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men, if they pay nothing for them at all, as if they paid 4s. a pair; ten of them (notwithstanding the statuterate should be reduced from 6s. to 4s. a pair) will be necessitated to sit still barefoot, as much as if they were to pay nothing for shoes at all. Just so it is in a country that wants money in proportion to trade. It is as easy to contrive how every man shall be supplied with what money he needs (i. e. can employ in improvement of land, paying his debts, and returns of his trade) for nothing, as for four per cent. Either we have already more money than the owners will lend, or we have not. If part of the money, which is now in England, will not be let at the rate interest is at present at, will men be more ready to lend, and borrowers be furnished for all those brave purposes more plentifully, when money is brought to four per cent.? If people do already lend all the money they have, above their own occasions, whence are those who will borrow more at four per cent. to be supplied ? Or is there such plenty of money, and scarcity of borrowers, that there needs the reducing of interest to four per cent. to bring men to take it?
All the imaginable ways of increasing money in any country are these two: either to dig it in the mines of our own, or get it from our neighbours. That four per cent. is not of the nature of the deusing-rod, or virgula divina, able to discover mines of gold and silver, I believe will easily be granted me. The
of getting from foreigners is either by force, borrowing, or trade. And whatever ways, besides these, men may fancy, or propose, for increasing of money, (except they intend to set up for the philosopher's stone) would be much the same with a distracted man's device, that I knew, who, in the beginning of his distemper, first discovered himself to be out of his wits, by getting together and boiling a great number of groats, with a design, as he said, to make them plim, i. e. grow thicker. That four per cent. will raise armies, discipline soldiers, and make men valiant, and fitter to conquer countries, and enrich themselves with the spoils, I think was never pretended. And that it will not bring in more of our neighbour's money upon loan, than we have at present
among us, is so visible in itself, that it will not need any proof; the contenders for four per cent. looking upon it as an undeniable truth, and making use of it as an argument to show the advantage it will be to the nation, by lessening the use paid to foreigners, who upon falling of use will take home their money. And, for the last way of increasing our money, by promoting of trade, how much lowering of interest is the way to that, I have, I suppose, showed you already.
Having lately met with a little tract, entitled, “ A Letter
to a Friend concerning Usury,” printed this present year, 1660; which gives, in short, the arguments of some treatises, printed many years since, for the lowering of interest : it may not be amiss briefly to consider them.
1. “ An high interest decays trade. The advantage from interest is greater than the profit from trade, which makes the rich merchants give over, and put out their stock to interest, and the lesser merchants break.”
Answ. This was printed in 1621, when interest was at ten per cent. And whether England had ever a more flourishing trade than at that time, must be left to the judgment of those who have considered the growing strength and riches of this kingdom in queen Elizabeth's and king James the First's reigns. Not that I impute it to high interest, but to other causes I have mentioned, wherein usury had nothing to do. But if this be thought an argument now in 1690, when the legal interest is six per cent., I desire those who think fit to make use of it, to name those rich merchants who have given over, and put out their stocks to interest.
2. “ Interest being at ten per cent., and in Holland at six, our neighbour merchants undersell us."
Answ. The legal interest being here now at six per
cent, and in Holland not limited by law, our neighbour merchants undersell us, because they live more frugally, and are content with less profit.
3. “ Interest being lower in Holland than in England, their contributions to war, works of piety, and all charges of the state, are cheaper to them than to us."
Answ. This needs a little explication. Contributions, greater or less, I understand ; but contributions cheaper or dearer, I confess I do not. If they manage their wars and charges cheaper than we, the blame is not to be laid on high or low interest.
4. “ Interest being so high, prevents the building of shipping, which is the strength and safety of our island, most merchant-ships being built in Holland.”
Answ. Though this argument be now gone, such ships being prohibited by a law, I will help the author to one as good. The Dutch buy our rape-seed, make it into oil, bring it back to us, and sell it with advantage. This may be as well said to be from high interest here, and low there. But the truth is, the industry and frugality of that people make them content to work cheaper, and sell at less profit than their neighbours, and so get the trade from them.
5.“ The high rate of usury makes land sell so cheap, being not worth more than fourteen or fifteen years' purchase ; whereas in Holland, where interest is at six, it is worth above twenty-five. So that a low interest raises the price of land. Where money is dear, land is cheap."
Answ. This argument plainly confesses, that there is something else regulates the price of land besides the rate of interest; else, when money was at ten per cent. here, should land have been at ten years'purchase,whereas he confesses it then to have been at fourteen or fifteen. One may suppose, to favour his hypothesis, he was not forward to speak the most of it. And interest, as he says, being at six per cent. in Holland, land there should have sold, by that rule, for sixteen and an half year's purchase ; whereas he says, it was worth about twenty
five. And Mr. Manly says, p. 33, “ That money in France being at seven per cent., noble land sells for thirty-four and thirty-five years' purchase, and ordinary land for twenty-five.” So that the true conclusion from hence is not what our author makes, but this, That it is not the legal interest, but something else, that governs the rate of land. I grant his position, That where money is dear, land is cheap, and vice versa. But it must be so by the natural not legal interest. For where money will be lent on good security at four or five per cent. it is a demonstration that there is more than will be ventured on ordinary credit in trade. And when this plenty becomes general, it is a sign there is more money than can be employed in trade; which cannot but put many upon seeking purchases, to lay it out in land, and so raise the price of land, by making more buyers than sellers.
6. “ It is not probable lenders will call in their money, when they cannot make greater interest any where. Besides, their security upon land will be better."
Answer. Some unskilful and timorous men will call in their money; others put it into the bankers' hands. But the bankers and skilful will keep it up, and not lend it, but at the natural use, as we have shown. But how securities will be mended, by lowering of interest, is, I confess, beyond my comprehension.
Of raising our Coin.
Being now upon the consideration of interest and money, give me leave to say one word more on this occasion, which may not be wholly unseasonable at this time. I hear a talk up and down of raising our money, as a means to retain our wealth, and keep our money from being carried away. I wish those that use the phrase of raising our money had some clear notion annexed to it; and that then they would examine, " Whether, that being true, it would at all serve to those ends for which it is proposed ?”
The raising of money, then, signifies one of these two things; either raising the value of our money, or raising the denomination of
our coin. The raising the value of money, or any thing else, is nothing but the making a less quantity of it exchange for any other thing than would have been taken for it before ; v. g. If 5s. will exchange for, or (as we call it) buy a bushel of wheat; if you can make 4s. buy another bushel of the same wheat, it is plain the value of your money is raised, in respect of wheat, one-fifth. But thus nothing can raise or fall the value of your money, but the proportion of its plenty, or scarcity, in proportion to the plenty, scarcity, or vent of any other commodity with which you compare it, or for which you would exchange it. And thus silver, which makes the intrinsic value of money, compared with itself, under any stamp or denomination of the same or different countries, cannot be raised. For an ounce of silver, whether in pence, groats, or crown-pieces, stivers, or ducatoons, or in bullion, is, and always eternally will be, of equal value to any other ounce of silver, under what stamp or denomination soever ; unless it can be shown that any stamp can add any new or better qualities to one parcel of silver, which another parcel of silver wants.
Silver, therefore, being always of equal value to silver, the value of coin, compared with coin, is greater, less, or equal, only as it has more, less, or equal silver in it: and in this respect, you can by no manner of way raise or fall your money. Indeed, most of the silver of the world, both in money and vessels, being alloyed, (i. e. mixed with some baser metals) fine silver, (i. e. silver separated from all alloy) is usually dearer than so much silver alloyed, or mixed with baser metals. Because, besides the weight of the silver, those who have need of fine (i. e. unmixed silver; as gilders, wire-drawers, &c.) must, according to their need, besides an equal weight of silver, mixed with other metals, give an overplus to reward the refiner's skill and pains. And in this case, fine silver and alloyed or mixed silver are