the high price of bullion-第9节

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interest　would；　during　that　interval；　be　under　its　natural　level；



but　as　soon　as　the　additional　sum　of　notes　or　of　money　became



absorbed　in　the　general　circulation；　the　rate　of　interest　would



be　as　high；　and　new　loans　would　be　demanded　with　as　much



eagerness　as　before　the　additional　issues。



　　　　The　circulation　can　never　be　over…full。　If　it　be　one　of　gold



and　silver；　any　increase　in　its　quantity　will　be　spread　over　the



world。　If　it　be　one　of　paper；　it　will　diffuse　itself　only　in　the



country　where　it　is　issued。　Its　effects　on　prices　will　then　be



only　local　and　nominal；　as　a　compensation　by　means　of　the



exchange　will　be　made　to　foreign　purchasers。



　　　　To　suppose　that　any　increased　issues　of　the　Bank　can　have　the



effect　of　permanently　lowering　the　rate　of　interest；　and



satisfying　the　demands　of　all　borrowers；　so　that　there　will　be



none　to　apply　for　new　loans；　or　that　a　productive　gold　or　silver



mine　can　have　such　an　effect；　is　to　attribute　a　power　to　the



circulating　medium　which　it　can　never　possess。　Banks　would；　if



this　were　possible；　become　powerful　engines　indeed。　By　creating



paper　money；　and　lending　it　at　three　or　two　per　cent。　under　the



present　market　rate　of　interest；　the　Bank　would　reduce　the



profits　on　trade　in　the　same　proportion；　and　if　they　were



sufficiently　patriotic　to　lend　their　notes　at　an　interest　no



higher　than　necessary　to　pay　the　expences　of　their　establishment；





profits　would　be　still　further　reduced；　no　nation；　but　by　similar



means；　could　enter　into　competition　with　us；　we　should　engross



the　trade　of　the　world。　To　what　absurdities　would　not　such　a



theory　lead　us！　Profits　can　only　be　lowered　by　a　competition　of



capitals　not　consisting　of　circulating　medium。　As　the　increase　of



Bank…notes　does　not　add　to　this　species　of　capital；　as　it　neither



increases　our　exportable　commodities；　our　machinery；　or　our　raw



materials；　it　cannot　add　to　our　profits　nor　lower　interest。　（11*）



　　　　When　any　one　borrows　money　for　the　purpose　of　entering　into



trade；　he　borrows　it　as　a　medium　by　which　he　can　possess　himself



of　〃　materials；　provisions；　etc。〃　to　carry　on　that　trade；　and　it



can　be　of　little　consequence　to　him；　provided　he　obtain　the



quantity　of　materials；　etc。　necessary；　whether　he　be　obliged　to



borrow　a　thousand；　or　ten　thousand　pieces　of　money。　If　he　borrow



ten　thousand；　the　produce　of　his　manufacture　will　be　ten　times



the　nominal　value　of　what　it　would　have　been；　had　one　thousand



been　sufficient　for　the　same　purpose。　The　capital　actually



employed　in　the　county　is　necessarily　limited　to　the　amount　of



the　〃materials；　provisions；　etc。〃　and　might　be　made　equally



productive；　though　not　with　equal　facility；　if　trade　were　carried



on　wholly　by　barter。　The　successive　possessors　of　the　circulating



medium　have　the　command　over　this　capital：　but　however　abundant



may　be　the　quantity　of　money　or　of　bank…notes；　though　it　may



increase　the　nominal　prices　of　commodities；　though　it　may



distribute　the　productive　capital　in　different　proportions；



though　the　Bank；　by　increasing　the　quantity　of　their　notes；　may



enable　A　to　carry　on　part　of　the　business　formerly　engrossed　by　B



and　C；　nothing　will　be　added　to　the　real　revenue　and　wealth　of



the　country。　B　and　C　may　be　injured；　and　A　and　the　Bank　may　be



gainers；　but　they　will　gain　exactly　what　B　and　C　lose。　There　will



be　a　violent　and　an　unjust　transfer　of　property；　but　no　benefit



whatever　will　be　gained　by　the　community。



　　　　For　these　reasons　I　am　of　opinion　that　the　funds　are　not



indebted　for　their　high　price　to　the　depreciation　of　our



currency。　Their　price　must　be　regulated　by　the　general　rate　of



interest　given　for　money。　If　before　the　depreciation　I　gave



thirty　years'　purchase　for　land；　and　twenty…five　for　an　annuity



in　the　stocks；　I　can　after　the　depreciation　give　a　larger　sum　for



the　purchase　of　land；　without　giving　more　years'　purchase；



because　the　produce　of　the　land　will　sell　for　a　greater　nominal



value　in　consequence　of　the　depreciation；　but　as　the　annuity　in



the　funds　is　paid　in　the　depreciated　medium；　there　can　be　no



reason　why　I　should　give　a　greater　nominal　value　for　it　after



than　before　the　depreciation。



　　　　If　guineas　were　degraded　by　clipping　to　half　their　present



value；　every　commodity　as　well　as　land　would　rise　to　double　its



present　nominal　value；　but　as　the　interest　of　the　stocks　would　be



paid　in　the　degraded　guineas；　they　would；　on　that　account；



experience　no　rise。



　　　　The　remedy　which　I　propose　for　all　the　evils　in　our　currency；



is　that　the　Bank　should　gradually　decrease　the　amount　of　their



notes　in　circulation　until　they　shall　have　rendered　the　reminder



of　equal　value　with　the　coins　which　they　represent；　or；　in　other



words；　till　the　prices　of　gold　and　silver　bullion　shall　be



brought　down　to　their　mint　price。　I　am　well　aware　that　the　total



failure　of　paper　credit　would　be　attended　with　the　most



disastrous　consequences　to　the　trade　and　commerce　of　the　county；



and　even　its　sudden　limitation　would　occasion　so　much　ruin　and



distress；　that　it　would　be　highly　inexpedient　to　have　recourse　to



it　as　the　means　of　restoring　our　currency　to　its　just　and



equitable　value。



　　　　If　the　Bank　were　possessed　of　more　guineas　than　they　had



notes　in　circulation；　they　could　not；　without　great　injury　to　the



country；　pay　their　notes　in　specie；　while　the　price　of　gold



bullion　continued　greatly　above　the　mint　price；　and　the　foreign



exchanges　unfavourable　to　us。　The　excess　of　our　currency　would　be



exchanged　for　guineas　at　the　Bank　and　exported；　and　would　be



suddenly　withdrawn　from　circulation。　Before　therefore　they　can



safely　pay　in　specie；　the　excess　of　notes　must　be　gradually



withdrawn　from　circulation。　If　gradually　done；　little



inconvenience　would　be　felt；　so　that　the　principle　were　fairly



admitted；　it　would　be　for　future　consideration　whether　the　object



should　be　accomplished　in　one　year　or　in　five。　I　am　fully



persuaded　that　we　shall　never　restore　our　currency　to　its



equitable　state；　but　by　this　preliminary　step；　or　by　the　total



overthrow　of　our　paper　credit。



　　　　If　the　Bank　directors　had　kept　the　amount　of　their　notes



within　reasonable　bounds；　if　they　had　acted　up　to　the　principle



which　they　have　avowed　to　have　been　that　which　regulated　their



issues　when　they　were　obliged　to　pay　their　notes　in　specie；



namely；　to　limit　their　notes　to　that　amount　which　should　prevent



the　excess　of　the　market　above　the　mint　price　of　gold；　we　should



not　have　been　now　exposed　to　all　the　evils　of　a　depreciated；　and



perpetually　varying　currency。



　　　　Though　the　Bank　derive　considerable　advantage　from　the



present　system；　though　the　price　of　their　capital　stock　has



nearly　doubled　since　1797；　and　their　dividends　have



proportionally　increased；　I　am　ready　to　admit　with　Mr　Thornton；



that　the　directors；　as　monied　men；　sustain　losses　in　common　with



others　by　a　depreciation　of　the　currency；　much　more　serious　to



them　than　any　advantages　which　they　may　reap　from　it　as



proprietors　of　Bank　stock。　I　do　therefore　acquit　them　of　being



influenced　by　interested　motives；　but　their　mistakes；　if　they　are



such；　are　in　their　effects　quite　as　pernicious　to　the　community。



　　　　The　extraordinary　powers　with　which　they　are　entrusted　enable



them　to　regulate　at　their　pleasure　the　price　at　which　those　who



are　possessed　of　a　particular　kind　of　property；　called　money；



shall　dispose　of　it。　The　Bank　directors　have　imposed　upon　these



holders　of　money　all　the　evils　of　a　maximum。　To…day　it　is　their



pleasure　that　4　l。　10s。　shall　pass　for　3　l。　17s。　10　1/2d。；



to…morrow　they　may　degrade　4　l。　15s。　to　the　same　value；　and　in



another　year　10　l。　may　not　be　worth　more。　By　what　an　insecure



tenure　is　property　consisting　of　money　or　annuities　paid　in　money



held！　What　security　has　the　public　creditor　that　the　interest　on



the　public　debt；　which　is　now　paid　in　a　medium　depreciated



fifteen　per　cent；　may　not　hereafter　be　paid　in　one　degraded　fifty



per　cent？　The　injury　to　private　creditors　is　not　less　serious。　A



debt　contracted　in　1797　may　now　be　paid　with　eighty…five　per



cent。　of　its　amount；　and　who　shall　say　that　the　depreciation　will



go　no　further？



　　　　The　following　observations　of　Dr　Smith　on　this　subject　are　so



important；　that　I　cannot　but　recommend　them　to　the　serious



attention　of　all　thinking　men。



　　　　〃The　raising　the　denomination　of　the　coin　has　been　the　most



usual　expedient　by　which　a　real　public　bankruptcy　has　been



disguised　und