unproductive hand, without passing through any productive one.}

Note

(a) As if a proprietor of a mine of gold or silver, living solely on the income

yielded to him from his mine, and spending his whole income, as income is spent

by non-labouring hands, were to receive an encrease of such his rent in the

shape of gold or silver ready coined[?], and spend the whole of it as before.

(b) Money, while /inasmuch as/ it remains in the same hands, it possesses not of

any value in the way of physical use, has no other value than what at the

instant of its passing from hand to hand, it possesses in the way of

exchange.

JB_017_195.xml

Title: [29 Oct. 1801 Polit. Economy]

Description: 29 Oct. 1801

Polit. Economy

Non Facienda

2 Encreasing Money

4

6

{2. If the fresh money on the occasion of the first employment or expenditure

made of it is employ'd in purchases the inordinate effect of which is not to

make any immediate addition to the mass of really productive capital, it then

makes no addition to the growing mass of real wealth.

In this case there is the usurious interest as in the former - the interest of

300 per Cent - but no profit made by it. but the profit altogether wanting. The

3 million a year income-tax stands pure and neat: the ,150,000 deduction has no

place here.}

{From the amount of this depretiation and this interest is to be deducted on a

strict reckoning the sum[?] equivalent for the goods produced in each year by

the addition thus made to the mass of real capital: say 15 per Cent for ever

upon the million so employ'd. But this deduction is so small as in large[?]

sums[?] to be scarce worth bringing to account. From /Upon/ the 3 million a year

it amounts to but ,150,000.}