Money and trade considered

by John Law

If ’tis proposed the money be allayed, and the advantage of the allay be given to the owners of the plate. suppose the new money with allay be raised to double the denomination; 5 sh. of plate with the fashion worth 6 sh. will give at the mint 10 sh. allay’d money: but even then the plate will not be brought in voluntarily, for that plate sold in England, and the value brought back by bill, will yield from 11 to 12 sh. exchange being above the par, and 6 pence supposed to be got for the fashion of the ounce of plate.

If it be necessary to coin the plate, such plate should be allowed to be exported as can be sold abroad for more than its weight: security being given to import money or bullion to the value.

Some propose a regulation of the ballance of trade, by retrenching the consumption of foreign goods, and expence in England: so the ballance being brought to be on our side, we may become rich by living within our yearly value, as we became poor by spending beyond it.

Such a regulation will have its difficulties. 1. to discharge all or a great part of the import, will lessen considerably the revenue of the crown; and her majesty may not think good to give the royal assent to such a regulation, unless an equivalent be given. 2. such a regulation would not be so strictly kept, but a part of what was used to be imported would be stole in. 3. the residence of our princes being in England, we are under a necessity of having a ministry there: imployments being at the disposal of the prince, and London being a place of more diversion than Edinburgh, the gentry will continue to go to London for places or pleasure.

But allowing the royal assent were given to such a regulation; either with or without an equivalent; and the regulation could be so strictly kept, that nothing were imported contrair to that law; and allow 20000 lib. could be saved of the expence in England, so that the import and expence abroad should be 60000 lib. less than last year: yet there are other difficulties, that I fear will make the regulation ineffectual.

1. Suppose the ballance last year due by us was 20000 lib. the import and expence abroad lessened 60000 l. these who propose this regulation may think a ballance will be due to us of 40000 lib. but as the bank may have supplyed us with 60000 lib. of notes, more than the money in bank: and as 20000 lib. is supposed to have been exported last year: so our money being lessened 80000 lib. the next year’s export may be so much less valuable, the want of that money having set idle a part of the people were then imployed: and a greater ballance be due than last year, notwithstanding of the regulation.

2. 40000 lib. first cost of goods imported, and 20000 lib. spent abroad, lessened the consumption of the goods of the country; and the export was by so much greater, as the consumption of the goods of the country was lessened. but this regulation occasioning a greater consumption of the goods of the country, the export will be less.

3. Several merchants may have exported goods, tho’ they had not much profit upon the export of them; but because of the profit to be made upon the import; which being lessen’d, may likewise lessen the export.

4. If Scotland discharge or put a very high duty on the goods of other nations, other nations may discharge Scots goods.

Allowing there were no difficulties in regulating the ballance of trade, and that the same measures were followed as are followed in Holland; we would grow richer, but their riches would increase in the same proportion: and 50 years hence Scotland would be as poor as now, in comparison with Holland.