that their gold and filver can be of little ufe to them; the real, inherent worth of those metals being very fmall, and the country deficient in thofe things which conftitute true and fubftantial riches. In the one cafe, the neceffity of bartering among themselves, is attended with inconvenience in the other, the fcarcity or want of the neceffary articles themselves, excludes, in a great degree, the poffibility of barter, and the use of money, and occafions proportionable diftrefs. Let us now view each of thefe countries as opening a commercial intercourfe with the other, and with foreign nations. The wealthier country, by exporting the fuperfluous quantity of its produce, would be enabled to procure, in return, either gold and filver, or fuch other commodities as it might require, to fupply thofe artificial wants, which refinement of manners may have created. Thus the wealthy ftate might increase its riches. But the poorer country would be obliged to fend abroad its gold and filver, to purchase a fufficiency of thofe articles which its more immediate neceffities might require. Should the quantity of thefe metals, furnished by fuch a country, be only adequate for this purpofe, its inhabitants would certainly continue poor; or if the quantity fhould be fo great as to introduce amongst them, from other countries, not only the neceffaries and conveniencies, but luxuries and the fuperfluities of life; the effect would be a prevalence of ignorance and floth, the parents of wretchednefs. NOTE. "There may be too much money in a nation. And there is certainly too much, if it render the great body of the people idle, and enable them to purchase what they Hence we fee, that the real riches of a nation, do not confift in money; but that they may subsist without it. Commerce and money are fo intimately connected, that, to form a juft idea of either, we fhould confider both. The former, as we have already obferved, originated from the neceffities of mankind; the latter was invented, as an expedient, for conducting the operations of the other with the greater facility, by removing the difficulties and inconveniencies of barter. Commerce, confifting in the continual exchange and mutual transfer of thofe things among men, which their refpective wants, whether natural or artificial, have rendered defirable-and the ufe of money being introduced, as the medium or inftrument by which this was to be effected-it follows, that these two objects should bear a due proportion to each other. The more extenfive the alienation of property is in any country, the greater will be the quantity of money, cæteris paribus, requifite for carrying it on. Hence we may trace the fallacy of that opinion, maintained by fome, that it is immaterial, whether the quantity of money in a nation be NOTE. want from foreigners, without any labour or induftry of their own." Characteristics of the prefent political ftate of Great-Britain. "When money can be obtained in great quantities, by little labour, the flower and better means of obtaining it by manufactures and induftry, will always be neglected. Corruption, with all its dreadful train of ills, immediately follows; the bulk of the people become funk in indolence and mifery, and a few riot in all the excess of diffipation and extravagance." Anderfon's obfevations on national industry. great or small, as the value of all the labour and commodities within it, taken together, muft be equal to the whole fum of its money. Were fuch a nation cut off from all communication with every other, there might be fome truth in the position: but as money is a medium, not only of the internal commerce of every nation feparately confidered; but of their commercial intercourfe, one with another, it is plain that the quantity of this univerfal medium in each country, muft not only bear a certain proportion to the alienation within that country, but the entire quantity therein, muft alfo be in a relative ratio to the quantities in all the other trading countries of the world, between whom there is an intercourse, collectively, compared with the amount of the alienation in them all. A commercial intercourfe between nations, would have a tendency to give to each a quantity of this univerfal medium, proportionate to its thare in fuch negociations. But either the natural advantages, or thofe refulting from political inftitutions, which one country poffeffes above another, deftroy this kind of equilibrium in the commerce of nations, and create that difference, which conflitutes one rich, and another relatively poor. The manner in which this effect may be produced, has been briefly pointed out. As the riches of a country do not abfolutely depend on the quantity of money it poffeffes-but on the extent and productiveness of its lands, the number and industry of its inhabitants, and the plenty and intrinfic value of its natural produce the abundance or fcarcity of thefe, denominate it really rich or poor. And as the alienation and interchanging of thefe real riches of a country, conftitute its trade the utility and indeed neceffity of employing some substance, which may reprefent these riches, as the medium of transfer, demonftrate likewise the neceffity of proportioning that * medium to the degree of alienation, according to the great commercial fcale of price and value. Now as, in the commerce of nations, certain natural and political caufes, either feparate or conjunct, deftroy that equilibrium before fpoken of-and make the balance fo preponderate on one fide or the other, as that fome enjoy the balance of trade in their favour, while others have it against them-the use of coin, as an univerfal medium, is evident, anfwering as an equivalent to make up thofe deficiencies that arife from a wrong balance in the foreign commerce of countries. This, indeed, is the chief preeminence, which gold and filver poffefs, as a circulating medium of trade, over fymbolical money. In many refpects, they are inferior to it. The immenfe quantities of thefe metals †, which are continually procured from the bowels of the earth, and introduced into the dealings of men, under the modification of coin, render them in fome degree, impro. per substances to be the invariable NOTES. * If a nation have a quantity of money equal to its commerce, the lands, commodities, and labour of the people, fhall bear a middle price. This flate is the beft; and tends moft to enrich the people, and make their happiness lafting." Confiderations on a paper-currency, written by the late Tench Francis, efq. attorney-general of Pennfylvania. Sir William Blackfione tells us, that above a thousand millions of bullion are calculated to have been imported into Europe from America, within lefs than three centuries: and the quantity is daily increasing. "No material morey, let it be contrived as it will, is exempted from viciffitudes in its value, as a out the means of alienation, as treafure, in the poffeffion of the mifer, is ufelefs to his neighbour. In both cafes, it is the alienation of the property that contributes to its value. Thus, although the American states comprehend a great and fertile territory, capable of yielding an almost infinite variety of valuable productions, and inhabited by a very large number of enterprising, induftrious people, who poffefs the products of their labour-yet, if deftitute of a circulating medium, which fhould reprefent thefe real riches, the country might with propriety be called poor. But how is this reprefentative value of the real riches of a nation to be obtained by the people, in the first instance? This question opens to us the nature and use of credit. Money being the reprefentative of real value, the poffeffion of it denotes, that the owner had given fome equivalent for it. Therefore, as the acquifition of money must neceffarily be fubfequent to the means of acquiring it, thofe means (which must have confifted of fome of the conftituents of real riches, equivalent to the money) must have been obtained by the aid of a credit. As coin, or real money, as it is fometimes ftyled, is confidered as the representative of actual, co-exiftent value-fo credit may be faid to reprefent anticipated value: and fymbolical or paper-money may be termed the evidence or token of credit: hence this kind of currency is denominated paper-credit, or bills of credit. The obvious ufe of credit is to fupply the place of actual money. It furnishes a mode of conducting the operations of alienation, or commerce, without the immediate intervention ofmoney, or occafion of barter. But being used merely as a substitute for actual money, it should be regulated by the fame fcale: and this evinces the propriety of a state not iffuing a greater fum in paper money, (which is the evidence of credit), than is wanted to fupply the deficiency of its actual money: fo that the amount of its coin and paper-credit might form a fum fufficient for its alienation. If, therefore, thofe things that conftitute real riches, abound in a country where there is little coin, that country will need a large fupply of paper-credit, to reprefent that proportion of its riches, which the difproportionate quantity of its coin could not effect, in order to enable it to carry on an alienation adequate to its riches. As too extenfive a credit muft needs operate in a manner fimilar to the circulation of too much money, the great end to be obtained, with refpect to this point, is, to determine on the beft poffible ftandard for afcertaining the requifite proportion. This may vary in different countries, according to the nature of the commerce and other circumstances peculiar to each. For this reafon, we fhall apply the principle to thefe ftates; to which our enquiries more immediately relate. Money, and confequently credit, being inftrumental to commerce, it fhould be fubfervient to its intereft. The extenfiveness and fertility of the lands in this country, render agriculture * the main fource of its NOTE. "It has always appeared to me," fays mr. Anderfon, "a little furprifing, that mankind fhould have in general entertained fuch juft ideas with regard to the means of making manufactures flourish, and fuch defective notions concerning improvements in agriculture. For there is no man fo ignorant as not to know at once, that the only poffible way to make a manufacture thrive, is to procure a ready vent for the goods: as, without this, every other encouragement, however liberal, must be ineffeftual. And is it not fufficiently obvious, that agriculture, although it wealth. But, as this fund can only be productive, in proportion to the degree of labour employed in drawing forth its riches-and as that labour must also be antecedent to even that hare of its products, which is neceffary to afford the agent the means of exertion, and to fubfift him in the intermediate time-the anticipation required is produced by the inftrumentality of credit. The productions of the earth being effential to the existence of man, make the poffeflion of lands the most valuable fpecies of property: and they are esteemed the beft fecurity for any credit given. The lands of this country may he confidered as our great ftaple, and the culture of them as our principal manufacture +. In this point of view, they may be juftly deemed the best ftandard for determining what amount of a circulating medium the exigencies of the ftate may demand, and its abilities fupport: for the fame reafon, they are the fund on which that fpecies of credit ought to be established, which applies in a manner peculiarly beneficial to the intereft of this country, and fuitable to its circumstances. It will be readily understood, that we here allude to that credit which is furnifhed by a state to the cultivators (or, what is, in America, much the fame, the proprietors) of landed eftates, to enable them, by anticipating the products of feveral years labour, fo to augment induftry, and multiply the means of carrying it on, as to accelerate improvements, and thereby enrich both individuals NOTES. has been diftinguished by another name, is, to every intent and purpose, a manufacture in as ftrict a fenfe of the word, as the forming a yard of broadcloth-and differs not in any refpect from other manufactures, as to the means of making it flourish?" Obfervations on national induftry. + See the foregoing note. and the state. Such a credit is that created by means of a state loanoffice. This is an inftitution fo ad NOTE. * Governor Pownall, a gentleman of extenfive political talents, and well acquainted with the interefts of this country, fpeaks of this inflitution in thefe remarkable words :-"I will venture to say, that there never was a wifer or a better meafere, never one better calculated to serve the ufes of an increafing country, that there never was a measure more fteadily purfued, or more faithfully executed, for forty years together, than the loan-office in Pennfylvania, formed and administered by the affembly of that province." This writer gives a sketch of the loan-office act of Pennfylvania, paffed in the year 1739, which he ftyles the completeft of the kind, containing all the improvements which experience had from time to time fuggested, in the execution of preceding acts." Vide his adminiitration of the colonies." By this act, the trustees of the loan-office were to lend out the bills on real fecurity of at least double the value, for a term of fixteen years, to be repaid back in yearly quotas or inftalments, with intereft. Thus one-fixteenth part of the principal was yearly paid back into the office, which made the payment eafy to the borrower. The intereft was applied to public fervices; the principal, during the first ten years, let out again to fresh borrowers. The new borrowers, from year to year, were to have the money only for the remaining part of the term of fixteen years, repaying by fewer and of course proportionably larger inftalments; and during the last fix years of the fixteen, the fums paid in, were not to be remitted, but the notes burnt and destroyed; fo that at the end of the fixteen years, the whole might be called in and burnt, and the accounts completely fettled. The trustees were taken from all mirably adapted to the circumstances of this country, fo well calculated to relieve its neceflities, founded on fuch found principles of national policy, and the profperous effects of which have been fo fully experienced, that it is indeed much to be wondered, how the people of America remain fo inattentive to the most important intereft of their country, as not to have it established in every state in the union! We are well aware of the prejudices that have been entertained against a paper-currency; and, indeed, the manner in which it was iffued, during the late war, afforded too much grounds for fuch prejudices. But arguments drawn from the abuse of a thing, do not militate against the excellence of the thing itself, or its ufe: and this obfervation will ftrongly apply to the fubject before us. According to the principles before laid down, our circulating medium ought to keep pace with the advancing improvements of the country: yet we know that the balance of our trade with foreign nations is adverse : and, confequently, that the gold and filver-monies of the country must diminifh in the fame degree. Here, then, is the great and direct fource of that diftrefs and embarraffment, which pervade the united states, arifing from the infufficiency of a medium of alienation. While the caufe continues, it is in vain to look for a NOTE. the different counties in the (then) province, their refidence in different parts giving them better opportunities of being acquainted with the value and circumstances of eftates offered in mortgage. They were to continue but four years in office; were to account annually to committees of affembly; and at the expiration of that term, they were to deliver up all monies and fecurities in their hands to their fucceffors, before their bonds, and fecurities could be difcharged, &c. &c.j |