Some Considerations of the Lowering of Interest [24]
For the Value of Money in general is the quantity of all the Money in the World, in proportion to all the Trade: But the value of Money in any one Country, is the present quantity of the Current Money in that Country, in proportion to the present Trade. Supposing then, that we had now in England but half as much Money, as we had seven Years ago, and yet had still as much yearly Product of Commodities, as many Hands to work them, and as many Brokers to disperse them, as before; and that the rest of the World we Trade with, had as much Money, as they had before, (for 'tis likely they should have more by our Moiety shared amongst them) 'tis certain, that either half our Rents should not be paid, half our Commodities not vented, and half our Labourers not imployed, and so half the Trade be clearly lost; or else, that every one of these must receive but half the Money, for their Commodities and Labour, they did before, and but half so much as our Neighbours do receive for the same Labour and the same natural Product, at the same time. Such a state of Poverty as this, though it will make no scarcity of our Native Commodities amongst us, yet it will have these ill consequences. 1. It will make our Native Commodities vent very cheap. 2. It will make all Foreign Commodities very dear, both which will keep us Poor. For the Merchant making Silver and Gold his Measure, and considering what the Foreign Commodity costs him (i.e. how many Ounces of Silver) in the Country where Money is more Plenty, i.e. Cheaper; and considering too, how many Ounces of Silver it will yield him in another Country, will not part with it here, but for the same quantity of Silver, or as much as that Silver will buy here of our Commodity, which will be a great deal more than in another place. So that in all our exchange of Native for Foreign Commodities, we shall pay double the Value that any other Country does, where Money is in greater Plenty. This indeed will make a dearness, and, in time, a scarcity of Foreign Commodities; which is not the worst inconveniency that it brings upon us, supposing them not absolutely necessary. But, 3. It endangers the drawing away our People, both Handicrafts, Mariners, and Soldiers, who are apt to go where their Pay is best, which will always be where there is greatest plenty of Money; and in time of War, must needs bring great distress. 21. Upon this Measure too it is, That the variation of exchange of Money, between several Countries, does somewhat depend. For it is certain, that one Ounce of Silver is always of equal value to another Ounce of Silver considered in its Intrinsick worth, or in reference to the universal Trade of the World: But 'tis not of the same value at the same time, in several parts of the World, but is of most worth in that Country where there is the least Money, in proportion to its Trade: And therefore Men may afford to give 20 Ounces of Silver in one place, to receive 18 or 19 Ounces of Silver in another. But this is not all: To this then, (to find out the alteration of the exchange) the over-ballance of the Trade must be taken into consideration. These two together regulate the exchange in all the Commerce of the World, and in both the higher rate of exchange depends upon one and the same thing, viz. the greater plenty of Money in one Country, than in the other; Only with this difference, that where the over-ballance of Trade raises the exchange above the Par, there it is the plenty of Money, which private Merchants have in one Country, which they desire to remove into another: But where the Riches of the Country raises the exchange above the Par, there it is the plenty of the Money in the whole Country. In one the Merchant has more Money (or Debts, which is all one) in a Foreign Country than his Trade there will employ, and so is willing to allow upon exchange to him abroad, that shall pay him ready Money at home, 1, 2, 3, &c. per Cent. more or less, proportionably as his or his Countrymens plenty of ready Money abroad, the danger of leaving it there, or the difficulty of bringing