'Of Credit good & bad, and of the usefulness of the former' (changed from 'Of Credit good & counterfeit, & of the usefulness of the first & danger of the last')

<631r>

3Of Credit good & counterfeitbad, & of the usefulness of the first & danger of the last. former.

[1]Mr P, (sect 26) tells us that the allowing of paper to pass as money must have ({illeg}& we have found by experience it has had) ye same effect as ye permission of two sorts of coyn one false & little worth little & the other time & valuable. Here he callscompares all paper credit to false money & a little after (sect 27) he adds that paper when it passes for money is as a false coyne. I answer that there are two sorts of {illeg}paper credit, the one good upon the other counterfeit, the first upon good security, the other {illeg} upon more upo credit with it. without it.one good orthe others bad. The good is upon g{illeg}ood security & may be compared to good money The first is good & may mostmost properly be called {illeg}{illeg}d circulatinyg security the other was {illeg} counterfeit the {sic} bad is upon bad security or without any s{illeg}ecurity at all take{illeg}security & may be compared to counterfeit money. {sic}. The first I defend, the other Mr P. opposes. For credit ing {illeg} paper credit or to speak more pap Tis opinion thatpaper security if it be godod is not of ye same intrinsic value with good money. If security upon a Bond or Mortgage or Bill of Exchange or a Bank Bill &c be good, its as good as money. For otherwise no man would part wth his money upon such security. Good security is a phrase for wch signifies security of ye same value with money. For otherwise men would not part with their mo So long as we beleive {sic} it good so long we are content with it in l{illeg}ieu of or mo{illeg}ney & when we {illeg}begin to suspect its goodness we call it or money & givereturn it for {illeg}take in or money & return back ye security. Tis mere opinion that sets a value upon money we value it because with it we can havepurchase all sorts of commodities for it & the same opinion sets a like intrinsic value upon circulatingpaper security. For We value it because with it we ca{illeg}n purchase all sorts of commodities & money too. All the difference is that the value of gold & silver is set upon their internal substance or matter & therefore called intrinsic & that the value of circulating securityof paper credit security upon {illeg}the apparent form of the writing & therefore called extrinsic & that ye value of ye former is more universal then that of ye latter. But if Gold & Silver be preferable to credit theirpaper circulating paper security for their more universal value & circulation then {illeg}for ye same reason good circulating security is preferable to Bonds & Mortgages wch have no circulation. For by circulatingion they areit paper security is rendred more usefull. {sic}. One sort of {illeg} paper credit are Bills of exchange. These are so necessary to Trade {illeg}that without them Trade could not {illeg}be carried on, & their use consists in paying of debts wthout the trouble hazzard & tediousness of sending of money from nation to nation {illeg} place to place. The like is done by Bank Bills Exchequer Bills & other sorts of good paper credit. And this makes such dispatch in business as enlarges Trade exceedingly, as is very plane {sic} by ye great strop put to business & trade at prsentwhich the by ye sinking of paper credit {illeg} a month ago. last Ianuary{illeg} this winter {illeg} put {illeg}to business & trade. Nor of is this desired by Mr P. [2] But he Mr P. tell us that we cannot be certain that plenty of coyn will be obteined by a large trade for unless trade be good as well as great it may happen with a nation as with particular men that are often undone by enlarging their trades too far. I answer that {illeg} The objection lies against Trade as well as against credit & not against either but against the excess of both., If & so makes as much against virtue as against paper credit because the virtue it self by running into extremes become vice If the too much credit & trade by unsafe let us use the have them in a moderate degree.

But he adds thosate the increasing of or trade by more paper will have a natural tendency to enlarge those trades that are carried on by the exportation of or coyn or Bullion, but how it can or will encourage <631v> any trade, that will bring in Bullion (wch are ye trades that are gro{illeg}unded upon ye la{illeg}bour of or people) should be made out before we make any addition to ye paper credit we have.

[3] Mr P. allows that paper credit may be used sometimes as a cordial in cases of necessity but not as constant food & instances reccons the {illeg} first Excheqr Bills issued out in ye late warr to be of this kind & yt it may be convenient upon pressing occasions to make us of ye same method thereafter provided such Bills be issued out upon some {illeg}fund & not for more then ye tax may yeild {sic} & be paid off when ye money comes in. For, s{illeg}aith he, the danger of using paper as money does not arise from ye immediate use of the paper but from ye misapplication of yt deposit & there for that reason he advises that as such paper cannot be discharged finally discharged but by payment of money so coyn so care should be taken to preserve coyn in ye nation for that pi{illeg}ur{illeg}pose. He saith also that {illeg}as such a way of giving a supply to the nation publick may be convenient in cases of necessity so it may be necessary to have a Bank in ye City for ye keeping of money & ye ease of making payment by assignmt, but in no case to allow of Notes & Bills to pass as money unless a pdepositum be secured. And By all this he allows paper credit so far aswherever ye security is good, & so far thus f so far we are {illeg}agreed.I agree with him. But then he seems to doubts w{illeg}hethser any {illeg}paper credit {illeg} be upon good {illeg} security except {illeg} where there depositum is a book in ye City {illeg}or We are also agreedI agree wth him also that where {sic} that where there is no deposition or ye deposition is in danger of being withdrawn the security is not go bad & the paper credit to be condemnedunsafe. {sic} & such paper credit (not good circulating security) I would compare to counterfeit < insertion from f 632r > money & say that it may be used sometimes used as a cordial ins cases of necessity (like the brass money of K. Iames in Ireland) &but is not to be used as constant good. And of such bad security This sort of Credit Paper credit Mr P. seems to understand when he compares it to counterfeit money & says that it is to be used only as a cordial. Thus far there For he speaks of credit where the deposit is in danger of being withdrawn.

So then the dispute against Paper Credit in general is at an end & the Question wch rem{illeg}ains is only about the goodness of the security of the safety of the Deposit on wch this or that sort of Paper credit is ground{illeg}ed.

Credit upon a standing Bank if equal value is allowed to be good

And Credit upon land security is as good

And so is credit upon Parliamentary funds so long as the Government lasts & there is but money enough of our own to pay Taxes. Of this kind are Excheqr bills, Bank of England Bills, Mault Tickets, Million Lottery Tickets, Annuity Tickets &c AndBut this security is weakended by the stocks of Forreigners in those funds. Five millions of money by circulating will pay a debt of 20 millions to or own people, but it will not pay a debt of six millions to Forreigners. Their money is no safe depositum

The credit of particular Merchants is m{illeg}ore apt to fail {illeg}then yt of parliamt unless in Barrs & yet must be tenderly dealt with because of the life of their trade

But Mr P represents &c < text from f 631v resumes >

And so the Question wch remains is only about yt security the goodness of {sic} paper on the several sorts of of paper credit on yt several so{illeg}rts of security.

Credit upon a standing Bank of equal value is allowed to be good.

And Credit upon land security is as good.

And so is credit upon Parliamentary funds so long as yt Government lasts & there is but money enough to pay Taxes. Of this kind are excheqrBills, Bank of England Bills, Mault Tickets, Million lottery Tickets, Annuity Tickets &c † < insertion from the left margin > † The credit of particular merchants is more apt to f{illeg}ail & yet must be tenderly dealt with because the life of their trade.

But Mr P. represents &c

< text from f 631v resumes >

But Mr. P represents that Paper credit encourages only those trades wch export or money & when ye money is gone wch should I credit, & by doing yt {illeg}circulating it instead of money sets money at liberty to be exported & when the money is gone the credit sinks for want of a depositum. I answer that {illeg} paper credit by making great dispatch in business promotes all trades as well good as bad as in manifest by {illeg}th{illeg}e{illeg} stop put to trades this < insertion from f 632r > winter by ye want of it, {sic} < text from f 631v resumes > ; that it promotes ye {illeg} {illeg} bad trades most (that is such as export or money) only by promoting luxury in forreign commodities & p{illeg} if that luxury be checkt (as it may be wthout destroying tradecredit) ye Objection ceases, & its better to check luxury then tradecredit) wch is the life of trade; {illeg}& that Cred Cred paper credit that& ye coynage Act in ye two last reigns notwithstanding this luxury we got brought in much more gold & silver to ye Mint by trade then ever came in before, that by trade alonewas brought in by trade alone before {illeg}& {illeg}that if {illeg} as ye strongest poisons rightly used b duly prepared & applied become the {illeg}best medicines so {illeg}those trades wch we no complain of for exporting or money, if we can but check our own {illeg}luxury in forreign commodities, may like the strongest poisons in {illeg}medicine become the most beneficial to us of any o{illeg}thers by furnishing or neighbours wth those commodities to drain away their money; but if we {illeg}part with paper credit to check those hurtful trades, we check all forreign trade in general & leave the hurtfull trades to or neighbours who when ever we will make us pay dearer for those forreign commodities then or own merchants do, so that we <632r> shall never be able to grow rich hereafter.

I recommended credit for lowering Interest, this {illeg}because low interest is to ye advantage of trade & business: Mr P. replies that ye argumt may be as good for limiting the rates of letting land because the cheapness of provisions may as much encourage trade as the cheapness of provisions. I answer that if provisions be cheap & other commodities dear the husbandlanded man will soon be beggared. Care must be taken of or land & native product as well as of or trade & paper credit is good for both. {illeg}By lowering interest it raises the price of land & furnishes all the busy part of the nation ({illeg}thus ba{illeg}dmen Grasiers {illeg}Artificers Shopkeepers, Merchants) with money at easy rates to carry on their several imployments & is good for every body {illeg}but the{illeg} idle {illeg}Vsurer & them that cannot live but upon ye interest of their money. It may prejudice Orphans who are to live upon the interest of their mone portions, but its good for ye whole nation in general & may enable father to provide better for their children & ye publick is most to be regarded.

The Question about paper credit must no is comparative. The arguments against it must not be considered alone but compared wth ye ar{illeg}gumts for it & judgmt given on ye weightier side.

<632v>

p. 10 {illeg} l. 20 —to p. 12 l 23 against ye circulation of credit.

p 12 l 23 — p 16 l. 2 against more credit.

p 16 l 2 — p 17 l 27 What credit allowable & how long o {sic}

p 17 l 27      p 19 l 9 Care to taken against exporting or coyn.

part. There might be a third or 4th part fit for culling but all Importedrs did not cull & th among ye Guineas of K. Ch. & K. Ia. there are still many weighty {illeg}of full weight notwithstanding the wearing. If I should allow {illeg}a fift part to be culled out & recoyned there would remain 7121952li.{illeg} 15s. 06d. To wch add the Guineas coyned from Decemb 31 1699 {illeg}to              amounting to          & the Lewid'ors & Spanish Pistoles wch are now recconed at a million & an half & the whole gold coyn will be above 8800000li Of wch if we should suppose an quarter of a million hundred thousand pound to have been exported & melted down at home & abroadabroad there wouldwill in Holland & France there will remain above 8$\frac{\mathrm{3}}{\mathrm{4}}$ millions in ye nation besides broad gold. in the nation besides I broad gold & if we I say but 8$\frac{\mathrm{1}}{\mathrm{2}}$ millions as weI did my former paper there will remain a wast of above 300000li to answer s{illeg}mall objections.

[4]{illeg} If any gold hath been bought wth the clippings of silver monies melted down into Ingotts & exported, that 'tis allowed for in my former paper 5$\frac{\mathrm{1}}{\mathrm{2}}$ millions {illeg} wast of ye silver monies

[5]And if any gol the like is to be said of gold brought in by Forreiners {sic} to get by loans upon publick funds &c. For since ye year 17694 we have paid or debts {illeg} deb forreign debts in any thing but gold. And if any suchsuch debts wch now remain unpaid, they are not to be received {illeg} in ye b considered in recconing ye what m quantity of monies now in ye nation, but must be referredallow toaccounted for in ye ballance of trade wch at prsent is on or side.

Mr P. affirms that

All wch being considered I do not see but that ye recconings I set down in my former paper come neare ye truth {illeg}vizt that oin ye year 1689 when we were richest we had or silver monies we had about 12$\frac{\mathrm{3}}{\mathrm{4}}$ millions ofin silver monies (not in tale but standard value) ,& about 5$\frac{\mathrm{1}}{\mathrm{4}}$ millions in Guineas & Pistoles, in all 18 millions besides b broad gold. And in Decem ye year 1700 we had about 7$\frac{\mathrm{1}}{\mathrm{4}}$ millions ofin silver monies milled & hammered & about 8$\frac{\mathrm{1}}{\mathrm{2}}$ million of in Guineas & Pisto{illeg}les besides broad Gold & the Guineas coyned 1700, {sic}, In {illeg}all we had about 15$\frac{\mathrm{3}}{\mathrm{4}}$ millions which is about 2$\frac{\mathrm{1}}{\mathrm{4}}$ millions less then before. {sic}. In making this estimate I do not pretend to be exact. I have used the best of my judgment Where I could meet with exact recconings I foll{illeg}und them & in ye rest I used the best of my judgment. Where I have erred I desire to be convinced by stricter ways of recconing then those wch I have followed used. For the pro Mr P having undertaken to write against Paper credit the proof lies on his side & am ready to submit not to stricter ways of recconing then my own.

All wch is as much as to say that paper may be lower interest but is not a natural way of doing it because it tends to enlarge the bad trades w{illeg}ch export or money & when y{illeg}e money is gone the want of it will advance ye rates of Interest.