Thoughts on the mechanism of societies

by marquis de Charles Casaux

The quantity of money required for circulation, depends neither on the speculations of a Minister of finances, nor on the blind cupidity of trade, which, luckily, is always counteracted by the clear-sighted cupidity of every trader: it depends on the quantity of articles to be circulated, on their price, and on the method adopted for circulation:—it is evident that less cash is required in England than in France to circulate the same mass of revenue, trade, and transactions of all kinds; the reasons are obvious: but the sum wanted for the circulation being once found, every addition thereto is soon, notwithstanding all ministerial machinations, transferred to some hundred leagues distance, if that surplus should be wanted there: now, when this necessary sum for circulation is once ascertained, we shall see how useless it is to despoil, how absurd it is to suppose that they do despoil the rest of Europe of her money, in order to keep up that circulation.

What is the real amount of the cash circulating in England? Some say 25, others 30 millions sterling. It is probable that 25 millions are sufficient, with the help of credit and paper-currency, even in the supposition that France should stand in want of 2 milliards of livres in hard cash to give circulation to a revenue, double to that of England, because there is in France no paper-money, and much less credit than would be obtained, were it not, too often yet, so easy to avoid, by another kind of credit, the payment of the most lawful debts: but we must argue from an incontrovertible fact, and assent, in their fullest scope, to the consequences that may be deduced therefrom. The following is the fact:

Of all the coin circulating in England, 18 months ago there was only a sixth, and there is now much less than a sixth part, in pieces struck before the present reign. Now, in 1780, it appears that the money coined at the Mint, in the present reign, amounted only to 30,457,805l.

It is impossible to suppose, that in the space of 18 years there should have been carried out of the kingdom, either to Ireland, or in support of the smuggling trade, or for other purposes, less than the amount of the coin struck since that period. Let us add to the 30 millions coined from the beginning of this reign down to the year 1780, the 5 millions for the sixth part in old specie remaining of the former reigns (that sixth supposed, rather than acknowledged, to be actually in circulation), the total will be 35 millions; to which must be added, the value of silver plate, toys, &c. Admit, that all these articles together, circulation and silver wrought, amount to 50 millions sterling;—to those who may think that the sum of 15 millions, at which I rate the wrought silver of all kinds, is too trifling, I would recommend to observe, first, that these 15 millions constitute nearly the tenth part of the general revenue, both of the land and industry; secondly, that the third part of that revenue belongs to the peasants and mechanics, who have no such costly furniture; and thirdly, that as to the rest of the nation, if there exist a man who possesses the equivalent of one half of his revenue in plate, there are scores who are not possessed of so much as one tenth part.—Shall it be insisted upon, however, that, by adding the amount of plate and the mass in circulation to that which must correspond with the demands that may be made upon the Bank, the whole amounts to 60 millions sterling?—Be it so;—but England was certainly in possession of 20 millions at least, in cash and wrought silver, before the time at which Sir Charles Whitworth began his Statements; for there existed then much less credit, and no paper to answer the purposes of cash:—forty millions, then, constitute the whole of what England chose (I call it strictly a choice) to reserve, out of so many millions imported from America, which really went through her hands, in the space of 90 years.—I am fully persuaded that I could meet with some thousands of persons, even in England, who, from the sketch I have given, would think that I make a present to England of 10 millions. It matters not, I shall be equally generous in regard to France, whose accounts I am about to lay open; and yet I shall have gold and silver enough left to extend my liberality all over Europe.

Mr. Necker has but two reasons to suppose that there exists in the French circulation a sum of 2,200,000,000 livres tournois. The first is the indubitable fact, that since, and including the general re-coining of the French specie in 1726 to 1783, there have been struck, in the different mints of that kingdom, 2,500,000,000 of the same specie (the only one that is current in that country:) and, in the next place, the very questionable fact, that France has preserved the whole, except 3 or 400 millions tournois, which may have passed into foreign hands, from the quantity of French specie which must have been carried abroad, to answer her commercial and political purposes.

Say only 2000 millions of livres in the French circulation, that I may not be troubled with 100 millions, which can neither weaken nor strengthen my reasonings.

When that general re-coinage of the year 1726 took place in France, there must have existed, at that time, 1000 millions tournois, to impart a proper circulation to a revenue, which, we may suppose, was less by one half than what it is at this time. France, therefore, had occasion to increase her specie, only by the additional thousand of millions, of which she is now in possession, even upon a supposition that she has now 2000 millions; and this want has been supplied in the space of 57 years, at the rate of 18 millions only, one year with another.

Let it be granted, now, that the annual wants, the personal wants of France, in articles of luxury, plate, gold and silver lace, trinkets, &c. amounted to 7 millions tournois, upon an average, in the course of the above 57 years.—By adding thereto the 18 millions I have spoken of, I can find but 25 millions overplus, one year with another, saved by France upon all the treasures of America, which certainly must have passed through her hands from 1726 to 1783.

The reader must be sensible, that there is no occasion to speak of the sums annually exported to India, it matters not by whom; they no longer exist for Europe; and I have proved nothing hitherto, if it be still doubted that Europe has lost nothing in that respect but the trifling advance in her prices, which 100 or 150 thousand pounds sterling, added annually to her general specie, would have given to all the productions, both of agriculture and industry. The return of those 150,000l. in India goods has produced yearly to Europe all the labour necessary to repay them; for it must be observed, that labour pays every thing, and that nothing is paid but by labour. The 150,000l. exported to India, are not lost therefore, as to their essential effect, as would be the case of sums laid up in the coffers of a Sovereign, who might be unacquainted, even at this day, with what was known to Queen Elizabeth above 200 years ago, that the Prince’s treasures are well placed no where, but in the hands of his subjects, that is, of such amongst his subjects who do not lock them up in their own chests.