[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.