PROJECT 
 
 FOR THE CRBATION OF ^ 
 
 SOUND PAPER CURRENCY, 
 
 BASED ON THE SECUHITY OF 
 
 VESTED 1 A GOVERMEiST COMMISSION, 
 
 BANKING COMPANIES TO ISSUE NOTES OE 
 LEGAL TENDER 
 
 TO THE VALUE OF ALL PROFEUTY SO DEPOSITED, 
 
 WHICH NOTES, THUS PROTECTED. SHOULD BE A SAFE MEDIUM FOR HOME 
 CIRCULATION, TO REPRESENT TRANSACTIONS OF 
 
 €val)(e, #lanufactttrcsi, anU ^sviculturc, 
 
 PUEGHASE AND SALE, 
 
 IN ALL RESPECTS AS SECURE AS A METALLIC CURRENCY, 
 
 ■WHICH SHOULD, THENCEFORWARD, ONLY BE REQUIRED 
 TO DISCHARGE OUR ADVERSE 
 
 FOREIGN BALANCES 
 
 COMMERCE OR OF TREATY, 
 
 WHENEVER SUCH SHOULD ARISE. 
 
 CHELTENHAM : 
 
 FEINTED BY T. WILLEY, OXFOKD PASSAGE 
 
 MDCCCXLVII. 
 
P E 0 J E C T 
 
 THE CHEATION OF A SOUND PAPER 
 CURRENCY, &c. 
 
 It will, I apprehend, on all hands be allowed, 
 that an extended money-circulation is favourable to 
 the production of real wealth, which may be truly de¬ 
 fined as an abundance of such things as are essential- 
 first, to the sustenance of man,—next, to promoting his 
 social comforts, gratifications and enjoyments,—and 
 lastly, to the more exalted requirements of intellect, 
 of knowledge, and of that highest order of utility, of 
 scientific attainment, of refinement, and of elegance, 
 which consists in a happy combination of both, with 
 the means of calling their conceptions into existence. 
 The productions of the earth, whieh are given by the 
 blessing of God to the labor of man, constitute the 
 basis of wealth. These productions are the foundation 
 of Commerce, of Manufactures, of Arts, of all the 
 applications of Science; and in those various modifica¬ 
 tions, may be said to constitute the Wealth or Property 
 of the World. From these arise all that can satisfy 
 the many legitimate wants and desires of human nature 
 generally, as well as all that can conduce to the pomp, 
 the elevation, the aggrandisement, the majesty, of the 
 most exalted relative positions of man in this his 
 earthly stage of being. 
 
 But as the different nations of the earth produce 
 different fruits, varied by soil, by climate, by situation 
 
4 
 
 and by culturej so it is necessary, for the purposes of 
 Commerce, in the interchange of those commodities, 
 to establish some general standard, recognised by all, 
 to represent the value of property; and, from the 
 earhest ages to the present moment, the precious 
 metals of gold and silver, from their incorrodible quality, 
 their inapplicability to the ordinary purposes of life, 
 their great scarcity, and the difficulty of obtaining 
 them, have been fixed on by all the various families of 
 man as best suited to constitute that substitute or re¬ 
 presentative. The increase or discovery of those pre¬ 
 cious metals, however, not having kept pace with the 
 increase of population, and^hat civilization which, by 
 cultivating, organizing and directing, the mental and 
 physical resources and producing powers of man, have 
 increased the Wealth of the World to an almost incal¬ 
 culable amount, it became necessary to appoint some 
 additional substitute for its representation, and accord¬ 
 ingly a system of Banking was introduced, by which 
 an issue of promissory notes to stand in aid of Gold 
 and Silver was adopted: thus, to facilitate the opera¬ 
 tions of trade, necessarily contracted by the non-expan- 
 sive—almost fixed—nature of the metallic circulating 
 medium, as contrasted with the rapid creation and 
 extension of property. 
 
 Having arrived at this point of general observa¬ 
 tion, I shall now confine my farther remarks to Great 
 Britain; she, who, blessed with the free and uncon¬ 
 trolled use of the revealed Gospel of God, has founded 
 her laws on its precepts, and thence obtained by the 
 blessing of that God whom she serves, and through 
 the operation of that divine revelation, free and equal 
 institutions, respect for moral and for social order. 
 
5 
 
 obedience to those laws which her people have them¬ 
 selves enacted on the highest and most holy principle 
 of even-handed justice, and to the Government by 
 which they are administered, unceasing and indomi¬ 
 table perseverance in the combined application of 
 Science, of Mechanism, and of Labor to all the prac¬ 
 tical purposes of life, thereby accumulating a degree of 
 wealth, {id est of the necessaries, the luxuries, and the 
 refinements of life,) far beyond her consuming powers, 
 the excess of which being disposed of to Foreign 
 Nations, has obtained for her children the free and 
 common use of all the most desirable productions of 
 the Earth, has extended her Commerce to every part 
 of the known World, and planted her Colonies and 
 established her dominion in every quarter of this 
 habitable Globe, rendering her an object of admiration, 
 and her institutions a subject of study for all Countiies, 
 Nations, and Languages. 
 
 In this high and proud position, in this daily 
 increase of Wealth, arising from the fertility of her 
 soil, the active intelligence of her people, the widely 
 extended speculations of her merchants, all stimulated 
 into increased action, by the fostering patronage of the 
 great and noble in the Land, it becomes a matter worthy 
 of the deepest attention to provide a safe circulating 
 money medium, of sufficient expanse to represent this 
 vast accumulation of property, and to give facility to the 
 exchange or interchange of its various commodities, 
 which, taken as a whole, or in detail, may be said to 
 present a never-ending chain of varying and gigantic 
 operations. 
 
 It is evident that all balances of account, of trade 
 or of treaty, due by us to foreign states must be paid 
 
6 
 
 in Gold or Silver, those metals being the acknowledged 
 standard of value between nation and nation: it is 
 therefore of some importance in this examination of 
 facts, to ascertain the means possessed by Great Britain 
 to obtain so great a quantity of this universal repre¬ 
 sentative of value, as her home and her foreign 
 demands may require. 
 
 The produce of such Blines as she possesses in 
 her widely-extended territories, supplies but a small 
 portion of her necessities in this respect; the residue 
 must therefore be obtained by trading balances accru¬ 
 ing in her favour from foreign nations, by such 
 payments as may be secured from them to her by 
 treaty, or by the direct purchase of ore, or bullion. It 
 thus seems clear that it will be the interest of Great 
 Britain, to give the greatest facilities of trade to such 
 countries as annually consume the largest portion of 
 her produce, in excess of what they fm-nish to her of 
 theirs, thus supplying sinews to her foreign trade, and 
 giving her a preponderance of that universal medium 
 of payment acknowledged by the World. 
 
 The converse will apply to Countries, which in the 
 progress of trade, supply to her a larger portion of 
 their produce than they receive of hers, so as to require 
 a portion of the precious metals to make up the respec¬ 
 tive balances, thereby draining her coffers of that 
 source of strength in the Commerce of Nations which, 
 in her position, as not being possessed of any very 
 productive gold or silver mines, can be only restored 
 by an increased profitable extension of exports,—a 
 remedy not always practicable. 
 
 Having thus shown the result of cause and effect 
 on our foreign commercial relations, I now come to 
 
examine liow they mutually act on the operations of 
 our home trade: in no country of the known world 
 do the general mass of the people enjoy more freedom of 
 opinion, more equal rights, more protection for property, 
 more encouragement to industry, more general par¬ 
 ticipation in the necessaries, the comforts, the luxuries, 
 the refinements of life, or more facilities for rising by 
 the useful exertion of intellect, intelligence, or talent, 
 from the middle (or indeed the humblest classes of 
 society,) to mingle with those of exalted rank and 
 station, than in Great Britain; and in no country in 
 the world do the untameable exertions of the people to 
 create general wealth, to advance their individual 
 position, to promote obedience to the laws, and respect 
 for the governing powers of the country; to shew by 
 their enjoyment of them, their appreciation of the 
 comforts derivable from honest labour, to provide for 
 those who, by misfortune or by the stroke of the Most 
 High, may be rendered incapable of earning their own 
 bread, to defend the high privileges of their native 
 land, to preserve and to perpetuate the blessings of 
 real freedom to all their dependencies, to protect their 
 possessions and vindicate their rights by deeds of high 
 and noble daring, to extend with undaunted courage 
 the blessings of civilization, of liberty, and of commerce 
 to all the nations of the earth;—I say in no country of 
 the world do these lofty and ennobling qualities shine 
 forth more conspicuously than in the glorious sons of 
 Britain. 
 
 The people of Great Britain are a consuming 
 people: every family possesses and enjoys its modicum 
 of comfort and of luxury. 
 
 In the rural population each family consumes the 
 
produce of the manufactures, of all descriptions, as well 
 as imported luxuries of foreign growth according to its 
 ability, and gives in return the most useful produce of 
 the soil, thus establishing a reciprocity of dealing most 
 advantageous to the Farmer, to the Merchant, to the 
 Manufacturer, to the Shopkeeper, and to the Artizan, 
 who receive by this means mutual and inexhaustible 
 support one from the other, and thus united, resemble 
 the course of a mighty and majestic river, rolling its 
 broad waters in an unceasing flow, with a continuous 
 renewal of those that had passed away, and with 
 increase rather than diminution of its ample volume. 
 
 It is, I believe, an incontrovertible fact, that the 
 trade arising from our home and colonial consumption, 
 not only of home and colonial produce, raw and manu¬ 
 factured, but of foreign imported luxuries, exceeds to 
 a very considerable extent in amount, that resulting 
 from our export traffic with all the world besides; this 
 being the case, it is evident that the balances accruing 
 from our foreign trade, and payable in the precious 
 metals, can furnish but a small proportion of the circula¬ 
 ting representative of value required to carry out our 
 home transactions, and that our entire obtainment of 
 those metals from aU the sources of supply at our 
 command, must be wholly insufficient as a medium to 
 represent the increasing value of our home trade, con¬ 
 sisting in the daily developement of wealth, by the 
 pereevering intellectual, scientific and manual labors of 
 the British People. A sound and stable standard of 
 value, of a progressively expansive character, to repre¬ 
 sent this development of wealth, must give a decided 
 impulse to its rapid increase, and furnish a means of 
 advantageously employing the entire population of 
 
9 
 
 Great Britain, Ireland inclusive, wMch last country 
 presents a wide field for improvement in the yet un¬ 
 developed fertility of a large portion of her soil, the 
 native security of her harbours, the extent of her water 
 power and of the fishing grounds on her coasts, joined to 
 a population sufficiently extensive to turn those natural 
 advantages to good account, through the medium of its 
 labor, well and judiciously directed. I shall now proceed 
 to show how such a standard may be created, based on 
 the real property of the country, as contradistinguished 
 from its floating capital. 
 
 Land, in the first instance, may be defined as real 
 property: investments in the Public Funds, (not foreign,) 
 partake of the same character, as do likewise India 
 Bonds, at par, shares in some of our best Railways, 
 also at par, in short aU such investments as are of 
 cknowledged intrinsic value, and which under any4, 
 circumstances may be easily convertible into Money. 
 
 I would propose a Commission to be appointed 
 by the Crown with powers to license banks for the 
 issue of promissory notes, on the basis of —real property 
 to the amount of the license granted being placed 
 tangibly in the power of the Commissioners, so as to 
 guarantee to the public the security of those notes, 
 which, so protected, should be of equal value with 
 Gold, to represent all our domestic exchanges of pro¬ 
 perty. 
 
 The principle on which such companies might be 
 established should be thus:—suppose a man of landed 
 property, for hypothesis say £2,000 f-annum, (such pro¬ 
 perty being worth twenty years’ purchase under any 
 change of circumstances,)—he may be licensed to 
 issue notes to the amount of £40,000; another man 
 
10 
 
 joins him -who has, say £20,000 in the Government 
 Funds; a third, £10,000 in India Bonds; a fourth, 
 £10,000 in GreatNorthem and Western, Great Western, 
 or any other equally productive and established rail¬ 
 way shares, all at par value: those parties combined 
 apply to the Commissioners^ whose business it wiU be 
 to ascertain that the landed propeiiy is clear of any 
 former lien, and in the power of its owner to convey ; 
 and likewise of aU the other securities that they are 
 lona-fide capable of being conveyed to the Government 
 as a guarantee for the repayment of the notes about to 
 be issued; and loJio, when aU this is clearly established 
 and proper conveyance made, wiU license those parties 
 as a banking company to issue promissory notes to 
 the amount of £80,000: each note, of whatever value, 
 should bear a certain stamp, which may be arranged 
 as a ^ centage, but classified so as to suit notes of all 
 amounts and the produce of this stamp duty would, 
 besides being a check on the issue, form a legitimate 
 item of public Revenue. While the property would be 
 thus rendered available for public accommodation, the 
 owners should each draw his income uninteiTuptedly. 
 The Landed Proprietor should receive his rents of 
 £2,000 ^ annum, the Fund-holder, the India Bond¬ 
 holder, and the Railway Share-owner them respective 
 dividend^and also enjoy the profits to be derived from 
 the power thus given of converting their property into 
 a sound circulating medium: suppose the bank to 
 clear 4 p- cent, p annum, the Landed Proprietor would 
 add £1,600 p. annum to his income, and the others 
 increase theirs in a like proportion, while their estab¬ 
 lished property would be converted into a means of 
 promoting enterprize in sound commercial speculation. 
 
11 
 
 and of freeing its operations from those periodical 
 pressures, those derangements of established con¬ 
 fidence, those forced failures of sound and healthy 
 undertakings, those usurious, and therefore injurious 
 exactions of money holders which are calculated to 
 swamp the industrial portion of the community, to 
 render nugatory their best directed efforts, to take 
 from our Artizans, our Operatives, and our Laborers 
 their very means of existence, and to paralyze the pro¬ 
 gress, of national strength, by suspending the creation of 
 national wealth, which uniformly flows from the con¬ 
 tinuous employment of the people. The correction of 
 all those evils must be considered as a desideratum, 
 and would undoubtedly result from the adoption of the 
 principle above laid down, viz., the giving pow'er for 
 converting the real property of the country into a 
 medium of home circulation, to represent all the varied 
 transactions of our home traffic and commerce. 
 
 The above is an individual example illustrative of 
 the principle recommended, and is capable of being 
 extended to meet the fullest requirements of the 
 Country. Notes so secured may be to all intents and 
 purposes a safe legal tender, and may be exchanged 
 by the bankers or their customers at Her Majesty’s 
 Mint for Coin, or at full value for Bullion, whenever they 
 might require to make remittances for foreign pay¬ 
 ments. 
 
 Under this system, pound notes would answer all 
 the purposes of sovereigns for our home transactions, 
 and the value of notes issued might vary, so as to suit 
 the purposes of trade, pound notes being the minimum 
 tender. All money received from Foreign States, 
 in payment of trading balances, wmuld naturally be 
 
12 
 
 bankedj as is now practised, and would thus be avail¬ 
 able again for foreign remittances. 
 
 "l^enever the balances of trade run in our favour, 
 which should always result from sound commercial 
 relations with other States,, gold will abound in the 
 coimtry; on the contrary, when they determine against 
 us gold must be obtained, no matter at what price or 
 inconvenience, for their discharge: it therefore follows 
 as an inevitable consequence, that the necessity of 
 keeping a certain large quantity of gold in the daily 
 circulation of the country, in the face of an arbitrary 
 commercial demand for it, must give the holders of 
 that commodity, whether foreign or domestic, an equally 
 arbitrary power to obtain any price they may choose 
 to ask, to the utter annihilation of the profit of those 
 merchants whose payments must be necessarily made 
 through that medium; nay, those bullion holders have 
 recently, on the occasion of the late famine, had ample 
 opportunity to appropriate to their own coffers, not 
 only the just reward of merchants’ enterprize, but the 
 amount of Crown Duties, which, though reduced with a 
 view to confer a boon on the famishing consumer,—(if 
 continued to be levied, they would have gone into the 
 nation’s treasury to the relief of taxation,) yet were, 
 under the circumstances, diverted from both those 
 purposes, to feed the all-absorbing aggrandizement of 
 the BuBionist. Those consequences were undoubtedly 
 aggravated by the operation of the Banking Act of 
 1844, which, though intended to give security to the 
 paper currency, and calculated, during a time of the 
 nation’s prosperity, to produce that effect; yet, when a 
 pressure came, caused by an export demand for bullion, 
 had also the effect of contracting the paper in a pro- 
 
13 
 
 portion with the metallic currency, and of thus extend¬ 
 ing to the home trade the evils affecting the foreign; 
 rendering it impossible to make property available to 
 meet engagements unless at an enormous sacrifice, 
 and giving to the holders and makers of paper money 
 a similar power with that possessed by the Bullionist, 
 to enrich themselves unduly at the expense, and in 
 many instances by the ruin, of the trading portion of the 
 home community. 
 
 The present depreciation of public as well as of 
 private securities, the difiiculty to meet engagements, 
 which in many recent instances has led to the suspen¬ 
 sion of houses of long standing and high character, 
 and holding property over 20^. in the pound of their 
 engagements, the temporary stoppage of manufacturing 
 employment and of railway works, the languor and 
 uncertainty thrown over the industrial pursuits of the 
 people, and at this moment pervading every branch of 
 Trade,—all those attest in the strongest manner the 
 justice and the truth of the above observations. 
 
 It may hei’e be worth considering whether the act 
 above alluded to, and which has been said to cause, 
 or at least to aggravate, the evils of the present crisis, 
 contains within itself that self-regulating principle 
 which guarantees to the Note-holder, under all circum¬ 
 stances, the value of five sovereigns for his five pound 
 note, in recompence of the disastrous results caused 
 by the irregular contraction of the currency. To elu¬ 
 cidate this point, I shall put a few queres in allusion to 
 existing Banking Companies, (including the highest in 
 the Empire,) and to the principle which I recommend 
 to introduce for the public security, leaving the solution 
 to my Readers. 
 
14 
 
 Firstj—^Is there at present actual property consist¬ 
 ing of Land, Government or other as solvent Securities 
 in the power of Government, of equal amount with the 
 notes issued, to guarantee the pubhc as to their repay¬ 
 ment? if not, ought there not to he, in order to constitute 
 those notes a safe legal tender ? 
 
 Second,—Ought not the notes of all banks, with¬ 
 out distinction, which shall convey to the Govern¬ 
 ment security as above, to the amount of then’ licensed 
 issue, to be accounted aa legal Tender ? 
 
 Third,—^Is it not likely that a sufficient number 
 of banking companies would be formed on this principle 
 of conveyance of property, (which, while it rendered 
 the notes perfectly secure, would give to the bankers 
 a double income: viz., that of their property and that 
 of their banking profits,) to meet all the most extended 
 requirements of our creatioa of wealth and transfement 
 of property at home ? 
 
 Fourth,—Would not a steady and safe fixed circu¬ 
 lation, not liable to be affected by the forced speculations 
 of large capitalists, in capricious expansions and con¬ 
 tractions of the currency, for their ovui private 
 advantage, tend to the increased production of all 
 commodities, establish a steady home consumption and 
 give a much greater quantity for export, secure 
 remunerative employment for all classes of the people, 
 promote an influx of the precious metals by safely 
 stimulating our foreign trade, and in short, add to the 
 permanent greatness and prosperity of the country ? 
 
 Fifth.—Ought not £5 p- cent. p. annum be con¬ 
 stituted the legal rate of interest or discount, as quite 
 sufficient remuneration for an idle lender of money, 
 (whether gold or paper,) and as much as an industrious 
 
15 
 
 man ougM to pay in justice to the consumer, to the 
 artizan or labourer employed by him in his particular 
 branch of trade, and to the just reward of his own 
 enterprize ? 
 
 To facilitate the working of this principle, and to 
 enable Partners in Banks so constituted to withdraw 
 their property at pleasure, the capital might be 
 formed into shares, each share to represent a certain 
 amount: those shares might be disposed of in the 
 market, in like manner as shares of other companies; 
 but the purchaser should invariably convey property to 
 the Commissioners equal in amount with the shares 
 purchased, at the time of making the transfer; thus 
 the security to the public would still be upheld, and 
 the original or the secondary proprietor would, at 
 pleasure, have the power to convert his shares into 
 money, should he feel disposed to do so. In like 
 manner the owners of securities thus conveyed, might 
 have power to change the investment into any other 
 funds that might promise better, but always under the 
 control and with the sanction of the Commissioners. 
 
 It would not be indispensably necessary to form 
 large Companies for wmrking out this project; either 
 limited or extensive partnerships might be formed, or 
 license granted to individuals to issue promissory notes: 
 the only requisite qualification would he, the con¬ 
 veyance of real unencumbered property to the 
 Government, of an amount equal to the license for 
 issue of notes sought to be obtained. 
 
 It may be supposed that the repeal of the Small 
 Notes’ Aet, which made gold the circulating medium of 
 sums from one to five pounds, would leave room for the 
 purchase of our gold coin by foreign Speculators, and 
 
16 
 
 thus remove it from the Kingdom. To this I answer, 
 that coin so removed must he paid for by Bullion; and 
 that our mint price for Gold can always be so regulated 
 as to impose a salutaiy check on any speculative ex¬ 
 port of our coin. Foreign balances accruing due by 
 us, no matter on what account, must, we know, be 
 paid for either in Coin or in Bullion; and the quantity 
 in actual circulation at home, can in no wise prevent it, 
 though it may cause, and has, during the past year 
 caused, very serious fluctuations of value, and enhance¬ 
 ment in the price of imported food, to the detriment 
 alike of the importer, the factor and the consumer. 
 Knowing that the subject of currency as connected 
 with banking and with general trade, must in the 
 present session, largely and earnestly occupy the 
 attention of the Legislature. The author of the fore- 
 gomg observations ventures to send a copy of them to 
 each member of the united Houses of Parliament; 
 under the impression that it is the duty of every man 
 in society, (even the humblest,) who honestly supposes 
 that his conceptions may be r^dercd useful to his 
 country, to communicate them in the quarter that has 
 competency to give them practical operation,—and under 
 the conviction that, should they conduce to the 
 prosperity of Great Britain, the British people will not 
 leave his labom-s unrewarded. 
 
 DANIEL DESMOND. 
 
 Cheltenham: 
 
 Isomnler %tth, 1817. 
 
 ■Wilier, Printer, Osftrd Passage, Cheltenham.