‘try, it reverts upon the issuer. 
122 
Za the Editor of the Monthly Magazine. 
SER, 
2 fate is NO Opinion more frequently 
hroached in the works of foreigners, 
and the phantasmagoric representations 
oi financiers, than the wealth of England, 
I am unfortunate enough to, think, that 
this opinion is, in avery great degree, 
fanciful, and that what is called the 
wealth of England, is not in much of it 
actual capital, but amefe phantom, com- 
posed of industry and banking. This 
affirmation I shall endeavour to prove. 
Adam Smith establishes a position, 
which has, I believe, not been contro- 
verted, viz. that whenever a_ paper cur- 
rency exceeds the demands of the coun- 
i merely 
make use of this axiom, to prove, that a 
paper currency does arise irom the de- 
mands of a country, if wanted: but is it 
hecessary to prove it. 
We will suppose the industry of a 
country to, be very great, such as that of 
England, and that it is directed to various 
articles of convenience,and luxury. One 
person wants to enjoy these conveniences 
and luxuries; another to have the capital 
to establish the manufactures. Suppese 
it.an infant nation, as ail are at first, and 
to consist only of land-owners. Suppose 
then, to create a capital necessary for 
these respective wants of creation and 
consuinption, a system of banking to 
arise, by means of bills; founded gpon 
the credit of the landed property of the 
bankers; the deficiency of a capital is 
then supplied. Bat though this capital 
passes for wealth, it is nat money ; the 
securities or estates, having no increase 
ot valne whatever, in eousequence of be- 
coming such securities, nor the agricul- 
tural product a grain more. The actual 
wealth consists, beyond the mere stock at 
any time in hand, of nothing more than 
the industry of the inhabitants, and a 
quaniity of paper, which from conf- 
dence, and generai consent to take it as 
money, passes as such, but is of no ac- 
tual value, further than as it can procure 
mouey’s w ‘orth, im goods: in goods, I say, 
for were there no demand “beyond the 
spetie, which dema ad is created by in- 
dustry, and a taste for BSD Ys it would 
revert upon the issuer, and specie alone 
circulate. Suppose this paper ona sudden 
to becume of no value: what remains? 
‘no niore than what just as much existed 
before it was issued: viz. a quantity of 
territory, some specie, and some stock of 
raw or wrought goods, All the aciual 
wealth which this mass of paper repre- 
4 
Paper Currency and the Wealth of England. [March 1, 
sented, is no more than the above 
ss 
phantom, created by the industry and_ 
taste for luxuries, ia the inhabitants: and 
hence it follows, as a corollary, that the 
quantity of current paper, and the ratio, 
in which the banking system prevails, are 
no bad tests of the industry and com- 
merce of a country. 
Suppose a banker employs his money 
in government securities, or advances to 
tradesmen. The principal lent to go- 
verninent is spent, in consumable and 
transient necessaries; and the interest 
alone renders the principal capable of 
being realised in no other form, than by 
transfer, and it circulates, tiil 11 stops, 
where a buyer is content to live upon the 
interest, as estate. If it be advanced to 
tradesmen, it is speut upon consumable 
commodities, or in payment of labour ; 
and there is no capital, beyond the stock 
at any.time in hand, realised. Banking 
augments the powers of the landed peo- 
ple. to spend: and the baukers, by means 
of the governme:t securities, obtain a 
power of spending. sull further ; ; the moe 
ney advanced in a loan is imaginary, be- 
ing only a transfer of old wealth; but the 
new securities, in the form of interest and 
taxes, create a new and imaginary capi- 
tal, and a new power of spending, stil 
further ; and this is probably one reason,’ 
why trade is found co flourish in despight 
of taxes: nothing can he more seli-evi- 
dent, than that every new loan creates a 
new quantity of stock: that what is 
given for the purchase of that loan, is 
- only old wealth, actually existing in the 
country DemOTE but the omnium still re- 
mains mar! ketable, a and through the in- 
terest is the actual creation of a new ine 
come, and, by cousequence of a new 
power in the country of spending more, 
When we are told that the property tax, 
customs, &c. increase, notwithstanding 
our burdens, this is in my opimion one 
reason. 
This species of wealth is, I think, the 
real wealih of England, beyond the Bod, 
stock, and specie. Wherever industry 
is predominant, and a market is open, 
banking generates a capital, and govern- 
ment, by i its necessities, finds out secu- 
rities fer its investment; stil were the 
French to invade Great Britain to-mor- 
row, and take it, the> acqnisition would 
be by no means, what they expected. 
The confidence and the security being 
cone, the powers of spending forty mil- 
lions per annum, which the stockholder 
possesses, all the powers of. spendi 1 
also, derived from the profits of. t 
