The Online Library of Liberty

A project of Liberty Fund, Inc.

• 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 IX.

RISE OF PRICES—HOW TO OBVIATE.

I have already stated an extra rise of prices as among the conceivable results of the proposed measure. Taken by itself, it is evidently an undesirable result: it is a tax on income to the amount—a tax which comes out of everybody’s pocket, and goes into nobody’s. Being, with reference to the proposed measure, an unfavourable result, I may be believed with the less difficulty when stating it as a probable one.

Supposing the influx of the proposed paper not to be followed, or rather kept pace with, by an efflux of other money to an equal amount; and supposing it too sudden to be productive of an influx of vendible commodities, to an amount worth regarding in this view, within the assumed space of time; the result presents itself as a demonstrable one. For the price of the whole mass of vendible articles taken together, sold within the year, is, in other words, the same thing as the quantity of money given or undertaken for in exchange for them within that time; so that the quantity of those articles remaining the same, the greater the quantity of the money is that has been given for them, the higher has been the price.

It has already been observed, that it seems impossible to say with any precision to how small or how great a length the emission of the proposed paper may eventually be found to extend previously to the arrival of stock 3 per cents. at par: That, at some part or other of that interval, a small quantity at least can, however, scarcely fail to find acceptance; and that a small quantity, a very few millions for example, issued previously to the conclusion of it, would be sufficient to operate the conversion indicated, and thereby give the form of the proposed paper to the whole of the remaining mass of annuities composing the national debt: That, although the quantity of that species of property will be continually and rapidly on the decrease, while the demand for it will be as continually and rapidly on the increase, it will nevertheless be difficult, if not impossible, to prescribe any determinate limit to that portion of it which in this way may come to have introduced itself into the circulation, on the footing of current money; for the open issue will remain equally open to the customers for temporary income (who, when they have kept it as long as they can afford, will throw it into the circulation) as to the customers for permanent income; and it seems impossible to say in what proportions, at any given time, the quantity of annuity-note paper remaining at that time, will find itself distributed between the two classes.

On these considerations, it will be matter of prudence to be prepared for the several possible cases and degrees in which it may happen to constitute a clear addition to the mass of money in circulation, to any such amount as to be in a sensible degree productive of the apprehended inconvenience.

Of such preparation, the practical result will be, to take such measures as shall be effectual for the prevention—not of the rise of prices, which is impossible—but of any addition to that degree of rise, or rate of increase, which would have taken place in the natural course of things, independently of the proposed measure.

If after having expelled of itself the whole amount of paper money of other sorts, it were to keep on increasing without expelling metallic money to an amount equal to its own, it would thence forward, if not restrained, make a proportionable addition to the quantity of money of all sorts in circulation, and thence to the prices of vendible commodities. In this case, it would be necessary to apply the check to the proposed paper itself, by limiting the quantity that should be suffered to enter into the composition of the mass of money in circulation: for example, by stopping the issue of all annuity notes below a certain magnitude; say, for instance, the £102 : 8s. notes. By an expedient thus simple (the requisite powers being given to the executive government ab initio) the end might be accomplished, in the possible event supposed, without any fresh interference on the part of the legislature. That the means thus proposed would be adequate to the end, will appear clear enough (it is supposed) from what has been said on this subject in a former Chapter.*

That in proportion as the proposed paper advanced in circulation, country bankers’ paper and Bank of England paper would quietly withdraw themselves, is a result that appears more probable than the contrary, according to what has already been observed.†

Should it fail of taking place in the requisite degree of itself, it would require to be produced by means directed expressly to that end.

The first of the two species of paper attacked, would naturally be the paper of the country banks. Collectively modern, individually changeable, they have no such claims on government as those which plead in favour of the great incorporated bank.* Express prohibition would not be necessary: by taxation the same effect precisely might be produced—by a simple extension of a tax already imposed for other purposes. By this means, if necessary, about half the utmost possible amount of the supposed redundant mass of paper would be chased away.†

Secondly, and lastly, would come the paper of the Bank of England. In this case, as in the other, the same means would be sufficient to the same end. Perhaps, however, in this case, they would not be necessary. A simple refusal on the part of government, to receive at its own offices any other than its own paper, might be adequate to the effect.‡

It may be asked—to what end throw the whole burthen of the measure upon the two particular classes in question, instead of letting it spread over the community at large in the shape of a rise of prices?

My answer is—to reduce the amount and pressure of it to its minimum. At an estimate greater than any possible one, the former loss would not be to the latter in so high a proportion as that of interest to principal. To the banking class, it is not clear (as hath already been shown) that the loss would in fact amount to anything. But put an extreme case, and take it, in the instance of each individual, at the utmost possible amount it could rise to in the instance of any one. Call the total amount of bank and bankers’ paper 25 millions,∥ and upon the whole of this paper suppose a real profit of 5 per cent. annually made. Upon a supposition in a variety of points thus excessive, the total loss is but £1,250,000 a-year. Call, on the other hand, the total quantity of money of all kinds taken together 75 millions;§ —and suppose (according to the position brought to view at the commencement of this chapter) that the addition made to the prices of vendible commodities, taken together, is in the exact proportion of the supposed sudden addition to the mass of money; viz. as 25 to 75—as 1 to 3. On this supposition, the rise of prices being supposed equable, and therefore universal, every income which did not receive a rateable increase from the supposed sudden influx of 25 millions, would in effect be diminished by a fourth—the whole income of a man so circumstanced producing him no more than three-fourths of the quantity of vendible commodities it produced to him before. Call, with Dr. Becke, the annual income of the country (including income from day labour without stock) £217,000,000—or for round numbers £210,000,000; then will the annual burthen on the country, by rise of prices on the nonexpulsion of the paper money in question, be £70,000,000.*Per contra, the utmost possible annual loss to the bankers and bank proprietors by the expulsion, not so much as £1,250,000; the probable loss, scarcely so much as the odd £250,000.

The amount of the loss would, it is true, be made good in money, in a certain degree, to every person whose circumstances enabled him to make in money an addition to his income equal to the degradation thus sustained by it;—for although the real value of the total mass of money—its value in respect of the quantity of vendible commodities it purchases and conveys—is not greater after the supposed addition to the mass of money, yet on the other hand, neither is it less. The misfortune is, that although the pressure from the defalcation would be felt in all its force—and felt by all parties, indemnified as well as unindemnified—the indemnity would in comparison be scarcely perceived. The loss by the rise of prices would be felt as so much loss:—the gain by the share in that extra influx of money by which the loss had been produced—this gain not being coupled and set down per contra in the mind of the party, and confronted with the loss, would present itself in the shape of an independent gain, unconnected with any such effect:—and by an indisputable law of the sensible faculties of man, sums and circumstances equal, the enjoyment produced by gain is never equal to the suffering produced by loss: if it were, the main reason for affording protection to property would cease.

That an increase in the quantity of real wealth, i. e. of vendible commodities, has been produced by an increase in the quantity of nominal wealth—viz. current money, cash and paper together—seems by no means clear of doubt. But what seems not exposed to doubt is, that the quantum of such addition, if real, accruing in the compass of a year, cannot amount to more than the produce of the fresh quantity of unemployed capacity for labour brought into employment by the application of a proportionable quantity of the supposed fresh influx of money over and above that which would have been brought into employment:—so that if at the commencement of the year all hands capable of employment were full of employment, and so would have continued during the whole course of it, no addition could in the course of that time be made to the quantity of real wealth or vendible commodities by the influx of the money in question, howsoever copious. But whatever quantity of money being introduced into the circulation has not the effect of producing a correspondent quantity of vendible commodities, cannot but have the effect of producing a correspondent degradation in the value of the existing mass of money into which it flows, thereby producing, what is in truth no more than the same effect expressed in other words, a correspondent rise of prices.†

[* ]Chapter IV. Grounds, &c.

[† ]Chapter VIII. Particular Interests, &c.

[* ]The case of the incorporated banks of Scotland does not appear to differ materially in this respect from that of the incorporated and unincorporated country banks of England.

[† ]By the tax upon country bankers, government has already taken to itself a share in the profit on that paper. In so far as country bankers’ paper came to be extruded by the proposed government paper, the profit by this tax would fall of course to be deducted from the sum total of profits promised by the proposed measure.

[‡ ]In this case, nothing would be receivable at the annuity-note offices but cash.

[∥ ]The estimated amount of bank and country bankers’ paper in 1800.

[§ ]The estimated amount of money of all kinds in 1800, nearly.

[* ]Upon the whole, then, the result is, that by every £100 worth of paper issued by a banker, he imposes a tax upon the community, and that to an amount prodigiously greater than that of his own profit.

[† ]For example, let £6,000,000 be the quantity of extra influx money introduced into the circulation in the course of the year;—let the quantity of extra labour produced by this extra influx be equal to full employment for 100,000 fresh hands: the allowance would be perhaps sufficient as applied to the whole amount of fresh labour produced within the year by all causes, the existing quantity of money, and the supposed extra quantity taken together:—applied, therefore, to the latter alone, it will be excessive. It is not a matter of necessity that any addition at all to the mass of vendible commodities shall have been produced by the extra influx of money, since a particular application of the existing quantity of money in the country, without any accession to it whatsoever, is altogether adequate to the producing the utmost possible degree of accumulation. (But for illustration’s sake, the supposed state of things may serve as well as if it were more correct.) Call the average value of the produce of the labour of these 100,000 fresh hands 12s. a-week for each: this in round numbers will be £3,000,000 a-year. £3,000,000, then, is the quantity of extra influx money remaining, the efficiency of which is spent altogether in degrading the value of the mass into which it flows, and producing the correspondent rise in the price of vendible commodities.