vsr& 
 
 r~ 
 
 I 
 
 ■
 
 TWO LETTERS, 
 
 DESCRIBING 
 
 A METHOD 
 
 OF 
 
 Increafmg the Quantity 
 
 OF 
 
 CIRCULATING-MONEY: 
 
 Upon a new and/olid Principle, 
 
 LONDON: 1799- 
 
 Printed h A. Strahan, Printers Strttt, Gcvgh Squau
 
 A METHOD 
 
 OF 
 
 Increafing the Quantity 
 
 OF 
 
 CIRCULATING- MONEY 
 
 'Upon a new and J olid Principle. 
 
 LETTER I.
 
 Tt 
 
 CONTENTS. 
 
 Sect. I.— Assumes the Necejfity of an Ex- 
 tenfion of the Circulating Medium, Page 7 
 
 Sect. II.— Bafts of a Plan for Juch an Ex- 
 tenfion. y 
 
 Sect. III. — The Planjiated. - - ib. 
 
 Sect. IV ' ,—Covfequences of the Plan to Stock- 
 Proprietors. - - 13 
 
 Sect. V. — No Danger to them. - 15 
 
 Sect. VI. — They might gain too much by it. ib. 
 
 Sect. VII. — Government muft partake with 
 
 them in the Profits. - - - 18 
 
 i 
 § Sect. VIII.— So mufi the Bank of England. 19 
 
 Sect. IX. — ^uejiion fuggefted. - 20 
 
 ^ Sect. X. — The Plan may be improved. 21 
 
 *i Sect. XI. — General Observations. - 22 
 
 Sect. XII. — Originality of the Plan. - 23 
 
 i 
 
 420796
 
 INTRODUCTION. 
 
 npHE Principle of this Propofal is to put 
 -*- a new and great Capital into circu- 
 lation, by Loans of Money, to be created in 
 the manner and upon the foundation defcribed 
 in the following Letter, addreffed to a Member 
 of the late Secret Committee of the House of 
 Commons on Bank Affairs. 
 
 The gentleman, to whom the Letter was ad- 
 dreffed, (whofe name, if I thought myfelf at liberty 
 to mention it, would add much authority to the 
 whole propofal,) being himfelf ftruck with the no, 
 velty of the meafure, and its apparent tendency to 
 public utility, has been the means of procuring 
 a confiderable degree of favour to it elsewhere. 
 ^-But, if I were to fay more of this, it could only 
 be with a view to obtain atcention,— not to in- 
 fluence the public judgment, which alone can de- 
 cide in this cafe, as in all ethers where public 
 credit is concerned.— Therefore, I mall only fay, 
 I have good reafon to think that the firfi 
 
 imprejftons,
 
 ( 6 ) 
 
 impreflions, made in the quarter to which I allude, 
 are ftill retained. 
 
 It is my intention to point out in a future 
 Letter, for which I have prepared ^materials, how 
 I propofe to confine the increafe of money, in its 
 firft application, to the afiiftance of the Landed 
 Interest j and I (hall, at the fame time, anfwer 
 fuch Objections as I may hear of, or which my 
 own thoughts may fugged to me; for, I fhall 
 difguife nothing. — In the mean time, I admit that 
 it is necefifary to the practical execution of the 
 plan, that the notes in queftion mould be ex- 
 changeable for all commodities, — by no means 
 excepting Gold; and exchangeable at par: other- 
 wife they cannot perform the office of Money. — 
 I beg permiffion to add, that I think this may be 
 accomplished. And I fhall mew how the Se- 
 curity may be doubled, both in its nature and 
 amount, without lefTening the fimplicity of the ori- 
 ginal defign; and this to the extent of proving it 
 to be absolutely impossible that the Note- 
 Creditors fhould be defrauded, or even dif appointed, 
 so long as any notion of Law and Property 
 mall continue practically to prevail in Great 
 Britain. 
 
 London, 
 2yJ April 1790,.
 
 METHOD, 
 
 fcfr. Ssfr. fcfr. 
 
 Sect. I. — Affumes the Necejfity of an Extenfion of 
 the Circulating Medium, 
 
 SIR, 
 
 OF late, we have heard but little of the plans 
 for a New Circulating Medium, with which 
 the public attention was much engaged about the 
 time of the Bank's ceafing to make payments in 
 cafh. No plan of that kind feems yet to have ob- 
 tained general approbation; and, perhaps, that 
 which I am about to fubmit to your confideration 
 may not be free from objection. 
 
 I have enrered thus upon the fubjecT: without 
 ceremony j becaufe, Sir, the indulgence you have 
 ihewn me in the feveral conferences you have ho- 
 noured me with on the occafion, has fuperfeded 
 the neceffity of any introductory matter, unlefs I 
 
 had
 
 ( 8 ) 
 
 had attempted to exprefs the feeling I have of your 
 obliging attention in this inftance, which I decline, 
 as a tafk not eafy in itfelf, and flill lefs fo, in con- 
 nection with other acts of condcfcenfion which I 
 cannot fail to recollect:, thoush I am not able to 
 acknowledge them in the manner I Ihould wifh 
 to do. 
 
 In common with all thofe who have preceded 
 me in this track, I begin with affuming that there 
 would be found great convenience in the eftablifh- 
 ment of a good, folid, circulating medium, upon 
 a more enlarged fcale than any that exifts at pre- 
 fent, and adapted to the extended and extending 
 ftate of our National Commerce, and particu- 
 larly to the wants of the landed interest. If 
 this was denied, or generally doubted, I fhould have 
 little to fay at prefent j for, if the neceffity or uti- 
 lity of fuch an eftabliPmment is not felf- evident, I 
 fhould think the time for it is not yet come. 
 
 My experience in bufinefs, however, informs me 
 that it is wanted. — Permanent loans of money are 
 now, and for a long time have been, difficult to be 
 obtained ; and this difficulty muft, from obvious 
 caufes, continue to increafe fo long as the war lafts. 
 
 Sect.
 
 ( 9 ) 
 
 Sect. II. — Bafis of a Plan for Juch an Extenfion* 
 
 Having premifed this, I proceed to (late my 
 plan for the eftablifhment of a New Circulating 
 Medium. 
 
 The bafis of it, as I have remarked in what you 
 have heard from me already, I fix upon the Na- 
 tional Debt, which is the Wealth of Indivi- 
 duals. — For commercial purpofes at leaft, I con- 
 ceive this may be deemed folid fubftantial property 
 — to a limited extent. 
 
 Suppose the National Debt due to individuals 
 to be equal to Four Hundred Millions (or 
 more) of 3 per Cent. Annuities of the value of 50 
 per cent.j that is, Two Hundred Millions 
 fterling. This fuppofition is fufficiently accurate 
 for my prefent purpofe. 
 
 Sect. III. — <£he Plan ftated. 
 
 Now, my fcheme goes to the putting of a large 
 portion, Fifty Millions, or more, of this pro- 
 perty into circulation, if fo much could be em- 
 
 b ployed 5
 
 ( io ) 
 
 ployed i and this I propofe to be done in the follow- 
 ing manner: 
 
 Let any flock-holder, who would wifh to cir- 
 culate fome part of his Stock, without felling it, 
 transfer a certain quantity of it, fuppofe twenty 
 thoufand pounds 3 per Cents, to the Governors 
 and Directors of the Bank. The Bank is then 
 to deliver to him fifty certificates, or notes of the 
 transfer, each of them to be marked as of the value 
 of £.100, or a greater quantity in number, and of 
 lefs valuerefpedivelyj but the whole together to 
 be of the amount of ^.5000 fterling. 
 
 By this means every particular quantity of flock 
 might produce a fourth part of its nominal amount 
 for the purpofes of circulation. For, I make what 
 I believe to be a well-grounded fuppofition, that the 
 mercantile world, who now take Bank-Notes in 
 payment, would, with equal confidence, receive 
 and circulate thefe Stock-Notes; the Governors 
 and Diredors of the Bank of England being, in re- 
 fpeft to the flock to be transferred to them, truflees 
 for thofe who transfer the flock, and for thofe who 
 take the flock- notes in payment, (as they now are 
 truflees for the Bank-Proprietors and the holders of 
 Bank-notes,) and the fecurity being fully equal to 
 
 that
 
 ( II ) 
 
 that upon which the credit of Bank-notes is found- 
 ed :— for, the capital and other effecls of the Bank 
 (reckoning its property in flock at the prefent 
 market-rate) is certainly fhort of twice the amount 
 of its debts. But the flock, transferred as I pro- 
 pofe, would be double in value to the notes circu- 
 lated upon its credit. 
 
 4 
 
 In the cafe I have fuggefled, the 3 per Cents, 
 would be taken at 25 ; a fuppofition low enough, 
 I fhould fuppofe, for thofe who give any degree of 
 credit whatever to the Public Funds. There can 
 be no doubt that bankers and others would allow 
 £.100 flock to be a fufficient fecurity for £.25 
 money, notwithflanding all the poflible fluctuations 
 to which the flocks are fubject. 
 
 The notes I have defcribed might be ufed for 
 loans or for capitals to trade upon i their ufe in 
 trade, and for other purpofes, being fuppofed the 
 fame as fpecie or Bank-notes. 
 
 These notes being, by fuppofition, of the fame 
 value, and pailing with the fame facility as Bank- 
 notes do, will be confidered as cash, and confe- 
 quently, if lent by the original holders, or by 
 any others who may become the holders of them, 
 would entitle the lender to receive interest on 
 
 » 2 the
 
 ( 12 ) 
 
 the loan, in like manner as the lender of bank- 
 notes now receives intereft on the loan of thofe 
 notes. 
 
 The fuppofition that thefe notes would be circu- 
 lated like bank-notes is efiential to my plan. — 
 That foundation taken away, the whole would be 
 an unfubftantial vifion ; and therefore, if this be 
 not aflented to, it would be of no ufe for me to go 
 on. But, that point granted, (fubject to re-con- 
 fideration,) I fay that every particular quantity of 
 ftock, transferred in the manner I have dated, 
 would yield a profit to the ftock-transferrer equal 
 to 5 per cent, on the amount of ftock-notes 
 obtained by him. 
 
 Twenty thousand pounds, 3 per Cent, flock, 
 would, as obferved before, produce £.5000 of 
 flock-notes, the intereft of which would be £. 250, 
 to be added to £. 600, the amount of the divi- 
 dends on £. 20,000 of that ftock. Thus £. 850 
 would be gained annually, inftead of £. 600, by 
 every proprietor of £. 20,000 ftock, who (hould 
 avail himfelf of the opportunity of procuring 
 ftock-notes, as above mentioned. 
 
 What I have faid of 3 per Cent, ftock, is to 
 be applied to the other public funds in the like 
 
 proportion $
 
 ( 13 ) 
 
 proportion i the 3 per Cents, being mentioned only 
 by way of example. 
 
 Sect. IV. — Confequences of the Plan to Stock- 
 Proprietors. 
 
 I shall purfue the fuppofition thus made, and 
 fhall trace its confequences to the (lock- proprietor, 
 treating the matter at prefent as if no other intereft 
 than his was to be confulted j difregarding, there- 
 fore, at this moment, the interefts of Govern- 
 ment and the Bank of England, both of which 
 I fhall feparately confider in what I have farther to 
 fay. In this point of view, I fuppofe the whole 
 dividends on the flock are to continue payable to 
 tne ftock- transferers; a fuppofition to be corrected 
 in the farther progrefs of this difcufllon. 
 
 £. 850 being gained annually inftead of £. 600, 
 the value of ftock may be expected to rife in pro- 
 portion to the increafe of gain. 
 
 In the fubfequent details on this point, I fhall 
 fuppofe the ftock- proprietor would transfer his 
 ftock to the truftees, upon my plan, for the fake 
 of much lefs advantage than what 1 have above 
 defcribed; for, out of the great profit above 
 alluded to, it is neceflary to provide inducements 
 
 to
 
 ( 14 ) 
 
 to Government and to the Bank of England to 
 countenance the plan. 
 
 Arprefent I ftall proceed to attend farther to 
 «he interefts of the (lock-proprietor. 
 
 What objection can be make I Can he fay his 
 flock ,3 n ed up and put om Qf h . s power ? ^ . 
 
 -he may redeem it by bringing in to the Bank a 
 quant,ty of (lock-notes equal in amount to thofe 
 ongmal ly obtained by him. Thefe being can- 
 
 C ^';«°ck would be again entirely 4: or 
 *e may fell the ftock fubjea (q 
 
 fc Ze m ° re markctab,C ' would -reafe 
 
 ers^d CHANTS,tankerS ' C ° Un ^^"— .&T-.- 
 
 would be benefited by the nkn ^a ■ , . 
 
 *e Art would derive cl Part ' CU ' ariy 
 
 their Heck v / enco «"geme„t to hold en 
 
 Z r thCy Withdraw ha,f ^ amount 
 
 par ^T7t e0{ *"*■**■»* -lizeth 
 P on,a„ d)b rocurmgpurchafesor 
 
 is. fd ;:;; uld ? acc — ** *»o 
 
 -ow o? o Ve^i r W *°"* °" * « » 
 
 The
 
 ( *-S ) 
 
 The transferrer would retain to himfelf the 
 advantage of future increafe of price, juft as if he 
 had not taken the ftock-notes. 
 
 Sect. V.— No Danger to them. 
 
 But is there no final danger of lofs to the ftock- 
 proprietor upon this plan ? None, I think. For 
 fuppofe the holders of the ftock-notes fhould be- 
 come alarmed for their fecurity by the falling of 
 ftock to 25 j and fuppofe the plan mould provide, 
 that then the ftock mould, at that price, become 
 the property of the holders of the ftock-notes, and 
 be transferred to them in proportion to the amount 
 of the notes held by them refpeftively, unlefs 
 redeemed immediately by the proprietors of the 
 ftock ; it may be made clear, that he that was 
 the original 4 ftock- holder cannot be hurt by having 
 received the notes, even though he fhould no* 
 redeem the ftock. For if he has retained the 
 right of redemption, and confequently the rifk, it 
 is by his own voluntary a£b that he has done fo. 
 He might have fold out; but, having retained the 
 ftock, he cannot fufTer more by parting with his 
 ftock now, than if he had held it on, and was now 
 to fell it, without having received any ftock-notes. 
 He may even have an advantage by buying an equal 
 
 quantity
 
 ( '6 ) 
 
 quantity of the ftock at the reduced price, fuppofing 
 it below 25, or prevent a lofs if the price is 25, or 
 upwards; and, upon both fuppofitions, five thoufand 
 pounds, or thereabouts, would replace his twenty 
 thoufand pounds ftock. 
 
 Four things muft concur in order to occafion 
 any actual lofs to the transferrer of ftock upon 
 this plan. Firft ; the ftock muft fall below 25. 
 Secondly j the transferrer muft be unable to re- 
 deem it at that reduced rate. Thirdly; the ftock 
 muft afterwards rife to a higher price. Fourthly'; 
 if there be (as of courfe there muft be) an interval 
 of time between the fall and the rife, the tranferrer 
 muft continue, during the whole interval, unable 
 to purchafe a quantity of ftock equal to what he 
 had when he obtained the notes. 
 
 The occurrence and operation of thefe numerous 
 caufes is a mod improbable fuppofition ; efpecially 
 confidering that the transferrer muft be underftood 
 to have received an equivalent in property of fome 
 kind on parting with his notes, and, therefore, may- 
 be expected to be able to redeem his ftock, or to 
 buy an equal quantity at the fuppofed price of 25. 
 
 Bur perhaps the ftock-notes may have been 
 applied to purchafe land or land-tax.—/^//, at 
 
 lead
 
 ( >7 ) 
 
 leaft the transferrer has then realized half the 
 amount of his dock at the prefent price, befides 
 the annua) increafe of £, 250 upon his £. 20,000 : 
 and he mud confider that, if he had continued to 
 hold his (lock till the fuppofed period of ultimate 
 depreciation, his lofs would be greater than it can 
 be upon any fuppofition affecting this plan ; which 
 includes the annual gain of £.250 upon the 
 £. 20,000 (lock. 
 
 Sect. VI. — They might gain too much by it. 
 
 If, according to the fuppofition above made, 
 fifty millions could thus be brought into circula- 
 tion, the gain to the dock-holders would be 
 £. 2,500,000 fterling annually, and fo in propor- 
 tion, if the circulating medium mould be ufed in 
 lefs or greater extent. 
 
 But two millions five hundred thoufand pounds 
 Would be too great a gain for the dock-holder, who 
 could not reafonably expect to have fo much, efpe- 
 cially if the fcheme be attended with only part of 
 the other advantages (including that of fafety) 
 which I have dated. 
 
 Sect.
 
 ( '8 ) 
 
 Sect. VII. — Government mufi partake with them 
 
 in the Profits. 
 
 Therefore I come now to confider the interefls 
 of Government and the Bank of England. 
 
 It may be thought proper that fo much of the 
 dividends as is equal to 5 per cent, on the ftock- 
 notes fhould be kept back by Government : that 
 is, that the payment of (b much of the dividends 
 fhould be fufpended during the war, and that the 
 amount of thef* dividends fhould at the end of the 
 war be divided between the flock-holders, the 
 Government, and the Bank of England, in fuch 
 proportions as may be agreed upon. In fpeaking 
 of the ilock-holder in this place, I mean the 
 perfon who fhould actually poffefs ihe flock at 
 that period , and his fhare of the accumulated 
 dividends fhould then be added to his capital, and 
 the future interefl of it provided for by taxes, 
 unlefs Government fhould then be able to pay the 
 arrears of dividends; I mean the flock -holder's 
 fhare of thofe dividends. In cafe a fufpenfion of 
 dividends fhould be thought improper, fome other 
 arrangement might be adopted, as the mutual 
 interefls of Government and the flock -proprietors 
 might diclaie. 
 
 If
 
 € *s ] 
 
 If Government could, by this means, fufpend 
 during the war the payment cf dividends to the 
 amount of two millions five hundred thoufand 
 pounds, or even half of that fum, fuch a poft- 
 ponement, or any equivalent advantage to Govern- 
 ment, would be attended with important confe- 
 quences. 
 
 Future Loans might be negociated on better 
 terms, the price of (locks being fuppofcd to rife as 
 well in confequence o- the advantages given to the 
 ftock- transferrers, as of the taking of a great 
 quantity of ftock out cf the market. The^RE- 
 dimpti ,n of the Land-tax would be facilitated, 
 and the neceflity to fell ftock would be very much 
 diminiihcd, at the fame time that there would 
 be a great increafe of inducements to buy and 
 hold ftock. 
 
 Sect. VIII — ^ mufi the Bank of England. 
 
 In regard to the Bank of England, the advan- 
 tages to be allotted to that company would be fuch 
 as might be agreed upon between them and the 
 ftock-transferrers, by way of an annual increafe of 
 the Bank Profits ; and alfo as a compenfation 
 for the charges of management. But there is no 
 occafion at prefent to enter into details upon this 
 part of the fubject. 
 
 P 2 Sect.
 
 ( *o ) 
 
 Sect. IX. — Quejtion Juggefted. 
 
 After all, however, there remains the queftion 
 before fuggefted : " Could thefe Stock-Notes be 
 « ufed as a CirculatingMediumjor, in other words, 
 M would they pafs as Money ?" 
 
 This I cannot determine ; but I fee many con- 
 fiderations which may be fuppofed to operate 
 towards caufing the free and general currency of 
 thefe notes. 
 
 The fecurity upon which the notes are to circu- 
 late, would be a first mortgage on the pro- 
 perty and industry of the Nation. The fcheme 
 would raife the value of the funds, and would 
 advance our Agriculture, as well as extend our 
 Trade, both foreign and domeftic, by bringing 
 into action a new and great Capital : and all this 
 would tend to improve the Strength of the 
 Nation. Hence greater Safety to every part of 
 our property. 
 
 These appear to me to be fufficiently powerful 
 inducements to the public to receive and circulate as 
 Caflj the propofed (lock -notes. 
 
 But
 
 C ** 3 
 
 But if, in fact, the fecurity for the National 
 Debt is not to be efteemed good for a fourth part 
 of its nominal amount, then, I fear, our cafe is 
 hopelefs indeed. This, however, appears to me to 
 be a groundlefs apprehenfion. 
 
 At all events, the caution of the mod fearful 
 mud haye fome limits ; and if, through the pre- 
 valence of diftruft, the notes defcribed could not be 
 circulated at 25, they might undoubtedly at fome 
 lower rate. Therefore, the objection founded on 
 fuppofed infecurity, does not reach the principle 
 of the meafure, and can only at the utmoft confine 
 its operation. 
 
 Sect. X. — The Plan may be improved. 
 
 This fch^me, if it has any thing of value in it, 
 may undoubtedly be improved; and, perhaps, the 
 indireift and collateral refults from it may be as con- 
 fiderable as its direct and immediate effects. 
 
 I am not, however, fo fond of my plan as to 
 make an unqualified fuppofition that it is capable 
 of producing fuch great advantages as I have de- 
 fcribed. Yet I do not mean to conceal that I have 
 a ftrong confidence in it i and I own, if I were to 
 
 indulge
 
 ( 22 ) 
 
 indulge my prefent thoughts, I (hould fay much 
 more of the advantages I expect from it. 
 
 Sect. XI.— General Ohfervations. 
 
 But I mail now only make a few g-/,ralOb. 
 sirvations, which mall conclude this Letter, and 
 the trouble which, Sir, you have allowed me to 
 give you. 
 
 Firft, In a commercial Country there 
 
 SHOULD BE AS LITTLE DEAD OR UNPRODUCTIVE 
 
 Capital as possible: but the wealth of indivi- 
 duals colleded in the funds is dead to trade and ge- 
 neral ufe, except only fo far as the dividends are 
 fpent and circulated, and not inverted in the lame 
 funds by way of farther accumulation. 
 
 And, fecondly, There ought to be no such 
 thing known as want of money ;— and, in rny 
 opinion, no fuch want could be known in a perfectly 
 well-regulated commercial ftate : I mean no want 
 of that kind mould be known or felt by thofe who 
 poflefs property of any kind, whether it confifts of 
 lands, merchandize, or credits well fecured. AH 
 fuch property mould enable the owner to procure 
 a representative Sign capable of general cir- 
 culation. I lay this, fubjedt to many obvious 
 
 restrictions. 
 
 Sect.
 
 ( 2 3 ) 
 
 Sect. XIL— 'Originality of the Plan. 
 
 It was, by thinking for a long time upon thefe 
 two principles, and by turning over in my mind 
 feveral plans for procuring money for fome perfons 
 of property, who found it difficult to obtain Loans, 
 that I was led to the prefent Discovery, if it is 
 one, as I believe it to be. To me, at lead it is new, 
 and fo it has appeared to thofe friends to whom I 
 have communicated it : but if any one fhall difpute 
 the abfolute originality of the thought, I fhall not 
 be much concerned about that, becaufe it is quite 
 certain that in its operation it will be new, and, 
 what is infinitely more material, the advantages of it 
 will be confined, almoil exciufively, to our own 
 Country, where alone fuch a great capital as I 
 have propofed to put in circulation is to be found. 
 
 I have the honor to be, 
 
 SIR, 
 
 London, &C. &C. &C. 
 
 Sept. 27, 1798. 
 
 "3W
 
 A METHOD 
 
 OF 
 
 Increafing the Quantity 
 
 OF 
 
 CIRCULATING-MONEY: 
 
 Upon a new and f olid Principle. 
 
 LETTER II.
 
 ADVERTISEMENT. 
 
 The meafure fuggefted in the Firft Letter 
 on this fubjecl: having been approved of by 
 a very great number of thofe who are beft 
 qualified to judge of it, — including perfons of 
 ALL ranks and parties, without diftinction; — 
 I confider it as a tribute of refpect due to 
 thofe who have given their fan&ion to the 
 general idea of the plan, to fubmit to them 
 the following detail of its propofed pradical 
 application, together with anfwers to fome 
 objections : — my deiign, in refpect to the 
 diftribution of this Letter, being to limit it, 
 for the prefent, to thofe perfons whofe opi- 
 nions and fuggeftions upon it, as a (ketch dill 
 admitting of improvement, I am delirous 
 of obtaining. 
 
 24th June 1799. 
 
 Aa 
 
 4S07i)t>
 
 CONTENTS 
 
 OF THE 
 
 SECOND LETTER. 
 
 Sect. I.— Proof of the Necejjity of an Exten- 
 fion of the Circulating Medium ; which had 
 been before ajfumed. - .. Page 7 
 
 Sect. II. — Danger of the Landed Interefi. \ \ 
 
 Sect. III. — Correction of a wrong Swppofition 
 made by fome Perfons. - - 23 
 
 
 
 Sect. IV. — Prices of Commodities not inconve- 
 niently rafed by Paper Money. . j * 
 
 Sect. V. — The Advantages of the Plan, how to 
 be difpcfed of. - jj 
 
 Sect. VI. — How the Plan may be applied to 
 the Relief of the Landed Interefi. - \% 
 
 Sect. VII. — General Advantages. » 22 
 
 a 3 Sect.
 
 ( 6 ) 
 
 Sect. VUl.—Effeff of the Plan upon the Rate 
 of Interejiy and Reduction of the National 
 Debt. - - - Pa g e 2 3 
 
 Sect. IX.— Bank of England.— How this Plan 
 may be connected with it. - - 29 
 
 Sect. X. — l^e Security and Convenience to the 
 Public under this Plan. - - 31 
 
 Sect. XI.— Conclufton. 35 
 
 Postscript, ' * - 37 
 
 A ME-
 
 METHOD, 
 
 &V. fcfr. &c. 
 
 Sect. I.— Proof of the NeceJJity of an Extenfwn of 
 the Circulating Medium j which had been before 
 aj/umed. 
 
 SIR, 
 
 I n my former letter upon the fubject of my 
 propofal of a method of increafing the quantity of 
 circulating money t I aflumed the necefiity of 
 che meafure to be felf-evident to thofe who 
 give attention to the whole circumftances 
 of the cafe: but, as I find there are feme 
 who deny the want of an increafe of circulat- 
 ing money, I fhould wifh to remind thofe per- 
 fons, that they have overlooked feveral importanc 
 confiderations. It is evident they pay no degree 
 of attention to the impracticability of borrowing 
 money on landed security, in confequence as well 
 
 of
 
 ( 8 } 
 
 of the high rate of intereft obtainable from Govern- 
 ment ftcurities, and the expectation of future gain 
 by the rife of ftocks, as of the great profits which 
 trade affords ; by the operation of which caufes, 
 the whole circulating capital of the nation is drawn 
 away from land to thofe more profitable objects ; 
 except what is taken up on annuities, — the mod 
 pernicious mode of raifing money, but at this time 
 the ^expedient by which land-owners can borrow. 
 
 The perfons who maintain that there is at prefent 
 no want of money alfo overlook the poffibility (or 
 rather the certainty) that at fome period, not very 
 diftant, trade itfelf will again fed that diftrefs 
 from the obftrufted circulation of money, which 
 occafioned fuch extremely ferious alarm in 1793 
 and 1796, and the early part of j 797. 
 
 I say this without fuppofing a want of general 
 profperiry in the country : the diftrefs I allude to 
 may even be caufed by the increafe of the com- 
 merce of the nation, which poffibly may yet be 
 doubled ; but certainly not without wanting a double 
 capital in money. 
 
 The late fudden and great increafe of taxes will 
 alfo require an addition to be made to the circu- 
 lating medium—The gold withdrawn from circu- 
 lation muft alfo be fupplied by paper. 
 
 The
 
 ( 9 ) 
 
 The unufual facility with which money, or Bank- 
 paper, which is money whilft it circulates as fucb t 
 has been procureable for fome time paft by perfons 
 of good credit, by way of difcount of commercial 
 fecurities, is chiefly a temporary confequence 
 of the preparation of money to be employed in 
 the Government loan which was eagerly expected 
 during the late winter and fpring. We all re- 
 member the difappointment of the money-lenders 
 in November laft, when Government borrowed 
 only three millions out of fourteen that the loan 
 was expected to confilt of. Since that time, no 
 doubt, there has been plenty of money for tempo- 
 rary occafions, but not to lend on mortgages or 
 on perfonal fecurity, apart from trade. Thefe 
 very opulent perfons, who boaft of fuch an abun- 
 dance of money, will not inveft any part of it in 
 purchafing the land-tax, nor in loans to private 
 perfons ; except in difcounting bills or notes for the 
 fhort period of fixty days, from which there refults 
 a greater gain than five per cent, per annum. 
 
 Permanent loans, fuch as are adapted to 
 the flow returns of agriculture, and cannot yield 
 more than the legal rate of intereft, — thefe they 
 utterly decline: and for an obvious reafon. — 
 Land-owners have no means of giving more 
 than five per cent, intereft, — except by the 
 
 jj deftructive
 
 ( io ) 
 
 deftrucYive means of granting annuities before taken 
 notice of; but perfons in trade feel no difficulty in 
 holding forth to bankers the temptation of more 
 than the flatute-rate of intereft upon loans of mo- 
 ney, by means which cujiom warrants, and which 
 the profits of trade are more than equivalent to. 
 
 No perfon who has been much accuftomed to 
 tranfact loans on mortgages will deny the want of 
 money, even its entire abfence, in that channel of 
 circulation j nor can any perfon who is moderately 
 converfant with what paries in Weftminfter-Hall be 
 uninformed of the dtftrefs which this want of circu- 
 lation occafions to thofe who, having formerly lent 
 money on land, now want to have it returned, as 
 well as to the unfortunate debtors, who cannot find 
 perfons to aflift them in paying off their debts by 
 taking transfers of the exifting mortgages. It is 
 well known to conveyancers that mortgage debts' 
 are mofi commonly difcharged (even when money 
 circulates freely) by transfers to other mortgagees, 
 and not by actual payment on the part of the land- 
 Owners, who zxtjeldom capable of redeeming their 
 lands : more frequently payment is made by felling 
 the incumbered eftates. 
 
 Sect. 

 
 C » ) 
 
 Sect. U.—Da>i S er of the Landed htereft. 
 
 Without fomething done to aflift the landed 
 interest, the property in land will change hands 
 almoft univerfally, or to a great extent, within a 
 few years : lands will be brought to fale through the 
 preffure of general diftrefs on the part of the land- 
 owners, and the price, which was for fome time 
 kept up by peculiar caufes, will then fall very low. 
 
 It is beginning to fall already ; and I have been 
 we 1 .nformed that an uncommon proportion in 
 value of the eftates put up to fale by auction within 
 the laft year and more, have been bought in for 
 want ofpurchafers at a fair price. 
 
 It is high time that the land-owners mould 
 begm to look carefully to cheir own accommodation 
 « refpea :K .the circulation of money, otherwife 
 'hey mud be ruined. This is ftating the cafe 
 w,thout exaggeration j for the merchants are o«. 
 «>ng vail fortunes, whilft the )and . owners c are 
 
 dw.ndl.ng into comparative infignificance, and are 
 m no fmall danger of becoming « heW ers of 
 wood and drawers of water" to their rivals, the 
 men of trade. 
 
 82 I SHO 
 
 ULD
 
 ( I* ) 
 
 I should not ftate the matter in thefe flron^ 
 
 o 
 
 terms, if I had not a full conviction that the landed 
 intereft, a very great part of it, is in imminent 
 danger from the circumftances above fet forth ; 
 and if I did not know that dating the cafe in a cold 
 manner, deftitute of energy, would utterly fail to 
 produce any effect upon that clafs of fociety to which 
 this part of the fubject is peculiarly addreffed. 
 
 For there are natural and permanent qualities in 
 the character of the landed gentry of every country 
 which caufe them to give a languid attention to 
 their interefts as a body, the indolent and tranquil 
 enjoyment of a revenue coming to them almoft 
 fpontaneoufly, without much thought or any la- 
 bour, having naturally the effect of indifpofing 
 them to the confideration of danger at a diftance. 
 
 Therefore I cannot reafonably expect to be 
 much liftened to by thofe who are mod con- 
 cerned in what I am now faying, unlefs fome of 
 their own order, or others whole judgment they are 
 accuftomed to refpect, fhall fupport me in warn- 
 ing them of their danger, and at the fame time 
 recommend the propofed means of relief; or until 
 a nearer approach of the mifchief, with fome 
 feeling of it, fhall awaken their attention. 
 
 Sect.
 
 ( 13 ) 
 
 Sect. 111.— 'Correction of a wrong Supfojition made 
 
 byfome Perfons. 
 
 It has been fuppofed by fome perfons that, 
 becaufe I have, in my former Letter, mentioned 
 fifty millions or more as the fum which my fcheme 
 might furnifh for the purpofes of circulation, it 
 was my view to have fuch a large fum of 
 money put into circulation whether the occa- 
 fions of the country required it or notj and 
 upon this miftaken fuppofition they have argued, 
 that a proportionable increafe of the prices of com- 
 modities would take place. But I have not 
 propofed any thing like this, though I admit 
 I might have excluded fuch a fuppofition in terms 
 more guarded and lefs liable to be mifunderftood. 
 I did not however fpeak quite incautioufly; for, after 
 mentioning fifty millions or more, I added, " if 
 "Jo much could be employed :" and in a former 
 paffage, I had propofed the fcheme to be put in 
 practice upon the ground and within the limits of 
 neceffity and utility , which I thought a fufficient in- 
 timation of the moderate ufe I wifhed to be made 
 of the plan. But even if I had contemplated an 
 immediate iffue of fuch a vaft quantity of paper 
 money, it would not have raifed any fair objection 
 to the principle of the meafure j and indeed the 
 
 whole
 
 ( H ) 
 
 whole objection is only applicable to the abufe of 
 the plan, and takes for granted that it is to be afted 
 upon without regard to ordinary difcretion. 
 
 Sect. IV. — Prices of Commodities not inconve- 
 niently raifed by Paper- Money. 
 
 There are others who have contended, that 
 an inconvenient increafe of the prices of all com- 
 modities would take place, if any addition were 
 made to the quantity of circulating-money. To 
 this I anfwer as follows: 
 
 The increafe of money would not, I think, 
 have the effeft of raifing prices in refpect to the 
 necessaries of life, becaufe the quantities of them 
 (fuppofing the money judicioufly applied by bring- 
 ing more land into cultivation) would be increased 
 in a greater proportion than the money ; yet I do 
 not deny that fuch articles of luxury or curiofity as 
 cannot be increafed in quantity by cultivation or 
 manufacture, would advance in price: but I fup- 
 pofe this will not be much infilled upon. 
 
 Further, this objeaion might with equal reafon 
 be urged againft any other meafure which mould 
 tend gradually to increafe the money of the country ; 
 
 and _
 
 ( '5 ) 
 
 and yet fuch an increafe has been at all times, and 
 probably will always continue to be, an object of 
 eager purfuit, notwithftanding the fuppofed increafe 
 of prices confequent thereon. 
 
 In fact, a moderate increafe of prices is not an 
 evil ; for fuch an increafe tends to the extenfion of 
 agriculture and manufactures, and to ftimulate in- 
 duftry in every pofTible way, and therefore is a great 
 benefit to a country by augmenting the quantity of 
 its commodities ; and this, by its reaction, prevents 
 the rife of prices from being too rapidly accelerated. 
 
 Even high prices are only difadvantageous when 
 they are occafioned by a permanent, or an extreme 
 fcarcity of commodities, or a very fudden fcarcity, 
 that is, when the demand continues for a long time, 
 or in a very uncommon degree, or fuddenly hap- 
 pens to exceed the fuppiy ; and, in general, a 
 period of high prices is foon followed by abund- 
 ance, and fometirries by extraordinary cheapnefsj 
 the high price operating as an incitement to pro- 
 duce new and greater quantities of the commodity 
 which yields an unufual profit. 
 
 Add to which, that the rife of prices is, in a great 
 degree, an imaginary evil, fo far as adding to the 
 Hock of money may be fuppofed to occafion the 
 
 increafe
 
 ( i6 ) 
 
 increafe of prices ; for, in genera], every man's mare 
 of money would be increafed too. The price of 
 labour would rife as well as other things ; and 
 this joint increafe would caufe new exertions of 
 diligence, by inciting or obliging many perfons 
 to work who are now idle, or to work with greater 
 diligence than before. 
 
 I except, however, the cafe of perfons who 
 live on fixed incomes, which they are incapable of 
 enlarging. To them, every increafe of prices 
 cannot but be a difadvantage. It is an unavoid- 
 able inconvenience, neceffarily attendant upon the 
 flationary pofition they hold. But it is not to be 
 expected that the general progrefs of fociety is to 
 be retarded, in order that thefe perfons may feel 
 no manner of inconvenience from the circum- 
 ftances which keep them in a ftate of inactivity, 
 or hinder them from bettering their fortunes. 
 The vigour of the nation cannot be kept down to 
 the par of their imbecility ; nor would this finally be 
 any benefit to them, but very much the contrary : 
 even if all neighbouring countries mould, by uni- 
 verfal agreement, confent to be flationary too, — 
 ceafing their progreflion in the arts and enjoy- 
 ments of life. However, in the end, even perfons 
 thus circumftanced would, — I mean many of them, 
 —derive advantage from the operation of the plan, 
 
 by
 
 ( '7 ) 
 
 by partaking from colIateraI an(J acdden 
 
 '"the general profperity, and *// of them would 
 
 beeaedoytheteduaionofcaxes.whic" 
 one of the mo ft probable and moft ex ten five! 
 
 not,ced m a fubfequent part of this Letter. 
 
 dijpofed of. 
 
 It has been faid, I underftand, by fome perfons, 
 
 oil iSa?S ^ in ^-the P ft ock 
 *oWer. the great advantages I havefpoken of. 
 
 I h A vb faid the emoluments to refult from the 
 Plan ought to be divided between the Stock-P™ i 
 -or. £ ; Bank of E „g,a nd) and the Q J^ 
 
 ( 3t ' the nat,on at *&,) in fuch proportions a. 
 -J be agreed upon, of courfe, JjJ and Z" 
 able proport.ons. Surely J me mare ^ 
 
 InTfT mUft ^ 8iVe " t0 tke ^-transferrer/ 
 
 2t y f n T toinducethemtoen ^^p- 
 
 P"ty m the execution of the fcheme xv 
 -"^tlhaveinWew^rbavefu^Xd. ^ 
 
 Amo this may be done in the fo.lowing manner: 
 -Let the prmlege of iffi.bg the propofed ^
 
 ( i8 ) 
 
 be given to the Subfcribers to future govern- 
 ment loans : and as the Subfcribers, with 
 this bonus given to them, would take the loans on 
 better terms, in proportion to the advantages they 
 obtained, the whole Public would by that means 
 largely participate in the profit to refult from the 
 fcheme. 
 
 Sect. VI. — How the Plan may be applied to the 
 Relief of the Landed Inter eft. 
 
 My deiign from the beginning was, and ftill is, 
 to accomplifh, if I am able, the procuring of 
 afiiftance to thofe who want money upon the fecu- 
 rity of land to enable them to pay their debts, or 
 to improve their eftates; and even this not for 
 their fakes only, but for the general good of the 
 country. 
 
 If the fcheme I have propofed mould take a 
 more extenfive range, and become applicable to 
 other purpofes befides the relief of the landed 
 intereft, it will be an accidental refult. I was 
 looking for one thing, and it may turn out that I 
 have found another of more importance; or rather 
 an application of what I had in view to a more 
 important fubjecl:. I believe this is what com- 
 monly happens in fuch cafes. 
 
 But
 
 ( '9 ) 
 
 But (in relation to the landed intereft), I think 
 the plan in queftion may be adapted to the accom- 
 modation of the land proprietors in the follow- 
 ing manner : 
 
 Let the perfons who are to obtain the notes 
 upon the fecurity of their transferred flock engage 
 to lend the notes upon mortgages of land, and 
 to depofit the mortgages in the Bank of England 
 within a limited timej their transferred (lock being 
 a fecurity for the performance of this engagement. 
 And let the Mortgages, when depofited, be de- 
 clared by the act of the Legiflature, which is to 
 eftablifh the whole meafure, a further and collateral 
 fecurity for the amount of the circulating notes ; — 
 each mortgage for the amount of the notes lent 
 thereon. Thus the note-creditor, however well 
 Satisfied he might be with the original fecurity of 
 the ftock, would have another fecurity of probably 
 twice the amount of the notes, — a fecurity far fu- 
 perior to that of an undefined, and, in fome meafure 
 one may fay, an imaginary quantity of gold depofited 
 in a Bank. Every million of notes would be repre- 
 fented by four millions of (lock and about two mil- 
 lions fterling in land !<— I do not, however, mean to 
 reprefent this additional fecurity as necessary to 
 give ftreagth to the original plan. I propofe it as 
 
 c 2 fubordinate
 
 C *° ) 
 
 fubordinate and convenient merely, not at all as 
 being efiential. 
 
 The mortgages when depofited would be ca- 
 pable of being transferred like other mortgages, 
 but always fubject to a general lien for the amount 
 of the notes lent thereon j and might be difcharged 
 by bringing in to be cancelled an equal amount in 
 notes of the fame kind j thefe being cancelled, 
 (that is, an equal amount, not the identical notes 
 lent upon each mortgage,) the land might be re- 
 conveyed to the proper owner for the time being, 
 difcharged of the mortgage. And, at the fame 
 time, the transferred ftock connected with the 
 mortgage fo releafed, might be re- transferred tQ 
 the perfon to whom it fhould then belong. 
 
 By this means there would be a confrant ten- 
 dency of fome portion of the notes to return into 
 the Bank to be cancelled j which would prevent an 
 exceflive accumulation of the quantity ; fome pe- 
 riods might alfo be fixed for this purpofe, and with 
 this view j whereby the gradual and final extinction 
 of the notes might be provided for, if a change of 
 circumftances (hould require fuch extinction, 
 
 This operation of lending upon mortgages 
 {hould be left, I think, to the difcretjon of the 
 
 INDI-
 
 ( 21 ) 
 
 individuals by whom the loans are made, both in 
 refpect to the titles to the mortgaged lands, and the 
 quantity of fecurity, and, within fome limits to 
 be prefcribed, the periods of repayment alfo ; 
 except that fome fuperintendence would be proper 
 merely to ascertain that the loans were made bona 
 fide upon the lands appearing in the feveral mort- 
 gages, and not employed for any other purpofe in 
 the firfl: inftance. — Of which the depofit of the 
 mortgages, with proper infpection, would furnifh 
 good evidence. 
 
 The rifk of the fecurity would upon this footing 
 reft upon each individual lender; but that rifk, 
 after the plan fhall have been acted upon for fome 
 confiderable time, would be much lefs than it is 
 now in fimilar loans ; becaufe, as by the means pro- 
 pofed there would be eftablifhed a very extenfive 
 regifter of mortgages, the difputes and frauds which 
 too often attend fecurities of that nature would 
 to a great degree be avoided. 
 
 This reftricYion of the loans (fo long as it mould 
 be thought right to continue fuch redaction) to 
 landed fecurities would in itfelf limit the quantity 
 of the propofed notes to the amount of the demand 
 of money by land-owners defirous of borrowing. 
 From them the money would be abforbed into the 
 
 general
 
 ( 22 ) 
 
 general circulation, by payment of their debts, and 
 by their making agricultural and other improve- 
 ments. — By this means, alfo, tradefmen who are 
 diftreffed for want of more early payment than they 
 now receive, would be enabled to carry on their 
 bufinefs and make their own payments with greater 
 facility and more comfort than they can do at 
 prefent. 
 
 Sect. VII. — General Advantages. 
 
 Thus, public industry would receive a new 
 impulfe, employment would be given to many who 
 are now in want of it, lands now unimproved and 
 wafte would be brought into cultivation, houfes and 
 other buildings would be repaired or erected, canals 
 would be completed that are now left unfinifhed for 
 want of money, bridges would be built, mines 
 would be worked, new sources of trade would be 
 opened, and commerce in a thoufand ways would 
 be invigorated and put into a ftate of activity. 
 
 This may feem to fuppofe a more free ufe of 
 the propofed money than could probably take place 
 through loans on land only j but in whatever way, 
 or to whatever extent, the money mould be em- 
 ployed, the mafs and quantity of ufeful and neeeflary 
 
 commodities,
 
 ( *3 ) 
 
 commodities, and confequently the comforts of 
 the people, would be inereafed by this additional 
 ftimulus given to the national exertion. This in- 
 creafe would be proportionably greater than the 
 increafe of money, fuppofing the latter to be added 
 to with difcretion and by flow and gentle degrees, 
 and not by an inundation of new reprefentative- 
 figns ; for it muft all along be borne in mind, that 
 public wisdom is to direct the operation and to be 
 employed in controlling the tides of this new 
 money. 
 
 Sect. VIII. — EffeR of the Plan upon the Rate of 
 Intereft, and Reduction of the National Debt, 
 
 One of the mod direct confequences to be ex- 
 pected from my plan, is the lowering of the rate 
 of interest. If it fhouid be reduced generally 
 below five per cent, that reduction would take 
 away a part of the gain originally computed in the 
 plan. But this would be counterbalanced by the 
 good effects which a low rate of intereft always 
 produces, and by other beneficial confequences 
 which the plan may be made to accomplifh. 
 
 Indeed, this lowering of the rate of intereft 
 would be, above all other means, I eonceive, the 
 
 heft
 
 ( *4 ) 
 
 beft auxiliary to the fund eftablifhed by Parliament 
 for relieving the nation from the preffure of it! 
 
 GREAT DEBT. 
 
 A most happy event it would be, if the five per 
 cent, flock could be reduced to four, and the other 
 ftocks in like proportion. A reduction to that 
 extent would be the fame thing in fubftance as a 
 gratuitous extinction of a fifth part of the na- 
 tional debt j which confifts altcgether, in re- 
 fpeft to the right of demanding payment, in the 
 annuity payable by the nation to its creditors. 
 Nor would it be difficult to effect a reduftion to 
 this amount by the help of the plan in queftion i 
 fuppofing the funds fhall ever again come to the 
 prices they were at in 1792; a fuppofition which 
 this plan would alfo tend to realize. I admit that 
 this reduction can only accompany the fall of the 
 market- rate of intereft. 
 
 This operation of diminifhing the annual out- 
 going might begin precifely at the period when 
 the Sinking Fund would lofe part of its beneficial 
 efficacy, in refpe<5t to buying up the public debt, 
 on account of the near approach of 3 per cent, 
 flock to par j in which flock purchafes could then 
 no longer be made with advantage, till the whole 
 of the 5 per cent, and 4 per cent, flocks fhould be 
 
 bought
 
 ( *5 ) 
 
 bought up. And though the latter (locks would 
 be above par, the public would derive no gain 
 from that circumftance, though the (lock-holder 
 might feem to fuftain a lofs by having his (lock 
 paid off at par. But the near profpecl: of fuch an 
 event would keep thofe (locks from attaining the 
 prices they would otherwife reach. 
 
 As, at the period I am now fpeaking of, the 
 annual produce of the Sinking Fund could not, 
 for the foregoing reafons, be applied with great ad- 
 vantage in buying up the national debt, I fubmit 
 it might then be better difpofed of, as a premium, 
 in conjunction with the privilege of iffuing the 
 notes in queflion, towards inducing monied men to 
 lend large fums of money at a rate below the then 
 current rate of intereft to be applied in paying off 
 at par thofe debts which now carry a high intereft. 
 It will be foon found that I am not fpeaking with- 
 out confideration when I talk of borrowing below 
 the current rate of intereft, if that is not apparent 
 already. 
 
 In this way, though the nominal amount of the 
 debt might continue to be the fame as before, dill 
 the nation would be relieved by the reduction of 
 the annuity in which the debt fubftantially confifts; 
 and Taxes might then be repealed to a proportion- 
 
 D able
 
 ( »« ) 
 
 able amount, or the Sinking Fund might be en- 
 larged, fuppofing the whole taxes to be fuflained 
 fome time longer : or, the/aving might be applied 
 in part to each of thefe objects. 
 
 To explain this propofed operation by an ex- 
 ample : — Let us imagine an eftate to be incum- 
 bered with a debt of £. 100,000, at 5 percent, in- 
 tereft, or^. 5000 per annum. Then conceive the 
 owner to be pofTeffed of £. 1 0,000 ' in ready money, 
 which if applied towards payment of the debt 
 would reduce it to £. 90,000, and the annual inte- 
 reft to £. 4500. But the owner, having regard as 
 well to his own future convenience as to that of his 
 family after him, is defircus that his eftate fhould 
 be liable to a lefs annual outgoing; and therefore 
 propofes to give the ten thoujand pounds of which 
 he is pofiefled, as a -premium to induce fome perfon 
 to pay off the debt on the eftate, and to accept a 
 transfer of the fecurity at a lower rate than 5 per 
 cent. And, in order further to abate the intereft, 
 he offers to give to the lender fome extremely 'va- 
 luable privileges of which he may be fuppofed to 
 have the command. Add to this an expectation 
 then formed, that the current rate of intereft will 
 fpeedily fall below 4 per cent, by the operation of 
 fome known caufes. 
 
 Under
 
 ( *7 ) 
 
 Under thele circumftances, we may fuppofe 
 that the new lender would advance his money ac a 
 lower rate than 5, or even than 4 per cent. — Grant 
 it might be 3 per cent. — And if this mould be the 
 cafe, the annual incumbrance on the eftate will be 
 reduced from £. 5000 to /. 3000. 
 
 I think the analogy is fo plain, that it is hardly 
 necefTary to add that the £. 10,000 reprefents the 
 produce of the Sinking Fund for a ftiort period, 
 fuppofe two or three years (more or lefs)j and 
 the privileges hinted at are correlative to the iffuing 
 of notes to circulate as money on the credit of 
 ftock.— The reft is quite obvious. 
 
 Supposing this to be underftood and aflented 
 to, I may now go on to fay, that if, at the period 
 above alluded to, the produce of the Income Tax 
 mould be applied in the fame manner towards the 
 reduclion of the rate of intereft, the effeft produced 
 in thac way would be greater, and the tax itfelf 
 might properly be made to cezkfooner, than by its 
 application towards extinguishing the capital of 
 the public debt. 
 
 And in this refpeft, as well as in the general 
 tendency of the plan to produce an abatement of 
 
 d 2 taxes,
 
 ( 38 ) 
 
 taxes> pcrfons of fixed incomes would have the 
 fatisfaction of feeing their own advantage connected 
 with the public welfare; a circumftance which I 
 have before alluded to, and which I have great 
 pleafure in thus explaining and confirming : for I 
 am anxious that my propofal mould produce 
 nothing but good ; if that can be. 
 
 I allow, that-fo far as the produce of the Sinking 
 Fund and that of the Income Tax are called in aid of 
 this reduction of the annuity, the reduction would 
 not be gratuitous j it is true : — but this does not 
 hinder my firft fuggeftion on this point from being 
 alfo true, namely, that the reduction in queftion 
 might be brought about merely and folely by the 
 help of this plan.*— I believe it might, confidering 
 the command over the rate of interefi which it 
 would give to thofe who hold the reins of govern- 
 ment: a molt important control in the hands of 
 thofe who are to manage on the part of the debtor ! 
 
 Yet it (till may be proper to make the Sinking 
 Fund and Income Tax co-operate to the fame end j 
 by which means a greater and more fpeedy effect 
 will be produced towards leffening the national 
 debt, than could be managed by the unaffifted 
 operation of this plan. 
 
 There
 
 ( 29 ) 
 
 There certainly is not any thing that can fo ef- 
 fectually promote this reduction of the annual out- 
 going, as keeping the circulation of money con- 
 ftantly full, and by that means lowering the rate of 
 interefr. j which hitherto there has not exifted the 
 means of doing, but which by a right ufe of my 
 plan may be accomplilhed : and this makes it be, 
 what I humbly conceive it is, — a great political en- 
 gine j in a word, a new power. I cannot refrain 
 from faying Jo much ; for either it is that, or it is 
 
 NOTHING. 
 
 Sect. IX. — Bank of England. — How this Plan 
 may be connetled with it. 
 
 It appears from the evidence before the secret 
 committee on bank affairs, that there were 
 times within the ten years which preceded the 
 Bank's ceafing to make payments in cafh, when 
 the directors deliberated on reducing the rate of dis- 
 count: but they never did it ; and though the rea- 
 fons why they did not are left to be conjectured, it 
 appears to me moft clear that one of the principal 
 caufes which hindered the eftablifhment of that fa- 
 lutary regulation, was an uncertainty on the part of 
 the Bank, whether they could conftantly keep the 
 circulation full, or whether they might venture to 
 
 encourage
 
 ( 3° ) 
 
 encourage the abundant circulation which a low rate 
 of intereft would tend to promote. 
 
 How foon, under the prefent circumftances, the 
 Bank may again think fit to leflen the amount of 
 their difcounts, I do not pretend to conjecture; 
 but forne confiderable effect in that way might pro- 
 bably be produced by a repeal of the prefent reftric- 
 tion on the iffue of eajh. i 
 
 I now come to fliew how my plan may be con- 
 nected with the eftablifhment of the Bank of 
 
 England. 
 
 I submit that that Bank, though it has peculiar 
 interefts of its own, may be moulded to purpofes 
 of public utility within the limits of a juft and 
 reafonable regard to thofe its interefts. It ought 
 not to (land in the way of the general good of 
 the community. 
 
 Therefore, with due regard to the Bank inte- 
 refts, I go on to fay that there ought to be a 
 proportion between the Bank capital and effects, 
 and the amount of the notes circulated on the 
 credit thereof. 
 
 I presume to fuggeft, that that proportion 
 ftiould be publicly known and regulated by law. 
 
 This
 
 ( 3» ) 
 
 This publicity would at all times protect the Bank 
 againft a run upon it, which can only proceed from 
 panic fears and a diftruft of its fecurity, occafioned 
 by ignorance of its actual fituation. 
 
 The amount of the circulating notes of the 
 Bank, that is to fay, circulating on the credit of the 
 Bank capital ought never to exceed a fixed fum ; 
 let us fuppofe twelve millions. 
 
 All circulating bank paper beyond that amount 
 ought to reft on other fecurity. 
 
 Now to apply thefe principles; let the Bank 
 iffue its own notes inftead of the notes I have 
 called (lock-notes. Let there be no diftinction. 
 
 But let the Bank be permanently protetted by 
 law againft paying cash beyond the amount of its 
 own proper or reftricted quantity of notes — its 
 own debt — the twelve millions above mentioned. 
 
 Now fuppofe twenty millions to be in circulation, 
 or any given fum exceeding twelve millions, the 
 Bank might be liable (fuppofing the prefent re- 
 ftri&ion taken off) to be called upon for cajh 
 to the amount of twelve millions j — but the 
 lurplus fum they could not be required to pay in 
 
 caih i
 
 ( 3* ) 
 
 cafh; therefore they could not fay their own eftablifli- 
 ment was endangered by the additional quantity of 
 notes circulated on the credit of ftock. 
 
 But if twenty millions were in circulation, the ge- 
 neral call on the Bank for cafh may be fuppofed to 
 be proportionably greater than if only twelve millions 
 circulated ; therefore the Bank mud keep a greater 
 proportion of gold in their treafury to carry on its 
 bufinefs; and for this, as well as for the manage- 
 ment of the additional iflue of notes, the Bank 
 fliould receive a compenfation, including a reafon- 
 able profit.—I fhall for the prefent reft the matter 
 here fo far as concerns the Bank, conceiving that 
 all its eflential interefts are thus fully taken care of. 
 
 Sect. X. — The Security and Convenience to the 
 Public under this Plan. 
 
 In refpeft to the Public, I cannot difcover any 
 objection that they can make to the increafed cir- 
 culation of bank notes upon the principles now 
 laid down. They have been content with an almoft 
 total reftriftion of the iffue of gold in payment of 
 bank notes, and why fhould they not be equally 
 well content with having a moderate proportion of 
 thofe notes permanently exempted from being 
 
 paid
 
 ( 33 ) 
 paid in caft there being other and molt abundant 
 fecunty for their amount ?_To fuppofe any incon- 
 ven.ence one muft make a previous fupp f ltion 
 hat all the notes of the Bank of England, circu- 
 lating upon the credit of their own capital, are re 
 qu,red to be paid in cam, with a fettled purpofe not 
 to let ,t return there. But this fuppofes the natural 
 death of the Bank , a perpetual ceffation of its ufe 
 as a bank: a moit chimerical fuppofition ! But 
 <ven grantmg this infinitely improbable event to 
 take place, (till the furplus quantity of notes would 
 be reprefented by a fourfold quantity of flock and 
 a double value in land, and thefe remaining notes 
 would then be more convenient and necelTary than 
 ever: for the Bank of England notes, its own 
 proper and rented quantity, being fuppofed ex- 
 fngmlhed, the furplus notes would be eflenti.il, 
 neceflary to the purpofes of commerce, if any were 
 luppofed to remain. 
 
 These notes would therefore continue 
 to circulate, and by fuitable proviflons to 
 be made by the Legiflature at that time, might 
 be liquidated in gold and filver as occaffon 
 might require. To fuppofe the contrary, is 
 to fuppofe trade annihilated and all occafions for 
 remittances from place to place within Great Britain 
 to be put an end to for ever. So that it is only 
 by .magming feveral events to take place, each 
 
 " ot
 
 ( 34 ) 
 
 of them involving very high degrees of impro- 
 bability, that the circulation of the propofed notes 
 once begun can be expected ever to ceafe. 
 
 The fuppofition of the extinction of that quantity 
 of notes which is peculiarly to belong to the Bank of 
 England, I need hardly fay is made by way of argu- 
 ment, and not with any expectation of its ever 
 being realized. But the very putting of fuch a cafe, 
 even in this way, may appear alarming to 
 Tome j therefore, I might propofe that the 
 whole profits to refult from the new quantity 
 c? notes fhould be, annually or half yearly, fub- 
 jected in the firft place to indemnify the Bank of 
 England againfl fuch lofs or detriment as this 
 fcheme may bring upon them j that indemnity 
 being made good out of the dividends of the 
 transferred Hock. I believe fuch a guarantee 
 (under circumftances fo very improbable) from 
 the new fyftem to the old one, would not de- 
 prive the former, the new fyftem, of any part 
 of its efficacy, or caufe the ftock- proprietors to 
 abate their expectations of gain from the operation 
 of the fcheme. The effect of fuch arrangement 
 would be, that the Bank of England would have 
 conftantly a profit upon twelve millions, or what- 
 ever might be the reftricted or the actual amount 
 of their circulation, not exceeding twelve millions; 
 and the ftock transferrers would have the profit upon 
 ? 3 whatever
 
 ( 3S ) 
 
 whatever might at any time be the additional cuan- 
 «y, fubjecl, in refpe* to the latter, to a proper 
 
 dedoa, „ out of the dividends of tfae tran ^ r P ed 
 
 ftock for the charges of management and otherwife 
 •" favour of the Bank._I believe this will appear 
 eafily .ntelligible to thofe who will take the trouble 
 ftfoiHm a little upon the point: but I am fen. 
 fiWe th,s part of the cafe requires rather more 
 attention than the reft.-It is, however, of the 
 leaft confluence, as it applies on]y ^ ^ ^ 
 
 improbable of all the fuppofitions which the cafe 
 fequ,res to be made: and if it creates a difficulty 
 in the m,nd of any reader, it may be pafled over 
 without any difadvantage to the right comprehen- 
 sion of the fcheme: for it is only an anfwer to a 
 very refined and even imaginary objeflion. 
 
 Sect. XI — Conclufion. 
 
 BuT.theonginalqueftion recurs :_Is there a want 
 of circulating-money? And alfo the other queltion, 
 -Win the Public receive and circulate ibefe notes 
 « ^-Concerning both of which queftions, if 
 I exprefiid naturally and without referve all that I 
 think and feel, I ffi ou l d manifeft fuch g ^ 
 
 confidence of having made good what I have had in 
 
 ■en 
 
 2 1 
 
 view,
 
 ( 36 ) 
 
 view, as would fcarcely feem confident with that 
 deference with which I mean, Sir, to fubmit the 
 whole matter to your fuperior difcernment; as I 
 muft ultimately do to the judgment of the Public. 
 
 For the fake of brevity, and for other reafons, 
 I have omitted fome things that might be faid in 
 confirmation of my pofitions, and perhaps even 
 fome explanations that may be thought necefTary by 
 thofe who are fond of minute ftatements; but I 
 think it bed to leave the matter here.— Permit me, 
 therefore, to conclude with what I cannot but think 
 very honourable to myfelf— I mean, a declaration 
 of the fincere and refpe&ful attachment with which 
 I am bound ever to be, 
 
 SIR, 
 
 Your devoted and faithful fervant, 
 &c. cVc. &c. 
 
 London, 
 
 iZtbJune 1799. 
 
 "SMS"
 
 - 
 
 POSTSCRIPT- 
 
 
 A small number of Copies of this Second Letter 
 having been diftributed, I have the fatisfadion to 
 find kis allowed, by perfons in whofe judgment I 
 have great reafon to confide, that the Scheme is 
 practicable, and may prove useful in its frefent 
 Jhape.-But I neither expeft nor defire its adop- 
 tion till the necefiity of it (hall be generally acknow- 
 ledged.— Perhaps the univerfal admiflion of this 
 necefiity is very near at hand ; for at this moment 
 an uncommonly great Scarcity of Money (fuch as 
 was predicted in page 8. of this Letter) is felt in 
 Trade, as well as by the Landed Interest; 
 and this Scarcity, if permitted to continue and in- 
 creafe, (which it will do, unlefs checked by timely 
 precautions,) will be productive of extremely dif- 
 trefiing consequences. 
 
 There were inferted, in the diftributed Copies of 
 this Letter, fome particular objcStims which had 
 been made to the propofal, as dated in the nrft 
 Letter, together with anfwers thereto. Thofe ob- 
 je&ions are now omitted, the latter part of the 
 Letter which contained them having been re-pnnted 
 
 for
 
 
 ( 3* ) 
 
 for that purpofc.-This was done in compliance 
 with a wifli from the quarter from which the objec- 
 tions were communicated to me. 
 
 I have not heard of any other objections which, 
 in my opinion, (judging with as perfect an indif' 
 ference as I am able to do in my own cafe,) apply 
 fairly and correftly to the plan ; fuppofing the 
 Explanations and Modifications contained in this 
 Second Letter to be duly confidered. 
 
 Z\th $tj>t. 1799. 
 
 *%&* 
 
 Printed by A. Strahan, Printers- Street, London.