[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. }