The Online Library of Liberty

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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 IV.

GROUNDS OF EXPECTATION, IN REGARD TO THE PROPOSED MEASURE.

What is expected of the proposed currency is:—

That it will be taken out in the way of issue, and pass in the way of circulation, at 3 per cent. nearly (the rate of interest put upon it,) notwithstanding the higher interest yielded by stock annuities, Irish debentures, exchequer bills, and India bonds, is proved by the example of bankers’ paper, the interest on which runs from 2 to a nominal 3 per cent.; but really not so much, by reason of divers conditions, which reduce the value of it; besides that, in these instances, the engagement is not perpetual, nor the security so good.

That the interest due will be allowed for in circulation, is put out of doubt by the usage in the course of exchequer bills, navy bills, and India bonds; though none of these papers are provided with the tables, which do away the trouble of computation altogether, however small the sum, and however short the time.

The following may serve as a view of the masses of money (cash or bank paper,) capable of being employed in the purchase of this paper, whether in the way of issue, or in the course of the circulation—the time when the paper is capable of being taken in hand, being the time when the several masses of money respectively come in hand; and the time for parting with the paper, being the time when the money must or would have been parted with.

I. Monies capable of being employed in the purchase of the proposed paper, for the purpose of perpetual or permanent income, without any view to circulation; and that would thereby afford to the note-holder, so long as the paper were kept in hand, a mass of perpetual annuities on a small scale.

1. Money actually kept up in the form of a petty hoard, or hoard upon a small scale, with or without accumulation, to serve as a fund for demands, more or less remote and certain, but determinate; such as marriage, apprenticing out, or portioning children—provision for widowhood or superannuation—purchase of articles of stock in agriculture or manufactures, building, or furniture of such a price as to require a persevering course of frugality to raise the amount.

2. Money, the amount of which would be kept up in the shape of the proposed interest-bearing paper, if the proposed encouragement were to be held out.

3. Money actually kept in reserve for contingent and indeterminate expenses.

4. Money that would be kept in reserve for such purposes.*

II. Monies that could not, or would not, have been employed in the purchase of the proposed paper, but with a view to circulation; the amount being destined to be otherwise employed or spent within a smaller or larger compass of time, in masses or in driblets, as the money (cash or bank paper) would have been employed or expended.

5. Money coming in the shape of fixed income, i. e. to an amount certain, and destined for current expenditure.

6. Money coming in the shape of casual income, i. e. to an amount uncertain, and whether in driblets or large masses, and destined (as above) for current expenditure.

7. Money received in the shape of income in trust on private account: ex. gr. by land stewards, army and navy agents, guardians, receivers of the estates of corporations, of estates thrown into Chancery, &c. See Ch. XI.

8. Money received in trust on public account, in its passage to or from the exchequer: ex. gr. by collectors and receivers of the land tax, customs, excise, stamps, assessed taxes, boards and individuals receiving impress money for various services. See Ch. V.

9. Money already in capital sums (whether received on the score of debt, or by sale of lands, houses, government annuities, shares in a joint stock company, succession, testament, or gradual accumulation) under engagement to be laid out, on a day certain or uncertain, in a mode of permanent investment: ex. gr. purchase of land, houses, or government annuities; shares in a joint-stock company, loan on mortgage or bond, stocking of a farm, or establishment of a manufactory.

10. Money already in capital sums not under engagement, but waiting for opportunities of being laid out, as above.

11. Money already in capital sums, not under engagement, but waiting for opportunities of temporary employment—such as loan by discount of bills, purchases in the above ways on speculation, purchases in the way of trade, &c.

12. Money, as yet in small sums (whether saved from fixed or casual income,) kept in hand for accumulation.

13. Money received in the shape of capital, in trust on private account: ex. gr. by assignees of bankrupts and insolvents, prize agents, executors, and administrators, turning effects into money, &c.

14. Money destined for the discharge of debts, and kept in hand while accumulating into the sum due, or waiting for the time when due, or for their being demanded.*

The ground of the expectation thus entertained on behalf of the proposed currency, will appear the stronger, the more closely the advantages conferred by the possession of it are compared with the advantages afforded by the several other sorts of securities, or modes of placing out money, considered as coming in competition with it;—viz. stock annuities, exchequer bills, and the market constituted by the demands of individual borrowers, country banking-houses included, as well as those afforded by cash itself, and by Bank of England notes.

I. Compared with the market afforded by stock annuities, we shall find it possessed of the following advantages:—

I. In regard to purchase—

1. No trouble or expense on the score of journeys to London, or attendance there; 2. No expense on the score of agency, 3. Brokerage, 4. Stamp duties, 5. Fees for powers of attorney, or, 6. Postage; 7. No danger of loss by buying to a disadvantage.

II. During custody—

1. Interest daily—not so much as a day’s interest need ever be lost; 2. Interest receivable without trouble; 3. Compound interest capable of being made with certainty and facility; 4. Settlements of money in trust may be made by this means, without trouble or expense.

III. In regard to transfer—

1. No expense or trouble on the score of journeys or attendances; 2. No expense on the score of agency, 3. Brokerage, 4. Stamp duties, 5. Fees for powers of attorney, or, 6. Postage; 7. No danger of loss by selling to a disadvantage; 8. The capitals of the mass of notes, employable in the shape of circulating capital, in whatever portions may from time to time be requisite—just like so much cash—without trouble or expense.†

II. To money circumstanced as in the case last supposed—viz. to be laid out either in small parcels or parcels of any magnitude for a short time—the purchase of exchequer bills is in some measure free from the objections to which the purchase of stock annuities is exposed, but it is open to others:—

1. The period for which they are issued is limited in general to a time of war; besides which, their existence is at all times precarious.

2. The quantity of them is continually liable to increase, as well as the time of payment to retardation, and thence their marketable value to depreciation to an unknown amount.

3. Exchequer bills are never issued for sums less than £100; by which circumstance every mass of money less than that considerable amount is excluded from this branch of the market.

III. Circumstances of comparative disadvantage attending the private market may be reckoned as follows, viz.—

1. Trouble and expense and loss of time attending the inquiry necessary in many cases to the meeting with a fit opportunity of placing out money at interest.—N.B. In the case of the proposed market, this circumstance of disadvantage is altogether wanting.

2. Want of coincidence between the quantum of the sum wanted to be borrowed and that of the sum ready to be lent.—Wanting altogether.

3. Want of coincidence between the time for which money is wanted to be borrowed, and the time for which it can conveniently be lent.—Wanting altogether.

4. Difficulty of obtaining sufficient assurance respecting the competency of the security in its several points of view.—Wanting altogether.

5. Trouble, expense, loss of time and interest, attendant on the adjustment of the pecuniary part of the security.—Wanting altogether.

6. Trouble, sometimes expense, loss of time and interest, attendant on the process of demanding and obtaining payment of the interest alone, or of principle and interest together, as the case may be.—Trouble and loss of time—reduced to next to nothing: Expense and loss of interest.—Wanting altogether.

7. Danger of loss, and particular incidental inconvenience, by unexpected delay in regard to payment—wanting altogether.

8. Danger and fear of the necessity of litigation.—Wanting altogether.

9. Unwillingness to deal with a stranger, in consideration of the uncertainty respecting his trust-worthiness in respect of moral character and pecuniary sufficiency.—Wanting altogether.

10. Unwillingness to deal with the individual, if a stranger, in respect of the risk of being eventually obliged either to distress him by pressing for payment, or to submit to loss for want of such importunity in many cases. In the instance of a friend, in case of any apprehension of solvency, still more if on that of moral trustworthiness, unwillingness still greater.—Wanting altogether.

11. Unwillingness to accept of interest from a friend, especially if it be on a small sum, or for a short time.—Wanting altogether.

12. Unwillingness, through shame, to accept, and much more to demand, interest for sums and times separately trifling, how considerable soever in their collective amount.—Wanting altogether.

13. Embarrassment, disputes, and loss of time in the computation of interest on small or fractional sums, or for short and fractional periods.—Wanting altogether.

14. Danger of loss by death, marriage, or other change of condition on the part of the borrower, whereby, as far as mere personal security is concerned, a security originally sufficient may become bad or precarious.—Wanting altogether.

That it should continue to circulate without any depreciation, is not essential to the existence of a paper currency—witness the case of exchequer bills and other government paper. But though the property of circulating without depreciation may not be essential to the circulation of this annuity-note paper, it will at any rate be highly conducive to it.

Depreciation proof, it must be confessed, it cannot be, any further than the government, of whose promises it is the vehicle, is destruction proof: by any cause, therefore, that threatens immediate danger to the government—such as invasion, for example, or civil war—its value will be liable to be diminished. These cases can never be urged as an objection specially applicable to the proposed measure.

The measure would not impair, but rather add to the solvency of the government: by the profit it would afford, additional means would be afforded for the reduction of the debt of government.

To the security of government it would add by the multitude of hands it would engage by the tie of interest in the support of government. To create and maintain an interest of this sort is a most happy property common to all government securities: but all the government securities yet known in this country are confined in their circulation to the superior and least numerous classes. It is among the characteristic properties of the proposed new government security, to spread itself among the poorer and most numerous classes, and thus to engage them to give their support to government.

Against depreciation from any sudden demand for payment, the proposed paper is not only as secure as the existing government papers, but more so: those other papers engage to pay the principal and interest; the proposed paper, the interest only. In the one case, the fund drawn upon is the revenue of a single year, or some small number of years; in the other case, the fund drawn upon is the revenue of thirty-five successive years.

Setting aside the extreme cases here in question, there is but one cause of depreciation to which government paper stands exposed, and that is the forcing of the market. The proposed paper alone is not exposed to this cause of depreciation: it will be issued only in proportion to the demand, and is rendered for ever incapable of exceeding it. The produce also will be employed in strengthening the security and lightening the load of the same commodity at market.

It may, however, be urged, that though the proposed paper can never be sold under the par price, it may, in consequence of the demand for its correlative hard cash, cease to bear that price. That such would be the effect in the event of a civil war or serious invasion, will scarcely admit of doubt; and that an effect of the same nature, though to a less amount, should be liable to be produced by other causes, can hardly be regarded as improbable.

To this it may be answered—

1. That admitting (for argument’s sake) that such a result would occasionally take place to a certain degree, still this would not operate as an argument against the institution of the proposed plan, unless such a result were to appear more likely to take place, or likely to take place in a greater degree with regard to it, than with regard to any other circulating government securities.

2. That though such a state of things as the objection supposes be conceivable, yet no ground can be stated, either in point of reason or experience, for regarding it as likely ever to be realized. To whatever extent the amount of the proposed paper may have arrived at the time of the supposed extra demand for cash, it cannot have attained to it but in consequence of a proportionable preference given to it in comparison with hard cash. And the cause of that preference is a circumstance not exposed to change. It consists in this, viz. that principal with interest amounts to more than principal alone: £103 is more than £100, and the ratio is not less at one time than another.

For the purposes of expenditure within the limits of the British empire, the proposed paper could never lose its superiority; and as to so extraordinary a demand for the precious metals for exportation to foreign countries, no such case appears ever yet to have been realized;—the scarcity of bullion in 1796, in the opinion of the most competent judges, being referable not to the extent of the foreign demands, but to the constitution of the existing private paper, payable on demand; to the experienced brittleness of some of the country paper; to the occasional scantiness of the paper of the great chartered company, coupled with its preceding copiousness, and the excess of the advances made by the company to government,—causes which after all would not have been adequate to the production of the effect, had it not been for those alarms of invasion which were prevalent at the time.

3. That no such extra demand for cash, supposing it to exist, could produce any depreciation in the price of the proposed paper till after it had put an entire stop to the purchase of it in the way of issue; since the progress of the issue, being matter of universal notoriety, it could never (in virtue of Art. 18) happen, that in any one part of the country (the expense of postage being out of the question) a man should give £100 for such a quantity of this paper as might in any other part of the country be had for £99. 19s. But in the nature of things, setting aside the influence of the supposed extraordinary and temporary causes, the amount of the demand for this paper cannot but be regularly receiving a regular and very rapid increase.

4. But if, in a case thus void of probability, it were worth while to look out for a remedy, a remedy, and that of the preservative kind, might easily be provided for it: I mean that of a cash fund (not to exceed, suppose a million) formed by a reserve made of a part of the profits of the operation (as per Art. 9,) to be employed in case of need in the support of the price of the proposed paper, by either buying it in with cash, or taking it in pawn for cash, from the time that the discount upon it had risen to an amount worth regarding.

In consideration of this steadiness of price, the proposed paper would become everybody’s paper; all persons possessing any of the masses of money above enumerated—that is, all classes of the community—are likely to be included among the holders of the proposed paper, either as customers for permanent or temporary annuities upon large or small scales; and as it would possess a value in use superior to that of gold and silver, inasmuch as it would yield a profit whilst it was retained; and inasmuch as it would possess a solidity of value far exceeding the paper of any private banker, or even the paper of the bank of England—a solidity only to be destroyed by destroying the power of the government, to pay the interest promised to be paid—a solidity increasing with the amount issued—it would be secure of constant circulation from hand to hand.

Being the holder of an annuity note, there is not a person living on whom I have any right to call upon to give me value for it:—but had it not been for the advantage accruing from the holding of the note, I should not have become the holder of it: and as the advantage thus accruing to me from the holding of this note is no greater to me than it will be to thousands of other people—in a word, to every man without exception, to whom it can be in my way to offer it—in the event of his becoming the holder of it in my stead, the certainty of my obtaining value for it at any time wants nothing of being entire.

No one living is bound to give me silver for the guinea I have in my pocket; yet who is there that ever hesitated to receive a guinea, under the apprehension of not being able to get change for it? Not only the self-regarding advantage of making profit by goods sold for part of the value, engages my neighbour, the shopkeeper, to change it for me, on my laying out to the value of a few halfpence with him, but the social consideration of amity and neighbourhood is sufficient to procure for me the same accommodation at his hands, without any such personal advantage. In the case of the annuity note, the social consideration not only operates with equal force, but has the personal consideration of the advantage to be gained by the holding of the note to back and strengthen it.

The material question is,—Will it be received? This being answered, and answered satisfactorily, the other question,—Why will it be received? how comes it that it will be received?—is matter only of curiosity and speculation.

It may further be observed, that no man will ever have obtained any such note in the way of issue (I mean at the office,) who would not have preferred obtaining it in the course of circulation, and in that way would have obtained it, if he could have got it; because the trouble and expense of taking it out in the way of issue, reduced as it is to the lowest term, will always be something; and in the way of circulation he obtains it without either that trouble or expense. The necessary consequence is, that in the ordinary state of the market, there must exist at all times a disposition to receive a greater quantity of this article than is ever found in it.

The practice of taking out annuity notes can never have become general, without the practice of receiving them in the course of circulation having become universal, and the disposition so to receive them have grown into a confirmed habit—a habit as determinate as that which engages a man without reflection, without thought or deliberation, to receive bank paper, as he would gold.

The value of these notes would be depreciated or destroyed, if the taxable powers of the nation were to such a degree exhausted as not to suffice for the payment of the whole of the annuities with which it stands chargeable, and consequently not for the whole of this proposed branch of annuities. If the whole island became a province of France, or were swallowed up by the sea,—if the globe of which it forms a part were carried off by a comet, were frozen, drowned, or burnt.—But we have no need on the present occasion to take any account of any of these calamities, and that not so much on account of their improbability, for there is not one of them that can be pronounced impossible, as because, bank paper being the assumed standard of comparison, any one of them would be equally fatal to the credit of such paper.

[* ]This (should it ever come into existence) will be the only species of property known, which not only pays for keeping, but pays without either risk or trouble. To the aged and parsimonious, it will be a new discovered treasure. Timidity and indolence are the natural accompaniments of that disposition to parsimony which is so natural an accompaniment of old age. To place money out at interest in any other way, is a work not only of exertion but of hazard: in this way, a man escapes from both.

To hoard money—to keep in hand any quantity that might be placed out at interest—is to suffer a continually increasing loss. Yet the habit of sustaining this loss is found a concomitant—and that not an unfrequent one—of the habit of parsimony.

At the hour of death, ready money, in large masses, has been found in the hands of the parsimonious of all ranks, from the beggar to the prince. But what prince, or what beggar, is there, who will hoard metallic money, when, by simply forbearing to part with this new species of paper money, he may, every day of his life, be not only preserving his property, but adding to it?

[* ]Of the annual amount of money received in the shape of income, and capable of being employed in the purchase of the proposed paper, a conception may be formed from the supposed amounts of the several component branches of the national income, as exhibited in the income table framed for the purpose of the income tax, and printed in Mr. Secretary Rose’s Finance Pamphlet of 1799; to which are subjoined the amounts of the same articles, according to the estimate of Dr. Beeke.a

Observations.—The more regular the receipt, and the larger the masses received, are, in proportion to the total income of the year, the better adapted are they to the purpose of the proposed temporary employment. Stock dividends occupy the highest point of the scale—professional profits, where accumulation is out of the case, the lowest. The weekly pay of a labourer would afford him no inducement to take out annuity-note paper in the way of issue, unless in case of boarding; but in the way of circulation, it would at least be upon a footing with cash.

[† ]The following bill of costs, exhibiting the charges attendant on dealings in stock, though it were for the minutest portion, in cases where, by distance of residence and want of connexions in the metropolis, the party is obliged to have recourse, in the regular way of business, to professional assistance, may serve to show how ill adapted government annuities are, upon their present footing of stock annuities, to enable a man to employ inthat way to advantage, either a small sum for any length of time, or even a considerable sum for a short time; and this, even independently of those contingencies which in the latter case have so frequently the effect of converting expected profit into positive loss. The charges are such as I have reason to look upon as rather under than overrated. By doing certain parts of the business himself, or getting them done gratis by a friend, a man may save so much of the expense;—as his wife might save the expense of a mantua-maker, by making her own gown: but a contingency of this sort does not prevent the professional charge from being, in a general point of view, the proper standard of expense.

If the party die before the stock is resold, the whole of the above expense of £2 : 5 : 8 will be to be repeated; and to it there will be to be added the expenses attendant upon proving the will, or taking out letters of administration to the deceased.

[* ]Of the annual amount of money received in the shape of income, and capable of being employed in the purchase of the proposed paper, a conception may be formed from the supposed amounts of the several component branches of the national income, as exhibited in the income table framed for the purpose of the income tax, and printed in Mr. Secretary Rose’s Finance Pamphlet of 1799; to which are subjoined the amounts of the same articles, according to the estimate of Dr. Beeke.a

Observations.—The more regular the receipt, and the larger the masses received, are, in proportion to the total income of the year, the better adapted are they to the purpose of the proposed temporary employment. Stock dividends occupy the highest point of the scale—professional profits, where accumulation is out of the case, the lowest. The weekly pay of a labourer would afford him no inducement to take out annuity-note paper in the way of issue, unless in case of boarding; but in the way of circulation, it would at least be upon a footing with cash.

[a]Observations on the Income Tax, second edition, 1800.The amount of the sums which, having been received in the shape of capital, are susceptible of the proposed temporary employment, is altogether unsusceptible of calculation. In the course of the year, it is greater or less than that of the sums received and kept for the purpose of expenditure.