[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.