That every change must either hurt the bank or the public creditors.
Besides these considerations which are in common to all states, the government of Great Britain has one peculiar to itself. The interest of the bank, and that of the creditors, are diametrically opposite: every thing which raises the standard hurts the bank, every thing which can sink it, hurts the creditors: and upon the right management of the one and the other, depends the solidity of public credit. For these reasons I am apt to believe, that, without the most certain prospect of conducting a restitution of the standard to the general advantage, as well as approbation of the nation, no minister will ever undertake so dangerous an operation.
A more easy method of making a change upon the standard.
I shall now propose an expedient which may remove at least some of the inconveniences which would result from so extensive an undertaking as that of regulating the respective interests in Great Britain by a positive law, upon a change in the value of their money of accompt.
Suppose then, that before any change is made in the coin, government should enter into a transaction with the public creditors, and ascertain a permanent value for the pound sterling for the future, specified in a determined proportion of the fine metals in common bullion, without any regard to money, of accompt, or to any coin whatever.
This preliminary step being taken, let the intended alteration of the standard be proclaimed a certain time before it is to commence. Let the nature of the change be clearly explained, and let all such as are engaged in contracts which are dissolvable at will upon the prestations stipulated, be acquitted between the parties, or innovated as they shall think proper, with certification, that posterior to a certain day, the stipulations formerly entred into, shall be binding according to the denominations of the money of accompt in the new standard.
As to permanent contracts, which cannot at once be fulfilled and dissolved, such as leases, the parliament may either prescribe the methods and terms of conversion; or a liberty may be given to the parties to annul the contract, upon the debtor’s refusing to perform his agreement according to the new standard. Contracts, on the other hand, might remain stable, with respect to creditors who would be satisfied with payments made on the footing of the old standard. If the rise intended should not be very considerable, no great injustice can follow such a regulation.
Annuities are now thoroughly understood, and the value of them is brought to so nice a calculation, that nothing will be easier than to regulate these upon the footing of the value paid for them, or of the subject affected by them. If by the regulation land-rents are made to rise in denomination, the annuities charged upon them, ought to rise in proportion; if in intrinsic value, the annuity should remain as it was.