CONSIDERATIONS ON Publick Credit.

ACCORDING to your De⯑ſire, I give you ſome ſhort Conſiderations on Publick Credit; with a few Remarks on what has happen'd within theſe laſt Four Years.

By Publick Credit under the preſent Conſideration, is meant, the Value of the Debts owing by the Publick, com⯑monly called the Publick Funds.

[4] When theſe can be Sold at Market for the full Value of the Principal, Pub⯑lick Credit may be eſteemed good.

When they can be Sold for more, then Publick Credit is ſaid to advance.

The Reaſon that theſe Publick Funds have often varied in their Value, and been depreſſed in ſome extraordinary De⯑gree, has chiefly ariſen from the Fear and Apprehenſions of their real Security be⯑ing in danger from foreign Invaſions, Force or Violence. Were it not for theſe Pannicks that every now and then poſſeſs Men's Minds, the Value of the Principal would ſeldom alter in any great Degree.

Common Accidents in State Affairs, and the Arts of Stock-Jobbers, will always have ſome Influence.

But leſſer Alterations in their Value do very much depend on the Rate of In⯑tereſt for Money at the preſent, or any Expectation that it may ſuddenly alter.

[5] As for Inſtance,

If Men apprehend a great Demand of Money for Publick Service upon New Wars and Commotions, and that New Funds are to be created, they will generally run into an Opinion of turning as much as they can of their Publick Debts into ready Caſh, in hopes of making conſide⯑rable Gain by Loans, or purchaſing ſuch New Funds.

On the Contrary,

When the Publick is in a State of Se⯑renity, and the Intereſt of Funds duly paid, and no New Debts are incurr'd, there will then always remain a conſidera⯑ble Surplus in the Hands of private Men every Year, to be inveſted again: And if no New Funds are erected, there will be more Buyers of the Old ones.

This naturally gives an Advance to what we call Publick Credit, and tends to leſſening the Rate of Intereſt.

For ſo long as the Publick Debts or Funds are in Reputation, and carry an Advance of Price, they are equal to ſo [6] much Money, and are to be conſidered as ſo much real Caſh; at leaſt whilſt Books are open for their immediate Transfer when ſold.

What Influence then hath ſuch a Bulk of Money, with reſpect to Land or Trade?

As for Trade, it need only be ſaid, that Plenty of Money is the very Life of it; and alſo as it influences the Rate of Intereſt, by which means the Nation is enabled to carry on its Commerce in ſome meaſure equal with its Neighbours.

But what reſpect hath this to Land?

It is not many Years ago, ſince an un⯑happy Diſtinction was ſet on Foot, be⯑tween the Landed and the Money'd In⯑tereſt; from whence ſtrange Notions have been from time to time advanced, to the great Detriment of both.

Whereas theſe two Intereſts are ſo mix'd and blended together, that they muſt be equally regarded by every one that would purſue the true Intereſt of his Country.

[7] In former Times, the Value of Land was reckon'd by the Quantity of Cattle, or of Corn that it would produce; and is ſo ſtill in ſome Northern Parts.

But ſince Trade hath been carry'd on in all the Kingdoms of Europe, and by that means great Quantities of Coined Money have been every where current, and more eſpecially in England; the true Value of an Eſtate in Land, as well as all other Things, is only known by the Sum of Money it can be ſold for.

This Value will always vary, according to the Plenty or Scarcity of Money.

He that recollects and compares the preſent Value of the Landed Eſtates in England with what they were Fifty Years behind us, will certainly find a very great Difference.

Four Years Purchaſe will amount to more than Fifty Millions. For no Body will ſuppoſe the Land-Tax to be the trueſt Rule to go by in ſuch Computati⯑ons as theſe.

[8] And not only the Value of a Landed Eſtate is thus increas'd, by the Plenty of Money, but the Improvement of that Eſtate is alſo much enlarged, and the Rents advanced.

For as the Product of Land is more or leſs, according to the Stock that is em⯑ployed upon it; ſo will that Stock natu⯑rally increaſe, if Money be ſtirring, and Intereſt at a low Rate.

If therefore the Value of Land be thus mended by the Plenty of Money, and this Plenty ariſes by the Increaſe of Pub⯑lick Credit;

It will follow,

That if Publick Credit be depreſs'd, the Value of Land will ſink in ſome Proportion.

And no Violence can be offer'd to what is call'd the Money'd Intereſt, but what will alſo affect the Landed Eſtate.

Publick Credit Four Years ago was at a very great Streight, and though legal Intereſt was then at Five per Cent. yet [9] Publick Debts that carried but Four per Cent. were ſold at Par, and ſome of them at more.

There was then a hopeful Opportunity for leſſening the Publick Debts; and very eaſy had it been to have reduced the Inte⯑reſt from Five to Four per Cent. which was the true Way to have put the Publick Funds upon the Foot of diſcharging them⯑ſelves by their own Annual Surplus.

Which Surplus would have increaſed every Year, and by that means have ſtill given a greater Value to the Funds, and affected the Rate of Intereſt, and conſe⯑quently have rais'd the Price of Land in ſome Proportion.

This was the Opinion and Advice of Men, who were then thought to have ſome Knowledge in the Affairs of Pub⯑lick Credit.

But this Advice was rejected; and a Scheme put into the Hands of ſome Am⯑bitious and Avaritious Men then in Pub⯑lick Station, who puſh'd it through the laſt H [...] of C [...]ns with impetu⯑ous Violence, and ſupported it with the Grant of exorbitant Powers.

[10] Which Powers had never been obtai⯑ned, without the additional Aid of ſome in the Landed Intereſt, who were drawn in (ſome of them very innocently) by the Lucre of fictitious Stock; by which they were given to underſtand, That if the Project could be carried through, they ſhould be great Gainers; if not, they could be no Loſers, for they were to disburſe no Money.

Strange it is, that ſuch Powers ſhould ever have been put in the Hands of Men, who had given no great Proof of their Knowledge in Buſineſs relating to Publick Credit, and ſoon diſcovered themſelves in the Execution of thoſe Powers they were intruſted with.

Powers, by which all Men were in⯑vited and encouraged to become Game⯑ſters, or to hazard their Eſtates in an un⯑circumſcribed Lottery.

And the common Creditors of the Publick were in a manner conſtrained to bring in their Annuities, for fear of the exorbitant Power given the South-Sea Managers, to lock up their Eſtates during Pleaſure.

[11] But whereever the Fault may be laid; whether on the wild Attempts of the South-Sea Directors in the Execution of their Scheme, or on the Want of pro⯑per Care in thoſe who ought to have ſu⯑perviſed the Management, or on the In⯑fatuation that ſpread by degrees over the whole Nation:

Or whether the Fault muſt be laid on all theſe put together: The unhappy Event was, that it ſoon brought Ruin on many great Families; and Numbers of in⯑nocent deluded People were reduced, from a comfortable way of Living, to Poverty, Priſons, and Exile; to ſee their Families periſh for Want of Bread, and themſelves to end their Days in Sorrow.

Could a perfect Liſt be made of theſe unhappy Sufferers, what a diſmal Ca⯑taſtophre would it appear to future Ages!

Whilſt at the ſame time, Stock-Jobbing Brokers, and Common Gameſters, were put in a Capacity of leaving vaſt Eſtates to their Poſterity.

And this Scheme did not only undo private Families, and bring Confuſion on our Commerce, to its inconceivable Da⯑mage; [12] but it alſo brought the State it ſelf into the utmoſt Danger.

Happy was it for us, that but few did know that we were ſo near the Brink of Ruin.

For the South-Sea Managers, from mi⯑ſtaken Notions about Exchequer Bills, would needs imagine, that the taking this Branch of Credit into their own Hands, would be of vaſt Service to them.

But when the Shock came, their Error ſoon appear'd; for the Exchequer was drained of Specie, and no ſuitable Pro⯑viſion made for circulating the Exchequer Bills.

For want of which, the very Founda⯑tions of current Credit were like to have been blown up, and a total Stop of all Payments muſt ſoon have follow'd.

Such a Diſtreſs, when the Minds of Men were agitated with Fury, Violence, and Deſpair, might have thrown the Na⯑tion into an Abyſs of Miſery.

[13] And it was an unhappy Circumſtance at that Time, that His Majeſty's Affairs requir'd his Preſence abroad.

However, the Few that were left at Helm interpoſed with their ſeaſonable Advice and Aſſiſtance; and perhaps upon a ſtrict Review it will be found, that no⯑thing elſe but ſuch a Jumblement of va⯑riegated Meaſures, as were then purſued, could have preſerved Things in any to⯑lerable Order.

The Reflection on this unfortunate Scheme is the more melancholy, becauſe it was eſtabliſhed in Oppoſition to ano⯑ther, that was then thought by impartial Men to be much more advantageous for the Publick.

A Propoſal was forced from the Bank; for by the South-Sea Scheme it plainly appeared, that nothing leſs was intended than a Demolition of that Corporation.

The Propoſal that thus came to be of⯑fer'd by the Bank, was founded on a plain natural Scheme of the low Rate Intereſt was then reduced to.

[14] For it may be remember'd, that at the Time of their Propoſal, the Annuities which carry'd 5 per Cent. Intereſt, and thoſe which carry'd but 4 per Cent. were much about the ſame Value at Market.

The Reaſon of this was plain, thoſe at 5 per Cent. expected to be paid off by others, who were willing to advance the Money at 4 per Cent.

And therefore the 20 per Cent. offer'd by the Bank as a Proemium, was nothing more than what the Poſſeſſors of the An⯑nuities were willing to part with.

Or it may be thus ſtated.

There was then a general Diſpoſition to write the Annuities into Bank Stock, at the Rate of about 50 per Cent. Ad⯑vance; Twenty of which was to be given to the Publick; the other Thirty being added to the common Stock of the Bank, would have enabled them to con⯑tinue their Dividend of 7 per Cent. for many Years.

Which Dividend would in all com⯑mon Events have ſupported their Stock at a higher Price.

[15] And there is no doubt, but as Things then ſtood, the Bank would have carry'd through their Propoſal without any great Difficulty; notwithſtanding the dark In⯑ſinuations to the contrary, by ſome who have never yet thought fit to offer their Objections in publick.

Some indeed have imagin'd, that if the Bank's Propoſal had been eſtabliſh'd, they would have run into the ſame Meaſures, or have been driven at leaſt, by the warm Heads of thoſe Times, to the ſame Exceſſes that the South-Sea fell into.

But this was impoſſible:

Becauſe the Bank in their Propoſal had fix'd a Rate for all the long Annuitants that would come in—And would cer⯑tainly have ſet a propottionable one for the ſhort Annuities.

If Stock therefore was to be had at one certain Rate for ſo great a Sum as both Sort of Annuities amounted to, there could be no room for ſuch extravagant Attempts.

[16] The Propoſal of the Bank was indeed accepted; and that it was afterwards ſet by, is owing to ſome Men then in Power, who in a very extraordinary manner ob⯑tain'd Leave for the South-Sea Projectors to amend their Scheme.

This was the fatal Miſtake.

For in the Interim, the Men who were infatuated with their Project, and full of Miſſiſſippi Notions, imagin'd with them⯑ſelves, that they might ſafely venture to outbid the cautious Men of the Bank.

Not conſidering, that their Propoſal was founded upon the Lowneſs of Inte⯑reſt, which was not poſſible to be main⯑tained without the neceſſary Methods of managing Credit; and theſe were not like to be compaſs'd but by a Bank, when in the Height of Reputation.

It is true, the Bank may be ſaid to have run ſome Hazard in their Propoſal, had any unhappy Accident fallen out during the ſhort Space in which it was to have been perfected.

[17] But as the Event hath been, that Tran⯑quillity hath attended our Affairs Abroad, it ſeems moſt probable, that they would have compleated the Propoſal on their Part.

Which would have been followed with Peace at Home, and prevented Plots and Conſpiracies, founded upon the Diſcon⯑tents of unhappy Sufferers in the South-Sea.

And alſo at this Day have leſſen'd the Publick Debts near one Sixth Part.

But whether any ſuch Scheme, how⯑ever profitable for the preſent, was real⯑ly fit to be eſtabliſh'd, is not the Subject of theſe Conſiderations.

Be that as it will, the Opportunity is now loſt, and we are left to conſider of proper Meaſures for maintaining publick Credit, which of late hath begun to re⯑vive.

This is not effectually to be done, but by leſſening the publick Debt; for with⯑out ſome rational Proſpect of that, Men's Hearts will fail, the Opinion of publick [18] Security will languiſh, and its Value di⯑miniſh.

Schemes and Projects we have ſeen, and the Miſchiefs that have attended 'em; it will be time therefore to return to the ſafe Method; and That is the Lowering of Intereſt.

Not by Force or Violence; no, nor by Coercive Laws; but by a regular, ſteady, careful Attendance to its own natural Motions.

If Intereſt ſhall ſettle but at the Rate it was four Years ago, there would then be a fair Expectation again, that the Funds appropriated to the Publick Debts, will, in Proceſs of Time, diſcharge themſelves by a gradual Increaſe of the yearly Sur⯑plus.

And for the future Support of Credit, it may be uſeful,

That there ſhould be repeated Decla⯑rations, and firm Reſolutions to maintain Publick Faith.

And that the annual Expence of the Publick be reduced as far as ever the Ne⯑ceſſity [19] and Safety of Affairs will per⯑mit.

And alſo, that the Funds already eſta⯑bliſh'd, be managed with the utmoſt Fru⯑gality, Probity, and Application.

This laſt is a wide Field, and many Things readily offer themſelves, which cannot be crowded in here; 'tis ſufficient to ſay, there's room enough for impro⯑ving the Duties, and leſſening the extra⯑vagant Charge in Collecting.

'Tis therefore humbly offer'd to the Conſideration of Gentlemen, to conſi⯑der how far their own Intereſt is con⯑cern'd in the Preſervation of Publick Credit.

The Value of their Eſtates will be af⯑fected with its Riſe or Fall.

And ſuppoſing the Publick Debts to be 50 Millions, and that Cum ſhould not be One Sixth Part of the Landed Eſtates, their Damage in caſe of any publick Cala⯑mity, will in ſome meaſure be proportio⯑nable; for though One may loſe his Whole, and the Other but his One Sixth, yet in one ſenſe their Loſs will be equal.

[20] Thus, Sir, I have laid before you ſome Thoughts, that poſſibly may be of uſe to you in future Debates.

It muſt be own'd, 'tis a vaſt Debt we have to encounter with.

If we look back to the Revolution, and ſuppoſe at that time any one ſhould have affirmed, That in about Thirty Years the Subjects would pay above 150 Millions in Taxes, and that yet a Debt ſhould remain of 50 Millions more, it would have been thought utterly impoſſible.

'Tis indeed amazing, to think that wiſe and great Men at the Head of Affairs, ſhould from time to time have run the Nation into ſo great a Debt.

This, with all the Obſervation I could ever make, ſeems to be owing to the frequent Change of Miniſtries in the late Reigns;

Who, by ſhifting Hands, and new Friends, never fail'd to eſtabliſh New Funds, and create New Debts for their preſent Purpoſes.

[21] And it is pretty much owing to the ſame Cauſe, that there never was any ſuitable Enquiry into the Miſapplication of Publick Money, nor the many Frauds, by which the Publick Debts have been ſo much increaſed.

Thoſe Commiſſions generally ended in ſome Jeſt or other; and ſerv'd chiefly to gratify the Paſſions of one Party in Op⯑poſition to another, without producing any real Good to the Publick.

It may be thought by ſome, that it is not yet too late to enter upon ſo good a Work; but there have been ſo many Acts of Indemnity, and our Laws are ſo ten⯑der with reſpect to Property, eſpecially when it hath been once alienated, that it is vain now to expect any Publick Ad⯑vantage by ſuch Enquires.

He that would undertake any Part there⯑in, will get nothing but Envy and Malice to himſelf, and little or no Profit to the Publick.

Another Cauſe I know is aſſigned for this great Debt, which was chiefly accu⯑mulated in the laſt Reign; and that is, That France being preſs'd with the War, [22] extended, or rather forced Paper Money to a prodigious Length; and this obliged England, as well as other of the Allies, to ſtretch their Credit.

But they ought to have conſidered, that France by its D [...]ck Power could reduce thoſe Debts, as we find they have done, but not without the Impoveriſhment of their People.

We have now indeed an Opportunity of plowing with their Heifer; but thoſe Methods are ſo contrary to the Liberties of our happy Conſtitution, that nothing of that Nature can be attempted, without Hazard of the utmoſt Confuſion.

If then we muſt remain with this hea⯑vy Load upon us, let us make it as uſe⯑ful as we can.

And if it will tend to the multiplying our Money, or that which is near equal to it, and thereby enrich our Land, and increaſe our Trade, let us improve it to theſe Ends.

I am ſenſible that many are frightned with the Apprehenſion of great Difficul⯑ties, ſhould we fall into any open War.

[23] Yet I think that this Heap of Publick Credit, may, by a right Management, be render'd not only uſeful, but highly ad⯑vantageous in caſe of any defenſive War; and I have no Notion of any other.

But as I hope ſuch a Calamity is far diſtant from us, I will not trouble you with any thing on that Subject.

I had thought alſo to have deſired your Aſſiſtance in preventing Miſchiefs by Stock-Jobbing; but when I conſider how that Gaming Vice has tinged our Morals, I am afraid the Times will not beat an adequate Remedy.