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THE principle of this proposal is to put a new and great capital into circulation, by loans of money, to be created in the manner and upon the foundation described in the following letter, addressed to a member of the late Secret Committee of the House of Commons on Bank Affairs.

The gentleman, to whom the letter was addressed, (whose name, if I thought myself at liberty to mention it, would add much authority to the whole proposal,) being himself struck with the novelty of the measure, and its apparent tendency to public utility, has been the means of procuring a considerable degree of favour to it elsewhere. But, if I were to say more of this, it could only be with a view to obtain attention,-not to influence the public judgment, which alone can decide in this case, as in all others where public credit is concerned.-Therefore, I shall only say, I have good reason to think that the first impressions, made in the quarter to which I allude, are still retained.

It is my intention to point out in a future letter, for which I have prepared materials, how I propose to confine the increase of money, in its first application, to the assistance of the Landed Interest ; and I shall, at the same time, answer such objections as I may hear of, or which my own thoughts may suggest to me; for, I shall disguise nothing.In the mean time, I admit that it is necessary to the practical execution of the plan, that the notes in question should be exchangeable for all commodities,-by no means excepting gold; and exchangeable at par : otherwise they cannot perform the office of money.-I beg permission to add, that I think this may be accomplished. And I shall shew how the security may be. doubled, both in its nature and amount, without lessening the simplicity of the original design; and this to the extent of proving it to be absolutely impossible that the note-creditors should be defrauded, or even disappointed, so long as any notion of law and property shall continue practically to prevail in Great Britain.

London, 23d April 1799.



&c. &c. &c.

SECT. I.-Assumes the Necessity of an Extension of the Circulating Medium.


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 ceasing to make payments in cash. No plan of that kind seems yet to have obtained general approbation; and, perhaps, that which I am about to submit to your consideration may not be free from objection.

I have entered thus upon the subject without ceremony; because, Sir, the indulgence you have shewn me in the several conferences you have honoured me with on the occasion, has superseded the necessity of any introductory matter, unless I had attempted to express the feeling I have of your obliging attention in this instance, which I decline, as a task not easy in itself, and still less so, in connection with other acts of condescension which I cannot fail to recollect, though I am not able to acknowledge them in the manner I should wish to do.


In common with all those who have preceded me in this track, I begin with assuming that there would be found great convenience in the establishment of a good, solid, circulating medium, upon a more enlarged scale than any that exists at present, and adapted to

the extended and extending state of our National Commerce, and particularly to the wants of the landed interest. If this was denied, or generally doubted, I should have little to say at present; for, if the necessity or utility of such an establishment is not self-evident, I should think the time for it is not yet come.

My experience in business, 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 must, from obvious causes, continue to increase so long as the war lasts.

SECT. II.-Basis of a Plan for such an Extension.

HAVING premised this, I proceed to state my plan for the establishment of a New Circalating Medium.

The basis of it, as I have remarked in what you have heard from me already, I fix upon the National Debt, which is the wealth of individuals. For commercial purposes at least, I conceive this may be deemed solid substantial 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.; that is, two hundred millions sterling. This supposition is sufficiently accurate for my present purpose.

SECT. III.-The Plan stated.

Now, my scheme goes to the putting of a large portion, fifty millions, or more, of this property into circulation, if so much could be employed; and this I propose to be done in the following manner :

Let any stock-holder, who would wish to circulate some part of his stock, without selling it, transfer a certain quantity of it, suppose twenty thousand 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 less value respectively; but the whole together to be of the amount of 50007. sterling.

By this means every particular quantity of stock might produce

a fourth part of its nominal amount for the purposes of circulation. For, I make what I believe to be a well-grounded supposition, that the mercantile world, who now take bank-notes in payment, would, with equal confidence, receive and circulate these Stock-Notes ; the governors and directors of the Bank of England being, in respect to the stock to be transferred to them, trustees for those who transfer the stock, and for those who take the stock-notes in payment, (as they now are trustees for the Bank-Proprietors and the holders of bank-notes,) and the security being fully equal to that upon which the credit of bank-notes is founded :-for, the capital and other effects of the Bank (reckoning its property in stock at the present market-rate) is certainly short of twice the amount of its debts. But the stock, transferred as I propose, would be double in value to the notes circulated upon its credit.

In the case I have suggested, the 3 per cents. would be taken at 25; a supposition low enough, I should suppose, for those who give any degree of credit whatever to the public funds. There can be no doubt that bankers and others would allow 100l. stock to be a sufficient security for 251. money, notwithstanding all the possible fluctuations to which the stocks are subject.

The notes I have described might be used for loans or for capitals to trade upon; their use in trade, and for other purposes, being supposed the same as specie or bank-notes.

These notes being, by supposition, of the same value, and passing with the same facility as bank-notes do, will be considered as cash, and consequently, 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 the loan, in like manner as the lender of bank-notes now receives interest on the loan of those notes.

The supposition that these notes would be circulated like banknotes is essential to my plan.-That foundation taken away, the whole would be an unsubstantial vision; and therefore, if this be not assented to, it would be of no use for me to go on. But, that point granted, (subject to re-consideration,) I say that every particular quantity of stock, transferred in the manner I have stated, would yield a profit to the stock-transferrer equal to 5 per cent. on the amount of stock-notes obtained by him.

Twenty thousand pounds, 3 per cent. stock, would, as observed

before, produce 5000l. of stock-notes, the interest of which would be 250l. to be added to 600l., the amount of the dividends on 20,0007. of that stock. Thus 8501. would be gained annually, instead of 600l., by every proprietor of 20,0001. stock, who should avail himself of the opportunity of procuring stock-notes, as above mentioned.

What I have said of 3 per cent. stock, is to be applied to the other public funds in the like proportion; the 3 per cents. being mentioned only by way of example.

SECT. IV. Consequences of the Plan to Stock Proprietors.

I shall pursue the supposition thus made, and shall trace its consequences to the stock-proprietor, treating the matter at present as if no other interest than his was to be consulted; disregarding therefore, at this moment, the interests of Government and the Bank of England, both of which I shall separately consider in what I have farther to say. In this point of view, I suppose the whole dividends on the stock are to continue payable to the stock-transferrers; a supposition to be corrected in the farther progress of this discussion.

8501. being gained annually instead of 600l. the value of stock may be expected to rise in proportion to the increase of gain.

In the subsequent details on this point, I shall suppose the stockproprietor would transfer his stock to the trustees, upon my plan, for the sake of much less advantage than what I have above. described; for, out of the great profit above alluded to, it is necessary to provide inducements to Government and to the Bank of England to countenance the plan.

At present I shall proceed to attend farther to the interests of the stock-proprietor.

What objection can he make? Can he say his stock is tied up up and out of his power? No:-he may redeem it by bringing into the Bank a quantity of stock-notes equal in amount to those originally obtained by him. These being cancelled, his stock would be again entirely free or he may sell the stock subject to the charge upon it this would make it light to hold; which, by rendering the stock more marketable, would increase its value,


Merchants, bankers, country-gentlemen, farmers, and in general

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