4. It can be divided without loss: because it may be changed for lesser notes at the office.
5. It is capable of a stamp, and less liable to be counterfeit.
The practice of most trading nations confirms, that paper is more qualified for the use of money, than silver; providing it hath a value. in Holland silver is pledg’d, and paper is used as money. that land pledg’d is a better value than silver pledg’d, is evident from what has been said. in England, before the bank was set up, gold-smiths notes were received in payments preferable to gold or silver: which shows that paper money had all the qualities necessary in money, so much more than gold or silver, as to equal the danger of a gold-smith’s breaking, of which there were many examples. Mr. Lock, pag. 7th on interest of money, says, that one gold-smith’s credit (being usually a note under one of his servants hands) went for above eleven hundred thousand pounds at a time.
The notes of the bank in Scotland went, tho’ there was no money in the bank, and tho’ their acceptance was voluntary. the security for the paper propos’d will be as good, the administration may be more safe and satisfactory than that bank, or any other private bank; because it is more public, and the commission has not any share of the profits. besides it will not be liable to the hazard banks are liable to, from the sale of shares.
And it seems strange that the administration of such a commission should be doubted, when the parliament has the nomination of the managers; when the managers are to be accountable to the parliament; when the trust is to be so small, for more notes cannot be coin’d so long as 25000 lib. is in the office; a committee of parliament is to be appointed to inspect the management, the books are to be open to the inspection of any member of parliament, and the state of the commission is to be published in print.
Since the notes of the bank went upon a voluntary acceptance, tho’ there was no money in bank; ’tis reasonable to think the paper money propos’d will at least have the same currency: being current by law does not make it less valuable. he who took bank notes, could not be sure the bank would be in a condition to give money for them; and the person he was to pay money to, might refuse them: so he was more uncertain, than if they had been current by law.
The silver money being to fall betwixt 8 and 9 per cent in 3 months, it is not to be suppos’d that silver will be prefer’d to paper money; since the notes of the bank, which is paper upon the same fund, went at the ordinary interest: and tho’ the receiver was not certain of the money at the time it was promised, or that the person he was owing to would receive it.
It may be objected, that paper went because silver could be got for it when demanded, or at a certain time.
That was very reasonable, but would not be so in this case: the security pledg’d for that paper money, was silver. the security pledg’d for this paper money, is land. this money has no relation to gold or silver, more than to other goods. and it were more extravagant to say, I won’t take a 100 lib. of such paper money for the goods I sell, because I am not sure if 6 months hence it will buy me such a quantity of silver; for silver may grow dearer: as it would be to say now, I won’t take a 100 lib. in silver for the goods I sell; because I am not sure if 6 months hence, it will buy me such a quantity of wine, for wine may grow dearer.
4 Crowns won’t buy a guinea, tho’ they were coin’d for the same value; nor won’t buy the 10th part of goods 4 crowns bought 200 years ago, yet silver is received as a value, and contracted for, tho’ its value lessens every year, and tho’ ’tis not perhaps worth above a third of what ’tis given or contracted for, abstracted from the use of money. this paper propos’d will not only keep its value; the encrease of the quantity depending on the demand, and the quantity decreasing as the demand decreases: but likewise the land pledg’d is as valuable as the paper given out, abstract from its use as money, and encreases in value.