Money and trade considered

by John Law

It remains to be considered, whether any other goods than silver, can be made money with the same safety and convenience.

From what has been said about the nature of money, chap. 1. it is evident, that any other goods which have the qualities necessary in money, may be made money equal to their value, with safety and convenience. there was nothing of humour or fancy in making silver to be money; it was made money, because it was thought best qualified for that use.

I shall endeavour to prove, that another money may be establisht, with all the qualities necessary in money in a greater degree than silver; with other qualities that silver has not: and preferable for that use, tho’ silver were the product of Scotland. and that by this money, the people may be employed, the country improved, manufacture advanced, trade domestick and foreign be carried on, and wealth and power attained.

What I propose, will I hope be found safe, and practicable; advantageous in general to Scotland, and in particular to every Scots-man.

But as I offer to prove, that what I shall propose is more qualified for the use of money than silver: so before I come to the proposal, I shall shew some defects in silver money; and that it has not, nor does not answer the design of money.

Money is the measure by which goods are valued, the value by which goods are exchanged, and in which contracts are made payable.

Money is not a pledge, as some call it. it’s a value payed, or contracted to be payed, with which ’tis supposed the receiver may, as his occasions require, buy an equal quantity of the same goods he has sold, or other goods equal in value to them: and that money is the most secure value, either to receive, to contract for, or to value goods by; which is least liable to a change in its value.

Silver money is more uncertain in its value than other goods, so less qualified for the use of money.

The power the magistrate has to alter the money in its denomination or fineness, takes away the chief quality for which silver was made money. in countries where the money is often changed in the denomination or fineness, ’tis more uncertain to contract for money, than it was in the state of barter to contract for goods. if a 100 ounces of silver are lent, or contracted for, and a bond given for them denominat pounds, payable in a year: in that time half a crown is raised to a crown, and 50 ounces pays the 100 lent, or contracted for.

Tho’ the magistrate did never alter the money in its denomination or fineness, yet it is more uncertain in its value than other goods.