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• Errata—vol. III.
• Defence of Usury; Showing the Impolicy of the Present Legal Restraints On the Terms of Pecuniary Bargains; In Letters to a Friend.
• Letter I.: Introduction.
• Letter II.: Reasons For Restraint—prevention of Usury.
• Letter III.: Reasons For Restraint—prevention of Prodigality.
• Letter IV.: Reasons For Restraint—protection of Indigence.
• Letter V.: Reasons For Restraint—protection of Simplicity.
• Letter VI.: Mischiefs of the Anti-usurious Laws.
• Letter VII.: Efficacy of Anti-usurious Laws.
• Letter VIII.: Virtual Usury Allowed.
• Letter IX.: Blackstone Considered.
• Letter X.: Grounds of the Prejudices Against Usury.
• Letter XI.: Compound Interest.
• Letter XII.: Maintenance and Champerty.
• Letter XIII.: To Dr. Smith, On Projects In Arts, &c.
• A Manual of Political Economy: Now First Edited From the Mss. of Jeremy Bentham.
• Chapter I.: Introduction. *
• Chapter II.: Analytical Survey of the Field of Political Economy.
• Chapter III.: Of Wealth.
• Chapter IV.: Of Population.
• Chapter V.: Of Finance.
• Chapter VI.: Operation of a Sinking Fund On the Production of Wealth.
• Chapter VII.: Noscenda.
• Observations On the Restrictive and Prohibitory Commercial System; Especially With a Reference to the Decree of the Spanish Cortes of July 1820.
• Preface.: Observations, &c.
• Section I.: Nature of the Prohibitory System.
• Section II.: Mischiefs of the Prohibitory System.
• Section III.: Causes of the Prohibitory System.
• A Plan For Saving All Trouble and Expense In the Transfer of Stock, and For Enabling the Proprietors to Receive Their Dividends Without Powers of Attorney, Or Attendance At the Bank of England, By the Conversion of Stock Into Note Annuities.
• Introduction.
• Chapter I.: Plan For the Creation, Emission, Payment, and Eventual Extension, of a Proposed New Species of Government Paper, Under the Name of Annuity Notes.
• Chapter II.: Form of an Annuity Note. (see Table II.)
• Chapter III.: Comparison of the Proposed, With the Existing Government Securities, &c.
• Chapter IV.: Grounds of Expectation, In Regard to the Proposed Measure.
• Chapter V.: Financial Advantages.
• Chapter VI.: Advantage By Addition to National Capital.
• Chapter VII.: Advantage By Addition to Commercial Security.
• Chapter VIII.: Particular Interests Concerned.
• Chapter IX.: Rise of Prices—how to Obviate.
• Chapter X.: Reduction of Interest—proposed Mode Compared With Mr. Pelham’s.
• Chapter XI.: Moral Advantages.
• Chapter XII.: Constitutional Advantages.
• Chapter XIII.: Recapitulation and Conclusion.
• Appendix A.: Government Ought to Have the Monopoly of Paper Money, As Well As of Metallic Money.
• Appendix B.: Paper Money—causes Why Not Circulated By Government Without Interest, As Well As By Individuals.
• General View of a Complete Code of Laws.
• Chapter I.: General Division.
• Chapter II.: Relations Between the Laws Concerning Offences, Rights, Obligations, and Services.
• Chapter III.: Relation Between the Penal and Civil Code.
• Chapter IV.: Of Method.
• Chapter V.: Plan of the Penal Code.
• Chapter VI.: Of the Division of Offences.
• Chapter VIII. Titles of the Penal Code.
• Chapter IX.: First General Title of the Civil Code, * of Things.
• Chapter X.: Second General Title of the Civil Code. of Places.
• Chapter XI.: Third General Title of the Civil Code. of Times.
• Chapter XII.: Fourth General Title of the Civil Code. of Services.
• Chapter XIII.: Fifth General Title of the Civil Code. of Obligations.
• Chapter XIV.: Sixth General Title of the Civil Code. of Rights.
• Chapter XV.: Seventh General Title of the Civil Code. of Collative and Ablative Events.
• Chapter XVI.: Eighth General Title of the Civil Code. of Contracts.
• Chapter XVII.: Ninth General Title of the Civil Code. of the Domestic and Civil States.
• Chapter XVIII.: Tenth General Title of the Civil Code. of Persons Capable of Acquiring and of Contracting.
• Chapter XIX.: Of the Particular Titles of the Civil Code.
• Chapter XX.: Of Elementary Political Powers.
• Chapter XXI.: Of Elementary Political Powers— Subject Continued.
• Chapter XXII.: Plan of the Political Code.
• Chapter XXIII.: Plan of the International Code.
• Chapter XXIV.: Plan of the Maritime Code.
• Chapter XXV.: Plan of the Military Code.
• Chapter XXVI.: Plan of the Ecclesiastical Code.
• Chapter XXVII.: Plan of Remuneratory Laws.
• Chapter XXVIII.: Of Political Economy.
• Chapter XXIX.: Plan of the Financial Code.
• Chapter XXX.: Plan of Procedure Code.
• Chapter XXXI.: Of the Integrality of the Code of Laws.
• Chapter XXXII.: Of Purity In the Composition of a Code of Laws.
• Chapter XXXIII.: Of the Style of the Laws.
• Chapter XXXIV.: Of the Interpretation, Conservation, and Improvement of a Code.
• Pannomial Fragments.
• Chapter I.: General Observations.
• Chapter II.: Consideranda.
• Chapter III.: Expositions.
• Chapter IV.: Axioms.
• Nomography; Or the Art of Inditing Laws: Now First Published From the Mss. of Jeremy Bentham.
• Chapter I.: The Subject Stated.
• Chapter II.: Relations.
• Chapter III.: Proper End In View.
• Chapter IV.: Imperfections Primary.
• Chapter V.: Explanations Relative to the Imperfections of the Second Order.
• Chapter VI.: Of Remedies. *
• Chapter VII.: Of Language.
• Chapter VIII.: Of the Perfections of Which the Legislative Style Is Susceptible.
• Chapter IX.: Of Forms of Enactment.
• Appendix. Logical Arrangements, Or Instruments of Invention and Discovery
• Equity Dispatch Court Proposal; Containing a Plan For the Speedy and Unexpensive Termination of the Suits Now Depending In Equity Courts. With the Form of a Petition, and Some Account of a Proposed Bill For That Purpose
• Section I.: Purpose Explained. Jeremy Bentham to the Honest and Afflicted Among Equity Suitors.
• Section II.: Equity Suitors’ Petition For Dispatch Court. to the King’s Most Excellent Majesty, —
• Section III.: Dispatch Court Bill—some Account of It.
• Section IV.: Information Requisite From Petitioning Suitors.
• Equity Dispatch Court Bill: Being a Bill For the Institution of an Experimental Judicatory Under the Name of the Court of Dispatch, For Exemplifying In Practice the Manner In Which the Proposed Summary May Be Substituted to the So Called Regular Sy
• Editor’s Note.
• Preface.
• Preamble.
• Part I.—: Judiciary.
• Section I.: Judge Located, How.
• Section II.: Remuneration.
• Section III.: Registrar, &c.
• Section IV.: Eleemosynary Advocate.
• Section V.: Judges’, &c. Deputes.
• Section VI.: Judge’s Powers—exemptions—checks.
• Section VII.: Prehensors and Messengers.
• Section VIII.: Consignees; * Or Say, In-trust-holders.
• Section IX.: Grounds of Decision For the Dispatch Court Judge.
• Section X. ‡: Suits’ Comparative Suitableness; and Order of Cognizance.
• Section XI.: Auxiliary Judges and Accountants.
• Section XII.: Sittings, Times Of.
• Part II.—: Procedure.
• Section XIII.: Definitions. *
• Section XIV.: Examination of Solicitors.
• Section XV.: Initiatory Examination of Parties, &c.
• Section XVI.: Appropriate Intercourse, Constant and Universal, Secured.
• Section XVII.: Mutual Security For Forthcomingness of Persons and Things. ‡
• Section XVIII.: Evidence-procuring Money, How Provided.
• Section XIX.: Subsequential Evidence, How Elicited.
• Section XX.: Execution, How Performed.
• Section XXI.: Equity Court Costs, How Disposed Of.
• Section XXII.: Dispatch Court Costs, How Disposed Of.
• Section XXIII.: Eventual Retrotransference of a Suit to the Equity Court.
• Section XXIV.: Expense of the Court, How Provided For.
• Supplemental Sections:—
• Section I. Or XXV.: Bankruptcy and Insolvency.
• Section II. Or XXVI.: Henceforward Dispatch Court.
• Schedules to the Bill.
• Plan of Parliamentary Reform, In the Form of a Catechism, With Reasons For Each Article: With an Introduction, Showing the Necessity of Radical, and the Inadequacy of Moderate, Reform.
• Introduction.
• Section I.: History of the Ensuing Tract—alarming State of the Country and the Constitution.
• Section II.: Most Prominent Present Grievance, Gareisoning France.
• Section III.: Causes of the Above and All Other Mischiefs:—particular Interests Monarchical and Aristocratical, Adverse to the Universal—their Ascendency.
• Section IV.: Sole Remedy In Principle—democratic Ascendency.
• Section V.: Remedy In Detail: Radical Parliamentary Reform: Elementary Arrangements In This Edition of It—their Necessity.
• Section VI.: Differences Between This and the Original Editions of Radical Reform.
• Section VII.: Virtual Universality of Suffrage Further Considered.
• Section VIII.: Virtual Universality of Suffrage—its Undangerousness.
• Section IX.: Freedom of Suffrage Further Explained—seductive Influence—its Forms, Instruments, &c.
• Section X.: Bribery and Terrorism Compared.
• Section XI.: Purchase of Seats—in What Cases Mischievous—in What Beneficial.
• Section XII.: Secresy of Suffrage—its Importance Further Developed.
• Section XIII.: Exclusion of Placemen, &c. From the Right of Voting—mischievousness and Profligacy of the Opposite Arrangement.
• Section XIV.: Universal Constancy of Attendance—its Importance.
• Section XV.: Representatives—impermanence of Their Situation—its Importance:—objections—their Groundlessness.
• Section XVI.: Moderate Reform—its Arrangements—their Inadequacy.
• Section XVII.: Trienniality Inadequate;—annuality Necessary.
• Section XVIII.: Interests Adverse to Adequate Reform—support Given By Them to Moderate, to the Exclusion of Radical: Tories—whigs—people’s Men.
• Catechism of Parliamentary Reform; Or, Outline of a Plan of Parliamentary Reform; In the Form of Question and Answer; With Reasons to Each Article.
• Section I.: Ends to Be Aimed At On the Occasion of Parliamentary Reform.
• Section II.: Means, Conducive Towards These Ends.
• Section III.: Means—their Uses, With Reference to Their Respective Ends.
• Section IV.: Means Conducive to Aptitude In Members: I. Placemen Not to Vote, Nor to Be Seated By Election.
• Section V.: Means, &c. Continued.—ii. Placemen Seated By the King, With Speech and Motion, Without Vote.
• Section VI.: Means, &c. Continued.—iii. Elections Frequent—annual.
• Section VII.: Means, &c. Continued.—iv. Speeches Authentically and Promptly Published.
• Section VIII.: Means, &c. Continued.—v. Attendance, Punctual and General, Secured.
• Section IX.: Inconveniences Incident to Elections, and Election Judicature.
• Section X.: Election Inconveniences—means For Their Removal.
• Section XI.: Collateral Advantages, Referable to the Situations of Electors, Placemen, Lords, &c.
• A Sketch of the Various Proposals For a Constitutional Reform In the Representation of the People, Introduced Into the Parliament of Great Britain, From 1770 to 1812.
• Radical Reform Bill, With Extracts From the Reasons.
• Preliminary Explanations.
• Title of the Proposed Act.
• Preamble.
• Section 1.—: Seats and Districts.
• Section 2.—: Electors, Who.
• Section 3.—: Eligible, Who.
• Section 4.—: Election Offices.
• Section 5.: Election Apparatus.
• Section 6.—: Promulgation of Recommendations In Favour of Proposed Members.
• Section 7.—: Voters’ Titles Pre-established.
• Section 8.—: Election, How.
• Section 9.: Election Districts and Polling Districts, How Marked Out.
• Section 10.—: Vote-making Habitations, How Defined.
• Section 11.—: Members’ Continuance.
• Section 12.—: Vacancies Supplied.
• Section 13.—: Security For the House Against Disturbance By Members. †
• Section 14.—: Indisposition of Speakers Obviated.
• Appendix, Including General Explanations.
• Radicalism Not Dangerous. Extracted From the Mss. of Jeremy Bentham. *
• Part I.—: Introduction.
• Section I.: Radical Reform Bill Recapitulated.
• Section II.: Persuasion of the Dangerousness of Radicalism—cause of It, and of the Vituperative Expression Given to It.
• Section III.: Terms of the Accusation,—speeches From the Throne, 16 Th July and 21 St November 1819.
• Section IV.: The Accusation In General Terms—counter-averment.
• Section V.: Plan of This Defence.
• Part II.—: Deference From the General Nature of the Case.
• Section I.: Conditions Necessary to a Man’s Embarking In Such a Design.
• Section VII.: Concurrence In Any Other Extensive Plan of Spoliation Impossible.
• Section VIII.: Concurrence of Any Constituted Authorities Impossible.
• Section IX.: Accomplishment Impossible—design Impossible.
• Section X.: The Talked-of Spunge No Proof of the Design.
• Part III.—: Defence From Experience In the Case of the United States.
• Part IV.: Defence From Particular Experience In the Case of Ireland: Years 1777 Or 1778, to 1783.
• Section I.: Analogy Between This and the Previous Case.
• Section II.: Democratic Ascendency, How Produced.
• Section III.: Fruit of Democratic Ascendency a Golden Age.
• Section IV.: Coincidence of Its Characters With Those of Radicalism.
• Section VI.: Extinction of Democratic Ascendency and Reform—restoration of Monarchico-aristocratical Ascendency, and Its Consequences.
• Conclusion.

CHAPTER I.

PLAN FOR THE CREATION, EMISSION, PAYMENT, AND EVENTUAL EXTENSION, OF A PROPOSED NEW SPECIES OF GOVERNMENT PAPER, UNDER THE NAME OF ANNUITY NOTES.

§ 1.

Creation, Emission, and Payment.

Art. 1. That there be issued from his Majesty’s exchequer, in whatever quantity[1.] it shall be applied for by purchasers, on the conditions hereinafter mentioned, through the medium of such local or sub-offices as are hereinafter mentioned, and the interest or dividends paid in such manner as is also hereinafter mentioned, a competent number of transferable promissory notes, to be termed annuity notes; importing, each of them, the grant of a perpetual redeemable annuity, payable to the purchaser or other holder of the note, in consideration of the principal sum, on the repayment of which such annuity is made redeemable, and which accordingly constitutes the denominative value or principal of such note; such interest to be paid half-yearly,[2.] immediately after the expiration of each half-year.

TABLE I.

TABLE OF A PROPOSED ANNUITY-NOTE CURRENCY;

Exhibiting divers particulars relative to a proposed series of Notes, carrying the same rate of Interest, and having for their values sums rising one above another in a series of terms, 19 in number with 2 for their common measure; of which magnitudes more or fewer may be employed as may be found convenient. Also another corresponding series of principal sums, which (they being raised in their amounts, while the corresponding amounts of interest continue unchanged) give an inferior or reduced rate of Interest, with reference to the series first mentioned. The sums proposed are in columns V. VI. VII. VIII. IX. X. XIII.;—those used for illustration, in columns I. II. III. IV. XI. and XII.

Art. 2. That the interest be in such sums as to be capable of being computed daily, as in the case of exchequer bills. That the daily interest allowed upon the standard note (so termed with reference to any smaller or larger notes that may come eventually to be added to the circulation upon the same principle) be a farthing;[3] —and that the principal or denominative value of such standard note be £12 : 16s; and that the interest, in order to afford a profit to government, be inferior to the current rate borne by government annuities at the opening of the issue, say £3 per cent. nearly[4] —a small sum being added to the principal sum, corresponding precisely to that rate, for the sake of making the sums the more even, especially at the bottom of the scale.[5]

Art. 3. That each note contain, on the face or back of it, a table, whereby the value of it, as increased by daily interest, may be seen for every day in the year, by inspection, without calculation; also a table, whereby in case of forbearance[6] to receive the interest, the value of a note of that magnitude, as increased by daily interest, added to yearly interest so forborne to be received, may be seen, for any number of years, by a single addition; together with an indication, by means of which it may be seen (also by simple inspection) for what number of years, if any, the interest on the particular note in question continues unreceived.

Art. 4. That the interest on each note, whenever issued, commence on the first day of each year of our Lord; and that, on notes issued on the several days after such first day, the interest to the day of issue be added to the purchase money.[7]

Art. 5. That no such annuities be ever issued at a less price,[8] (i. e. so as to bear a greater rate of interest) than the first issue, and accordingly, that as often as any money comes to be raised at a higher rate of interest by perpetual annuities, it shall be by the creation of stock annuities, &c. as at present; and that a clause to this effect be a fundamental article in the contract made with the purchasers on the part of government, and be inserted accordingly in the tenor of the note.

Art. 6. That, at that price, the issue be kept open, so long as any of the redeemable stock annuities existing at the commencement of the issue, continue unredeemed, and no longer; and that this be another such fundamental article. (See Art. 20.)

Art. 7. That no such note annuity be paid off till the whole mass of stock annuities existing at the commencement of the issue, or created subsequently, shall have been paid off,[9] and that this be another such article.

Art. 8. That for every £3 a-year annuity thus created, an equal portion of stock annuities be forthwith bought in and extinguished within a time to be limited; and that this be another such article.

Art. 9. That the profit resulting from the difference between the price at which each such annuity shall have been sold, and the price at which an equal mass of annuity shall have been bought in, be carried to the sinking fund, subject to such other dispositions, if any, as from time to time may be thought fit to be made by parliament with respect to a predetermined portion or portions of it.

Art. 10. That, at the outset, no other note be issued than the standard note (£12 : 16s.) with the half, or with the half and quarter of it.

Art. 11. That, by degrees, the series of notes be extended downwards, each successive note being the half of the one immediately preceding it (with or without the omission of any term or terms in such descending series) until it has descended to the lowest piece of silver coin in common currency, viz. a sixpence; and that it be then considered whether to give it a further extension downwards, viz. to the level of the copper coinage.[10]

Art. 12. That the notes having for their respective values, sums not exceeding the largest silver coin in use (viz. 5s.) be distinguished by the appellation of silver notes, all above being for the same purpose termed gold notes; and that to facilitate the discrimination, a corresponding peculiarity of colour be given to the gold notes.

Art. 13. That, moreover, as convenience may suggest, the series be extended to a correspondent length, or otherwise upwards;[11] in which case the series will, if complete, consist of nine terms below the standard note, and as many above it—total, nineteen; having two for their common difference: values as by the annexed table.

Art. 14. That when the credit of this paper has been established, or even from the first, notes already taken out by individuals be received (as bank-notes are at present) at the several government offices[12] in the country as well as in the town, and re-issued from thence in the way of circulation, as they would be between individual and individual, charged with the intervening interest, to as many as may think proper to receive them at that value.

Art. 15. That the offices from whence the proposed paper is issued to the purchasers, be, in the first instance, the several local post-offices[13] in town and country, with the eventual addition of any of the other local government offices (such as the stamp and excise offices,) or in case of need, other offices to be established for the purpose, in such situations and numbers as may be found necessary.

Art. 16. That to save trouble in the issue of the smaller notes, especially the silver notes, government reserves to itself the power of fixing the least quantity[14] of annuity-note money, which an individual shall be allowed to take out at once; as also to prescribe the composition of that quantity, taking care to leave to the customer the choice of the composition, as far as it may be a matter of indifference to government.

Art. 17. That powers be given to the king in council, or to the treasury, from time to time to declare, whether any and what fee, not exceeding a certain amount, shall be paid by the purchaser, on the emission of each note or parcel of notes constitutive of such or such a sum; as also on the exchange of an old note for a fresh note, at the instance of the holder—regard being had in both cases to the magnitude of the sum constituting the value of the note or mass of notes; as also to call in at any time any such note or notes, so it be without expense to the holder, for the purpose of their being examined or exchanged; and, by suspension of interest, or other penalties, to enforce obedience to such calls; as also to declare whether any and what fee shall be paid by the holder on the receipt of the interest due on each note or parcel of notes.[15]

Art. 18. That periodical accounts be published of the progress of the issue,[16] as regularly, and circulated as extensively, as the prices of stocks are at present, under heads expressive of the day, the place, the number of notes of each magnitude, and the total amount issued on each day at each place; together with the increase or decrease of the amount, as compared with former periods; and any such other particulars as may be of use.

§ 2.

Eventual Extension.

Art. 19. That if, by this and other means, three per cent. stock annuities should ever have risen to par, the produce of the issue of note annuities be thereupon applied to the paying off, instead of buying in stock annuities; and so toties quoties, buying in whenever they are under par, paying off whenever they are at or above par.

Art. 20. That inasmuch as the paying off stock annuities, the greatest part thereof carrying three per cent., will lead to a rapid and almost simultaneous conversion[17] of the whole amount thereof into note annuities, bearing nearly the same rate of interest;—and inasmuch as, upon the redemption of the last parcel of redeemable stock annuities, the emission of note annuities at this rate of interest must (according to article 6) immediately cease;—and inasmuch as the mass of government annuities will in the meantime have already been much reduced, and by the continued operation of the continually increasing powers of the existing sinking funds, the scarcity will be growing greater and greater every day (notwithstanding that, being continually exposed to be paid off at par, they will be incapable of bearing any considerable premium) the offices be opened thereupon for the emission of a second issue, at a reduced rate of interest, say £2 : 7 : 5—i. e. 2⅜ per cent. nearly—(viz. by raising the price of the standard note from £12 : 16s. to £16;)—the produce of such second issue to be applied to the paying off the notes of the first issue, and the second issue to close as soon as the redemption of the notes of the first issue shall have been completed.

Art. 21. That the amount of all interest saved, as well by the redemption of stock annuities redeemed by the produce of the existing or other future funds (and, therefore, without the preparatory emission of a mass of annuity-note paper to the corresponding value) as by the progress made in the reduction of the rate of interest in the way just mentioned (viz. by the preparatory emission of a mass of annuity-note paper, at a lower rate of interest, followed by the redemption of a correspondent mass of stock annuities, or note annuities, at the higher rate,) be carried (immediately) to the sinking funds—on the principle of the provision made, in the like behalf, in and by the existing act (viz. the New Sinking Fund Act, 32 Geo. III. c. 32, § 2.)

Art. 22. That, immediately upon the redemption of the last parcel of note annuities of the first issue, the offices he again opened for the emission of a third issue at the next lowest rate of interest suitable to the nature of note annuities on which interest is computed daily, say £1 : 9 : 6—i. e. 1½ per cent. nearly[18] ;—viz. by raising the price of the standard note from £16 to £25 : 4s.;—the produce of such third issue to be appropriated to the redemption of the note annuities of the second issue as above: with like provision as above in favour of the sinking funds: and so toties quoties, in so far as any such farther reduction may be deemed eligible.

Art. 23. That inasmuch as, so long as any portion of the redeemable annuities remain unextinguished, there may remain two parcels of annuity-note paper, bearing two different rates of interest—the higher closed, the other open—provision be made, that in case of the creation of any portion of capital in stock annuities, at any time thereafter, by reason of money borrowed for the support of a war or otherwise, powers be given for extending the issue of note annuities to the extent of the capital so created, and at the rate of interest the then last or open issue of note annuities shall receive.

[[1.] ]Art. 1. (In whatever quantity.) The money thus raised being appropriated to the redemption of stock annuities, when that redemption is completed, the emission will cease, by articles 6 and 20; and, subject to that limitation, the more copious the emission, the more profitable the measure.

As to the mode of limiting, in cases of necessity, the portion producing the effect of money in the circulation, see note to Art. 16, and Ch. IX. Rise of Prices.

[[2.] ]Art. 1. (Half-yearly.) Yearly would be more simple (as may be seen in the form exhibited for that purpose in Table II.) as well as more profitable to government; but being unconformable to the established usage, it would be apt to strike the customer as a great drawback from the value, stand in the way of the profit expected as under mentioned, by forbearance on the part of note-holders to receive the interest (see Ch. V.) and would be in a manner destructive of the advantage obtainable in the way of compound interest by persons keeping the paper in hand, as stock is kept in hand, for that purpose.

[[3] ]Art. 2. (A farthing.) By taking, for the standard note, a principal sum, having for the amount of its daily interest, at the proposed rate of interest, an even sum (i. e. a sum having an existing piece of coined money or number of pieces of coined money, corresponding to it,) the multiples of this standard note will in like manner have even sums for the respective amounts of their daily interest, and their aliquot parts will have for their amounts of interest, sums capable, when put together, of being made up into even sums.

Here, as in Exchequer bills, the interest is computed daily, that each note may receive from each day a determinate addition to its value, and may pass accordingly in circulation.

The smallest of all notes possessing this property is taken for the standard note, because the smaller a note, the greater the number of persons that are capable of becoming customers for it.a

The standard note being scarcely small enough in this view, it were better, perhaps, that not only the half, but the quarter of it should be issued at the same time.

The larger notes will serve to protect the smaller ones from the contempt which might otherwise attach upon them, by reason of the smallness of the daily, and even weekly, amount of interest.

[[4] ]Art. 2. (3 per cent.) For the reason why no higher rate of interest could be allowed with profit on a series of notes carrying daily interest, nor any lower above 2⅜ per cent., which in the first instance might be too low, see Currency Table, note m.

[[5] ]Art. 2. (Bottom of the scale.) See Currency Table.

[[6] ]Art. 2. (Forbearance.) See Currency Table. On a note which passes on from hand to hand, any number of years may elapse before the interest on it is received from government; since the interest may be received by each holder with less trouble from the individual to whom he passes it. Hence one source of the profit to government (see Chap. V.) It is only where a man keeps a note in his hands as a source of income, that the interest of it will be applied for at the offices. In fact, it is only in the case where a man means to hoard up at compound interest, that it will be necessary for him to receive the interest upon his paper from government; inasmuch as, without trenching upon the principal, he may spend the income from his notes, by passing off a proportion to that amount, keeping in hand the rest.

[[7] ]Art. 4. (Interest added.) Upon all notes of the same denomination, interest must commence upon the same day (say the first day of the half year,) otherwise 365 notes of the same denomination might be of so many different values: and if interest is to commence on that day, a purchaser in the way of issue must pay for the note accordingly; otherwise customers would be apt to delay taking out their notes till the last moment; keeping their money in their pockets, or employing it in other ways in the meantime; and then they would pour in, all at once, in crowds too great to be served.

[[8] ]Art. 5. (At a less price.) Want of security against depreciation has hitherto been the bane of government currencies, and is among the reasons why banker’s paper, yielding a low interest, is taken, notwithstanding the existence of a government currency (exchequer bills) yielding a higher interest. Government must, it is true, have the money it wants upon any terms; but so long as it reserves to itself the faculty of selling any one species of annuities (ex. gr. the existing stock annuities) in a quantity commensurate to the amount of the money it wants, at the times price, it may refuse to sell any other (such as the proposed note annuities) under a fixed price. As anybody may have as much of these annuities as he will at par, nobody will ever give more; and as no more can ever be sold than is applied for, and the demand for these annuities will increase as the mass of existing stock annuities comes to be redeemed, by the money raised by the sale of these note annuities, backed by the money from so many other funds, no man need ever part with them at a less price; since, by taking an annuity note in the way of circulation, a man will save the trouble of going to the office for it, and taking it out in the way of issue, not to speak of the small fee which it may be necessary to require. (See Art 17, and Chap. IV.)

[[9] ]Art. 7. (Paid off.) By an assurance to this effect, nothing can ever be lost to government; because, so far from profit, while an annuity to the amount of £3 a-year can be paid off by £100, an annuity to no more than £2 : 19s, a-year can never be paid off but to a loss: and it will be no small recommendation, especially when, by the operation (as will be seen) of this measure, the complete redemption of the existing mass of annuities has been brought to view. (See Chap. V. § 2.)

[[10] ]Art. 11. This, if not stopped by the expense (which increases with the number and not with the value of the notes,) would be attended with several advantages.

1. The copper notes, the receiving of interest upon them being attended with a degree of trouble, in proportion to the number requisite to produce a principal yielding a mass of interest worth regarding, would stay in the circulation, and by lessening pro tanto the amount of the supply capable of meeting the demands of those who want their paper to hoard for the purpose of income, it would increase the scarcity of the paper of the first issue, and render customers the more willing to accept a second issue at a reduced rate of interest.

2. The profit by forbearance to receive the interest (see Chap. V.) would take place upon the whole of this branch of the currency.

3. The proposed paper, being so effectually guarded (as will be seen) against forgery (see Explanations to the Form of an Annuity Note,) and the copper coinage so much exposed to that crime, notwithstanding all the exertions that have been made to rescue it, the saving to the public, especially to the inferior and more numerous classes, on this score, would be a matter of considerable and almost universal accommodation;—and,

4. The saving to government, by the diminution of the expense of renewing the copper and other coinage, would be proportionably considerable.

How far the expense would be capable of being paid for by the profit, would be learned by experience from the silver notes.

The minuteness of the small notes would be protected from contempt by their relation to the large ones; and to go in change for one another, they must, all of them (even copper not excepted,) bear an interest, and the same rate of interest.

A reason for making the extension gradual, may be to avoid perplexing the public mind with a multiplicity of notes of different values, before it has been familiarized with any of them. But, at the worst, the magnitudes would be little, if anything, more numerous than in the case of bank-notes.

[[11] ]Art. 13. (Upwards.) The time for issuing large notes, i. e. notes of the magnitude of the smallest exchequer bills and upwards (in a word, all annuity notes above the £50 : 8s. notes,) will not arrive till after stock 3 per cents. are at par; for, till then, exchequer bills, yielding more interest, will draw off from the proposed annuity notes all customers whose quantum of money capable of being kept in hand extends to such a purchase; unless possibly in the remote parts of the country, where exchequer bills are unknown, or not in use.

[[12] ]Art. 14. (Received at government offices.) Were this to be done from the first, a great lift would certainly be given to the proposed currency at once: the only objection seems to be, the possibility lest, in case of any sudden turn taken against it by the public mind, the exchequer should for a time be overloaded with it, i. e. labour under a deficit of cash (the only money that nobody can refuse) to the amount of it. But in Chapter IV. the improbability of such an event, and at the same time an effectual remedy, is pointed out.

Supposing bank-notes to be driven out of the circulation,a the same sort of necessity, or supposed necessity, which gives employment to bank paper in the transactions of governmentb and in other transactions upon a large scale, in preference to cash, to save counting, examining, and luggage, would create an equal demand for the annuity note paper on that score.

[[13] ]Art. 15. (Post-offices.) Dispatch, punctuality, cheapness in the transaction of the business, sufficiency of number, and equality of distribution in regard to the stations, forming the characteristics of the post-office establishment, as compared with all other provincially-diffused official establishments. These form the properest stations for the transaction of the business, as well as the properest, or rather only proper, standard for the mode of conducting it. In the London penny post-offices, deliveries of letters six in a day; therefore once every day cannot be too often for deliveries of packets of annuity notes. Six times a-day go letters, some of them with money in them; therefore once in a day cannot be too often for money to go without the letters.

The oftener the receiver’s hands are emptied of the principal money, the less the degree of pecuniary responsibility that need be required of him: few of the existing post-offices, town or country, that may not be trusted with a day’s stock (say £200 or £300) at a time (more in some places, according to the opulence and populousness of the spot;) many whom it would not be prudent to trust with a month’s stock, say thirty times that amount.

This public money being required to be kept unmixed with any other monies, and in a government package, and the officer declared to be a “servant” of government,—in respect of its deficiency, otherwise than from accident, he might be treated on the footing of embezzlement;—capital felony in case of absconding; single otherwise.

In the penny post-office, one-tenth of a penny is the pay in respect of each letter, for marking each with two stamps; besides the trouble of examining and receiving the money, and occasionally of giving change, in the case of those letters with which money is paid.

The proper quantum of pay is in all cases the least that will be accepted by a person competent to the business; such cases only excepted in which, from the nature of the service, the value of it is capable of being raised to an indefinitely increasing pitch of excellence by extraordinary exertions.

With this exception, quantity of trouble, not value of the subject-matter, any otherwise than with a view to pecuniary responsibility, is the proper standard and efficient cause of demand for pay. Poundage, considered as a mode of remuneration, is therefore very apt to be disproportionate and excessive.

On a letter, for which no more than a penny is received—out of which penny the expense of conveyance must be defrayed, as well as a portion of the expense of general superintendence, and a profit made—10 per cent. for the trouble of receiving it, is at the same time almost as little as can be given, and yet (though in this case no more than the tenth part of a penny) as much as requires to be given. For receiving the price of a set of stamps, some of them as high as several pounds a-piece, the same poundage would be acknowledged to be excessive.

If the trouble attending the issuing of an annuity note (the filling up the blanks, and examining and taking care of the purchase money) were no greater than that of receiving a penny-post LETTER (allowance made for the proportion on which money is received, and the requisite extra trouble taken,) experience shows that the tenth part of a penny would be a sufficient recompense: but the trouble would be in a considerable degree greater—perhaps three, four, or five times as great:—therefore so, it would be necessary, should the pay. A halfpenny might in this way be necessary, and at the same time sufficient, in the case of the standard note of £12 : 16s.; and upon a note of this magnitude, not only a halfpenny, but several pence, might perhaps (as will be seen in Art. 17,) without much inconvenience be thus imposed; and thus, as far as notes of that magnitude were concerned, the expense of management at the local offices might be thrown upon the individuals—the purchasers. But though a purchaser might not grudge a few pence for the profit to be made in the way of interest upon a £12 : 16s. note, he certainly would not give so much as a halfpenny for the profit to be made upon a sixpenny note, as it would be three or four years before the interest would have reimbursed the fee thus advanced. In notes that were to a certain degree below the standard note (say in the £3 : 4s. or £1 : 12s. notes,) it would be necessary that the fee upon each, though not remitted altogether, should be reduced below the amount of the lowest coin,—a farthing; which would be the case, if notes under the £3 : 4s. note, for instance, were not to be taken out but in parcels, and a halfpenny or a farthing were the fee upon each parcel; in which case it would be necessary that government should make up the difference. This it would be well worth its while to do, even upon the copper notes; since, in Yorkshire, according to Adam Smith, before the restriction on small notes, sixpenny notes were issued by individuals in abundance.

As to the general annuity note office,—having no intercourse with individual customers, nor with the local office-keepers but by letter, the nature of the business admits of its being conducted with perfect regularity, and upon a plan extremely simple. (See Chap. V. § 2, Profit in respect of management.)

[[14] ]Art. 16. (Least quantity.a ) A note under this amount would consequently not be capable of being taken out singly, but only as one in a parcel, with other notes of the same or different magnitudes. So also, perhaps, in regard to the carrying in notes to the local office to be sent up to the general office, to be returned from thence with the interest; as likewise in regard to the changing large for small notes, or vice versá, or injured notes for fresh ones. But instead of a prohibition, as above, the same end might be answered, perhaps more advantageously, in some, at least, of the above instances, by a small fee, acting as a penalty to the amount of it, as by the next article.

By this means, the offices would be kept clear of the most troublesome, as well as numerous, class of customers. Silver notes, for example, would in that case be taken out, not singly by journeymen manufacturers, but in parcels by masters, by whom at pay-day they would be distributed among their journeymen.

Interest would by this means be capable of being received at the offices upon the smallest notes (which, as above, is necessary to their passing in change for large ones;) though what is probable is, that on the small it will scarcely ever be demanded. (See on this head, Chap. V. Profit by interest undemanded.)

What is the least note that can be issued with profit, will be determined by the quantity of time occupied in the operations necessary to the issue of it. Possibly on this account, in the silver, or at least in the copper notes (if any,) the actual signature of the local office-keeper might be dispensed with, and a stamp of some kind (affixed at the time of issue at his office, or previously at the general office) be employed in its stead.

In this power is included that of suspending the issue of notes of any particular magnitude or magnitudes; by which means, in case of an inordinate demand for the proposed paper (viz. such an one as shall threaten to swell to a pernicious magnitude the quantity of it producing the effect of money in the circulation,) a stop may be put at any time to the inconvenience. (See Ch. IX. Rise of Prices.)

[[15] ]Art. 17. (Emission, exchange, or payment of interest.) Imposing, after the opening of the office, the minutest fee on any of these occasions, would be a breach of engagement, and moreover, if otherwise than by authority of parliament, an invasion of parliamentary rights.

In regard to the fixation of the amount, no harm could result from allowing to the executive government a moderate latitude; such as from a farthing to sixpence on the standard note of £12 : 16s.; and room would thus be allowed for following the dictates of convenience, as indicated by experience. Without being so great as to check the issue, the fee might perhaps be made to favour the circulation. In the circulation it might produce a premium, the maximum of which would be the amount of the fee.

The progress of the issue being known everywhere, it is scarcely possible that, in one and the same place, this paper should be meeting with customers in the way of issue, and at the same time meet with refusals in the way of circulation; the trouble of taking out, however small, being, with or without the expense of the proposed fee, so much saved by taking the note in the course of circulation. Not even as between different places does it seem very likely that any such contrariety should take place; but were the inconvenience to happen, the proposed fee, if made a little larger than would otherwise be necessary, might afford something of a remedy. Suppose the fee on the £12 : 16s. to be 4d., and the circulation dull at York, while the issue was brisk at Bristol: a York banker, taking them at par at York, might, by sending them to a correspondent at Bristol, sell the notes there at 2d. or 3d. premium, especially if a correspondence of that sort were favoured in regard to postage. So long as this lasted, the issue at York would be stopped; instead of getting them at the government office, the customer would get them at the bankers, whereby he would save 1d. or 2d., besides a part of the trouble; and the load upon the market at York would be taken off. An agio to an unlimited amount would indeed be destructive of one of the characteristic advantages of the measure; but an agio to an amount thus strictly limited, would scarcely (it is supposed) be felt as a disadvantage. Were the note kept in hand, though it were but for a few days, the interest on it for that small space of time would afford complete reimbursement of the greatest possible amount of loss.

If, in regard to the quantum of the fee, the principle were, that it should amount to just so much as would be sufficient for the remuneration of the local distributor,—this, again, would be a reason for making it variable within certain bounds; for, under any given plan for conducting the business, it would be matter of experiment what is the lowest fee that would be sufficient; and by such improvements on the plan, as reflection fed by experience might indicate, the time and trouble, and thence the quantum of remuneration necessary, might from time to time come to be reduced.

[[16] ]Art. 18. (Accounts published.) The uses of such publication are as follows:—

1. That, from seeing this paper taken out in the way of issue, people may be the more ready to take it in the way of circulation.

2. That in case of its proving to be in any degree an impediment to the circulation of bank and country banker’s paper, the parties concerned may, by observing how the paper spreads, have timely warning to withdraw or keep out of the market any superfluity in their own paper.

3. That in case of any local difficulty as to the circulation of the paper in one part of the country (for instance, by reason of any sudden and extraordinary demand for cash) the load of the paper in the market may be lightened, by sending it to another part of the country, where the issue is observed to be going on briskly.

4. That from the amount of the issue in the course of each given period, indications may be deduced of the degree in which any temporary cause of depreciation must have operated, before it can have the effect, not only of stopping the issue, but subjecting to a discount the quantity already in circulation.

5. That data may be afforded, from which the several classes of persons interested may be able to foresee the approach of the several results or effects in which they are interested; such as the rise of stock 3 per cents. to par—the growing scarcity of government annuities—the reduction of the rate of interest paid by government in respect of them—the increase in the mass of national capital, by the paying off the annuitants—the reduction of the rate of interest in general, &c.

[[17.] ]Art. 20. (Conversion.) Conversion is a word used for shortness, to indicate the result of two operations:—on the part of government, the redemption of such or such a mass of stock annuities; and on the part of the stockholders so expelled, a purchase made of the fresh mass of note annuities to equal amount—a result which, in the case where a man does not choose to part with the mass of annuity he receives from government, is a necessary consequence.

That the disposition to accede to such conversion should be nearly universal, seems altogether probable. The loss of interest is but a sixtieth; and, in all other points, the change will be greatly to a man’s advantage. In a very short period it cannot fail of taking place. When stocks (three per cents.) are no higher than par, the £2 : 19s. note annuities are (it is true) worth, as far as interest only is concerned, no more than £98 : 6 : 8;—but no sooner are three per cents. up at 102, than the £2 : 19s. per cent. are worth upwards of £100¼.

Among any such group of annuitants thus forcibly expelled, there will always be a certain proportion (it is true,) who at the time of the expulsion were desirous of disposing of their annuities, and would have done so, had the matter been left to their choice. But, by the supposition, there will be at the same time another group desirous of purchasing a mass of annuities, equal at the least to that which is thus wished to be disposed of; otherwise the price of the article would not be at par, which it is supposed to be;—therefore, setting the one demand against the other, the whole amount of the mass of annuities paid off at or above par, may be set down as so much taken from a set of proprietors, who will not part with such their property, but will accept of it in the proposed new shape.

Proposed mode of effecting the conversion.—Adjoining to the room where a man signs in the stock-book a recognition of the redemption of his mass of stock annuities, are two other rooms—a money-room (as at present the dividend-warrant room) and an annuity-note room. Question by the clerk: “Is it money you want? yonder is the room for receiving money, and here is the warrant for it. Do you keep your annuities? yonder is the annuity-note room, and here is your warrant for the amount in annuity-notes.”

On this occasion, two provisions, customarily inserted in the acts, will require observance;—1. That notice (a year in some instances,a half-a-year in others)b be given of the intention to pay off; and that the masses paid off at once be not less than of a certain magnitude—£1,000,000 in some cases, £500,000 in others. Of the former the object was, as it should seem, that a man may have time to form his plans in regard to the employment of his money; of the other, to obviate the suspicion of personal preferences, which, if the masses were small and undetermined, might be manifested in favour of individuals; viz. by paying a man off, or respiting him, whichever were most advantageous at the time.

To comply with these conditions, as far as appears either practicable, or material, or consistent with the practice and intention of the legislature:—suppose the course taken, in regard to the redemption of the stock annuities, with a view to their proposed conversion into note annuities, to be as follows, viz.—

1. Notice to be given, in the usual form, on the day immediately preceding the next day for a half-yearly payment, or on any earlier day subsequent to the then last day of half-yearly payment;—such notice to be expressive of a general intention on the part of parliament, from and after the day mentioned in such notice, to pay off the then remaining mass of stock annuities, in masses or lots of not less than the above stipulated magnitude of £500,000, as fast as the sums of money for the making of such payments shall respectively be completed;—the order in which the masses shall be paid off, to be determined by a lottery, unless changed in the way next mentioned.

By the publication of the progress of the issue in the newspapers, it will be known all over the kingdom, day by day, what sum is in hand applicable to this purpose. The masses being marked in numerical order for this purpose, each stockholder will see, day by day, whether the mass his portion of stock belongs to is ripe for payment, or if not, how soon it is likely to become so.

That a general notice of the intention, in contradistinction to a particular notice for the very day, was all that was meant by the legislature, may be inferred with some degree of assurance from the practice in Mr. Pelham’s case. Fifty-seven millions worth, and upwards, was the mass of capital in relation to which notice was given on that occasion—that, in the event mentioned, it should, on a particular day mentioned, be paid off: so that, if the invitation given had remained altogether without compliance (an event which for some time was highly probable,c ) the whole would on that one day have been to be paid off, and the money put into the hands of as many as on that one day might happen to apply for it. But, that such payment could have taken place, either in respect of the whole of the mass, or so much as the greater part of it, and that, either on the day fixed, or on any assignable subsequent day, within a week’s or a month’s or even a quarter’s distance of it, is a result that does not present itself as probable.

To borrow nearly fifty-eight millions in the lump, and at that early period too—or even nine and twenty millions, and that payable all in one day—presents itself as an affair of no small difficulty, even on the ordinary footing of mutual obligation as between the two contracting parties. How much greater the difficulty, if (as by the supposition contended against) one party (composed of the eventual lenders) was to be bound, while government, the eventual borrower, was to remain loose!

It seems, therefore, that (according to the interpretation put in that instance by parliament) by a notice that the capital of government annuities will, to such amount, be paid off on such a day, nothing more is to be understood than that (as here proposed) a part will be paid off on that day to such as apply for it, and the remainder at some subsequent day or days, according as the money for paying off shall happen to come to hand.

If not—and if it were regarded as an article not to be dispensed with, that no one parcel of the consolidated 3 per cents. should be paid off but on one of the half-yearly days in use for the payment of the dividends on those annuities, and that day posterior, by one day at least above a twelvemonth, to the first day on which the notice to that effect shall have been made public—the consequence will be, that upon the first parcel so paid off, the loss of time and interest will amount to a full twelvemonth; but that upon all subsequent parcels, the loss of time will be such as cannot amount to less than a year and a quarter upon the whole. For paying off the first parcel—say on the 25th of December 1804—the latest day on which notice can be made public, will be the 24th of December 1803. For paying off the second parcel, the earliest day that can be appointed will be the 24th of June 1805. Should a parcel of the magnitude required by the act (£500,000) have come in or been made sure by the 25th of December 1803, notice may be given on the next day, appointing, as the day of payment in respect of that second sum, the 24th of June 1805. But on this second transaction, 1¼ year, all but a day, would be lost. If, again, by the 23d of June 1804, a third sum happened to have been collected or made sure, and notice given accordingly for the 24th of June 1805, as before—then upon that sum no more than a year and a day would be lost, as above mentioned; and upon the whole, supposing the intermediate days—of collection perfected, and notice given accordingly—to run in a regular series between such earliest day and such latest day, it would, by the nature of an arithmetical series come to the same thing as if the quantity of time thus lost amounted to 1¼ year in each instance.

[[18] ]Art. 22. (1½ per cent. nearly.) See Table I. Note m. From 3 to 1½ is no greater reduction than from 6 to 3;—being that which, in the course of 33 years, viz. between 1717 and 1750, took place in regard to divers parcels of stock, though the reduction of the great mass from 4 to 3 per cent. was not completed till 1757. (See Sinclair on the Revenue, II. 112.)

When Adam Smith wrote, the rate of interest in the Dutch funds was already as low as 2 per cent. [B. I. ch. ix.]

[[3] ]Art. 2. (A farthing.) By taking, for the standard note, a principal sum, having for the amount of its daily interest, at the proposed rate of interest, an even sum (i. e. a sum having an existing piece of coined money or number of pieces of coined money, corresponding to it,) the multiples of this standard note will in like manner have even sums for the respective amounts of their daily interest, and their aliquot parts will have for their amounts of interest, sums capable, when put together, of being made up into even sums.

Here, as in Exchequer bills, the interest is computed daily, that each note may receive from each day a determinate addition to its value, and may pass accordingly in circulation.

The smallest of all notes possessing this property is taken for the standard note, because the smaller a note, the greater the number of persons that are capable of becoming customers for it.a

The standard note being scarcely small enough in this view, it were better, perhaps, that not only the half, but the quarter of it should be issued at the same time.

The larger notes will serve to protect the smaller ones from the contempt which might otherwise attach upon them, by reason of the smallness of the daily, and even weekly, amount of interest.

[[12] ]Art. 14. (Received at government offices.) Were this to be done from the first, a great lift would certainly be given to the proposed currency at once: the only objection seems to be, the possibility lest, in case of any sudden turn taken against it by the public mind, the exchequer should for a time be overloaded with it, i. e. labour under a deficit of cash (the only money that nobody can refuse) to the amount of it. But in Chapter IV. the improbability of such an event, and at the same time an effectual remedy, is pointed out.

Supposing bank-notes to be driven out of the circulation,a the same sort of necessity, or supposed necessity, which gives employment to bank paper in the transactions of governmentb and in other transactions upon a large scale, in preference to cash, to save counting, examining, and luggage, would create an equal demand for the annuity note paper on that score.

[[14] ]Art. 16. (Least quantity.a ) A note under this amount would consequently not be capable of being taken out singly, but only as one in a parcel, with other notes of the same or different magnitudes. So also, perhaps, in regard to the carrying in notes to the local office to be sent up to the general office, to be returned from thence with the interest; as likewise in regard to the changing large for small notes, or vice versá, or injured notes for fresh ones. But instead of a prohibition, as above, the same end might be answered, perhaps more advantageously, in some, at least, of the above instances, by a small fee, acting as a penalty to the amount of it, as by the next article.

By this means, the offices would be kept clear of the most troublesome, as well as numerous, class of customers. Silver notes, for example, would in that case be taken out, not singly by journeymen manufacturers, but in parcels by masters, by whom at pay-day they would be distributed among their journeymen.

Interest would by this means be capable of being received at the offices upon the smallest notes (which, as above, is necessary to their passing in change for large ones;) though what is probable is, that on the small it will scarcely ever be demanded. (See on this head, Chap. V. Profit by interest undemanded.)

What is the least note that can be issued with profit, will be determined by the quantity of time occupied in the operations necessary to the issue of it. Possibly on this account, in the silver, or at least in the copper notes (if any,) the actual signature of the local office-keeper might be dispensed with, and a stamp of some kind (affixed at the time of issue at his office, or previously at the general office) be employed in its stead.

In this power is included that of suspending the issue of notes of any particular magnitude or magnitudes; by which means, in case of an inordinate demand for the proposed paper (viz. such an one as shall threaten to swell to a pernicious magnitude the quantity of it producing the effect of money in the circulation,) a stop may be put at any time to the inconvenience. (See Ch. IX. Rise of Prices.)

[[17.] ]Art. 20. (Conversion.) Conversion is a word used for shortness, to indicate the result of two operations:—on the part of government, the redemption of such or such a mass of stock annuities; and on the part of the stockholders so expelled, a purchase made of the fresh mass of note annuities to equal amount—a result which, in the case where a man does not choose to part with the mass of annuity he receives from government, is a necessary consequence.

That the disposition to accede to such conversion should be nearly universal, seems altogether probable. The loss of interest is but a sixtieth; and, in all other points, the change will be greatly to a man’s advantage. In a very short period it cannot fail of taking place. When stocks (three per cents.) are no higher than par, the £2 : 19s. note annuities are (it is true) worth, as far as interest only is concerned, no more than £98 : 6 : 8;—but no sooner are three per cents. up at 102, than the £2 : 19s. per cent. are worth upwards of £100¼.

Among any such group of annuitants thus forcibly expelled, there will always be a certain proportion (it is true,) who at the time of the expulsion were desirous of disposing of their annuities, and would have done so, had the matter been left to their choice. But, by the supposition, there will be at the same time another group desirous of purchasing a mass of annuities, equal at the least to that which is thus wished to be disposed of; otherwise the price of the article would not be at par, which it is supposed to be;—therefore, setting the one demand against the other, the whole amount of the mass of annuities paid off at or above par, may be set down as so much taken from a set of proprietors, who will not part with such their property, but will accept of it in the proposed new shape.

Proposed mode of effecting the conversion.—Adjoining to the room where a man signs in the stock-book a recognition of the redemption of his mass of stock annuities, are two other rooms—a money-room (as at present the dividend-warrant room) and an annuity-note room. Question by the clerk: “Is it money you want? yonder is the room for receiving money, and here is the warrant for it. Do you keep your annuities? yonder is the annuity-note room, and here is your warrant for the amount in annuity-notes.”

On this occasion, two provisions, customarily inserted in the acts, will require observance;—1. That notice (a year in some instances,a half-a-year in others)b be given of the intention to pay off; and that the masses paid off at once be not less than of a certain magnitude—£1,000,000 in some cases, £500,000 in others. Of the former the object was, as it should seem, that a man may have time to form his plans in regard to the employment of his money; of the other, to obviate the suspicion of personal preferences, which, if the masses were small and undetermined, might be manifested in favour of individuals; viz. by paying a man off, or respiting him, whichever were most advantageous at the time.

To comply with these conditions, as far as appears either practicable, or material, or consistent with the practice and intention of the legislature:—suppose the course taken, in regard to the redemption of the stock annuities, with a view to their proposed conversion into note annuities, to be as follows, viz.—

1. Notice to be given, in the usual form, on the day immediately preceding the next day for a half-yearly payment, or on any earlier day subsequent to the then last day of half-yearly payment;—such notice to be expressive of a general intention on the part of parliament, from and after the day mentioned in such notice, to pay off the then remaining mass of stock annuities, in masses or lots of not less than the above stipulated magnitude of £500,000, as fast as the sums of money for the making of such payments shall respectively be completed;—the order in which the masses shall be paid off, to be determined by a lottery, unless changed in the way next mentioned.

By the publication of the progress of the issue in the newspapers, it will be known all over the kingdom, day by day, what sum is in hand applicable to this purpose. The masses being marked in numerical order for this purpose, each stockholder will see, day by day, whether the mass his portion of stock belongs to is ripe for payment, or if not, how soon it is likely to become so.

That a general notice of the intention, in contradistinction to a particular notice for the very day, was all that was meant by the legislature, may be inferred with some degree of assurance from the practice in Mr. Pelham’s case. Fifty-seven millions worth, and upwards, was the mass of capital in relation to which notice was given on that occasion—that, in the event mentioned, it should, on a particular day mentioned, be paid off: so that, if the invitation given had remained altogether without compliance (an event which for some time was highly probable,c ) the whole would on that one day have been to be paid off, and the money put into the hands of as many as on that one day might happen to apply for it. But, that such payment could have taken place, either in respect of the whole of the mass, or so much as the greater part of it, and that, either on the day fixed, or on any assignable subsequent day, within a week’s or a month’s or even a quarter’s distance of it, is a result that does not present itself as probable.

To borrow nearly fifty-eight millions in the lump, and at that early period too—or even nine and twenty millions, and that payable all in one day—presents itself as an affair of no small difficulty, even on the ordinary footing of mutual obligation as between the two contracting parties. How much greater the difficulty, if (as by the supposition contended against) one party (composed of the eventual lenders) was to be bound, while government, the eventual borrower, was to remain loose!

It seems, therefore, that (according to the interpretation put in that instance by parliament) by a notice that the capital of government annuities will, to such amount, be paid off on such a day, nothing more is to be understood than that (as here proposed) a part will be paid off on that day to such as apply for it, and the remainder at some subsequent day or days, according as the money for paying off shall happen to come to hand.

If not—and if it were regarded as an article not to be dispensed with, that no one parcel of the consolidated 3 per cents. should be paid off but on one of the half-yearly days in use for the payment of the dividends on those annuities, and that day posterior, by one day at least above a twelvemonth, to the first day on which the notice to that effect shall have been made public—the consequence will be, that upon the first parcel so paid off, the loss of time and interest will amount to a full twelvemonth; but that upon all subsequent parcels, the loss of time will be such as cannot amount to less than a year and a quarter upon the whole. For paying off the first parcel—say on the 25th of December 1804—the latest day on which notice can be made public, will be the 24th of December 1803. For paying off the second parcel, the earliest day that can be appointed will be the 24th of June 1805. Should a parcel of the magnitude required by the act (£500,000) have come in or been made sure by the 25th of December 1803, notice may be given on the next day, appointing, as the day of payment in respect of that second sum, the 24th of June 1805. But on this second transaction, 1¼ year, all but a day, would be lost. If, again, by the 23d of June 1804, a third sum happened to have been collected or made sure, and notice given accordingly for the 24th of June 1805, as before—then upon that sum no more than a year and a day would be lost, as above mentioned; and upon the whole, supposing the intermediate days—of collection perfected, and notice given accordingly—to run in a regular series between such earliest day and such latest day, it would, by the nature of an arithmetical series come to the same thing as if the quantity of time thus lost amounted to 1¼ year in each instance.

[a]Had the bank been sufficiently aware of this, would they have waited, till compelled by necessity, before they issued their £2 and £1 notes?

[a]This (it should seem) would depend upon government; since if government, in the issues of annuity notes, refused to take bank notes in payment for them, the unwillingness to take barren paper, when interest bearing paper was to be had, would soon become general, if not universal. As to the propriety of this, or any further measures in the same view, see Chapters VIII. and IX.

[b]“Guineas cannot be used in any considerable dealings,” says Mr. H. Thornton, in his evidence before the Committee of the House of Lords on the stoppage of the bank. (Report, p. 72; reprinted in Mr. Allardyce’s Address on the Affairs of the Bank, Appendix, p. 54.) By Mr. Abraham Newland’s evidence, in the above Report (p. 62,) it appears that the payments of cash into and from the exchequer, are small in comparison with the payments in bank notes; not above £50,000 or £60,000 a-day, upon an average, remaining in the exchequer in the shape of cash; forming a daily total of money (cash and paper together) averaging about £151,095 (see Chap. V.) And out of £20,000,000 paid on the score of dividends at the bank, not above £1,300,000 or £1,400,000 is paid otherwise than in bank-notes.

[a]Not less, for instance, than the amount of the quarter note (the £3 : 4s. note) or the half quarter (the £1 : 12s. note.)

[a]25 Geo. II. c. 27 (the first consolidated act;) 39 & 40 Geo. III. c. 32.

[b]3 Geo. III. c. 10.

[c]Sinclair, ii. 112.