Some Considerations of the Lowering of Interest [25]
it home in Specie, and his present need of Money at home is greater or less: In the other, the whole Country has more Money, than can well be imploy'd in the Trade thereof, or at least, the proportion of the Money to the Trade is greater than in the Neighbouring Country, where the exchange is below the Par. For, supposing the ballance of Trade to be equal between England and Holland, but that there is in Holland a greater plenty of Money, than in England, (which will appear by the lowness of the Natural Use in Holland, and the heighth of the Natural Use in England; and also by the dearness of Food and Labour in general in Holland, and the cheapness of it in England.) If N. has Ten thousand pounds in Holland, which the greater Advantage he could make of it in England, either by Use, or Purchase, tempts him to transfer into England, 'tis probable he will give as much to a Merchant in Holland to pay him Ten thousand pounds in England, as the ensurance at that time between Holland and England is worth. If this happen to be in a Country, where the Exportation of Bullion is Prohibited, he must pay the more: Because his Venture, ifhe carry it in Specie, will be greater. And, upon this ground, perhaps, the Prohibiting the Exportation of Money out of England, under Penalties, may be of some use, by making the rate of the exchange greater to those Countries, which Import upon us more, than they Export in Commodities; and so retain some part of the Money which their over-ballance of Trade would carry away from us, though after all, if we are over-ballanc'd in Trade it must go. But, since the Holland Merchant cannot receive N's Ten thousand pounds in Money in Holland, and pay him Ten thousand pounds in England, unless his over-ballance of Trade make English-Men indebted to him Ten thousand pounds in Money, which he is not like to take in Commodities. I think the over-ballance of Trade is that which chiefly raises the exchange in any Country, and that plenty of Money in any Country does it only for so much of the Money as is transfer'd either to be let out to Use, or to be spent there. And though Lending to Foreigners, upon Use, doth not at all alter the ballance of Trade between those Countries, yet it does alter the exchange between those Countries for so much as is lent upon Use, by not calling away the Money, that should follow the over-ballance of Trade, but letting it rest there, as if it were accounted for; all one as if the ballance of Trade were for so much altered. But this being not much in comparison of the general Traffick between two Nations, or at least varying slower, the Merchant too regulating the exchange, and not the Usurer. I suppose it is the present ballance of Trade, on which the exchange immediately and chiefly depends, unless some accident shall make a great deal of Money be remitted at the same time, from one place to another, which will for that time raise the exchange all one as an over-ballance of Trade; and indeed, when examin'd is generally very little different from it. To be able to estimate the Par with the rise and fall of the exchange, it is necessary to know the intrinsick value, i.e. how much Silver is in the Coins of the two Countries, by which you reckon and charge the Bill of Exchange. Sir, If I have been led a little too far from one thing to another, in the consideration of Money, I beg your Pardon, hoping that these Particulars will afford some light to our present Subject. To return to the Price of Land, 'Tis evident by what has been above-said, That the Years Purchase of Land do not increase with the fall of Interest, and the abating that good quality in Money of yielding Yearly Six per Cent. to Four, does not presently so sink its Value, in respect of Land, that One Third more is required in exchange: Falling of Interest from Six to Four, will not raise Land from Twenty to Thirty years Purchase. The rising and falling of the Price of Land, as of other things, depends much on the quantity of Land, set to Sale, compar'd with the quantity of Money design'd for that Traffick,