A Model for erecting a bank of credit; with a discourse in explanation thereof. : Adapted to the use of any trading countrey, where there is a scarcity of moneys: more especially for His Majesties plantations in America. Quo communius eo melius.

A Model for erecting a bank of credit; with a discourse in explanation thereof. : Adapted to the use of any trading countrey, where there is a scarcity of moneys: more especially for His Majesties plantations in America. Quo communius eo melius.

Table of contents

Title page

The Preface to the READER.

§

Of the First, viz. Some things premised 〈◊〉 Introduction, touching Banks in general.

Of the second Particular, viz. The definition of such a Bank.

Of the third Particular, viz. The Constitution of this Bank.

Of the fourth Particular, viz. The necessary Rules to be observed in this Bank.

Of the fifth Particular, viz. The Particular Advantages of such Persons as shall voluntarily deal with the said Partners, in these affairs; which will appear in several Instances.

First Instance.

Second Instance.

Third Instance.

Of the sixth Particular, viz. The answering some few of the most material Pertinent Queries, and Objections touching this Bank, viz.

We shall therefore, for the Conclusion, which is the last Particular mentioned, to be Discoursed, Sum up all, in this general Assertion, viz.

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A MODEL For Erecting a Bank of Credit; WITH A DISCOURSE In Explanation thereof.

Adapted to the Use of any Trading Countrey, where there is a Scarcity of MONEYS: More Especially for His Majesties Plantations in AMERICA.

Quo Communius co Melius.

LONDON: Printed in the Year, 1688. Reprinted at BOSTON in New-England, in the Year, 1714.

The Preface to the READER.

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THE Difficulties, which the Trade of this Province labours under, by reason of the Scarcity of Money, having rendred it necessary that some Expedient be found out to supply that Deficiency: A Scheme of a Bank of Credit founded upon a Land Security, [...] been accordingly Projected; and will be humbly offered to the Consideration of the General Assembly, at their next Session.

Now, in as much as things of this Nature (tho' recommended in Europe, by long Experience of their general Usefulness and Benefit, to the Places where they are Established) yet may be here in hazard of not meeting with that Regard and Encouragement they deserve, for want of a due Information concerning them: And there having been many Years since Printed in London, a Projection of much the same Nature with that prepared here; (tho' not so Beneficial to the Publick, or on so Solid a Foundation,) yet setting forth in a Plain and Familiar way, not only the Nature, but the Feazibleness and Utility of such a Fund of Credit; it was judg'd Convenient to Re-print the same here, that so all Persons might have an Opportunity of gaining an Insight into it: It being rationally Concluded, That such a Bank being made to appear to be of Necessity to us in our present Circumstances, and of great and general Benefit; there is no Publick-spirited Person but will set to his helping Hand, to Promote the Establishment of the same.

Boston, Feb. 26. 1713/4.

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A MODEL for Erecting a Bank of Credit Lumbard and Exchange of Moneys▪ Founded on Lands, Goods, and Merchandizes: To be undertaken and managed by Persons of good Reputation, Prudence and Estates, in a voluntary Partnership, as other Merchantly Affairs: Adapted for the Use of any Countrey, or Trading part, where there is a Scarcity of Moneys; and, in want thereof, they are constrained to Truck, or Barter by Commodities, &c. wherein is Discoursed,

1. Some things by way of Premise, touching Banks in General.

2. The Definition of such a Bank.

3. The Constitution.

4. The necessary Rules to be observed.

5. The particular Advantages thereof, to those that shall voluntarily deal with such a Partnership.

6. Some of the most material and pertinent Queries and Objections thereto, Resolved and Answered.

7. The Conclusion by may of Animadversion, upon the whole: Briefly.

Of the First, viz. Some things premised [...] Introduction, touching Banks in general.

MOney, whether Gold or Silver, is but a measure of the value of other things; yet hath, for a long Succession of Ages (especially in the Civilized and Trading part of [Page] the World) obtained to be the usual, and best known means of Interchange.

This measure and way of Interchange, was originally occasioned by the experimented inconveniences of common Barter; in which way, unless both the Parties dealing, have like occasion, reciprocally, of each others Commodities, the less necessitous Over-reaches the greater, by imposing the price of both, to his own advantage, and the others detriment, which is not equal; nor can there be Equality where there is no common Standard between them.

But, whether the Mines fail, or Men have not been so fore-seeing and industrious to bring in, to most Countreys, a sufficiency of Money or Bullion, wherewith to manage their increasing Trades, or, that Traders, for want of other Returns, have been necessitated, for Balance of the Surcharge of Goods imported, to remit the Coyns of some Countreys into others: Or, for other Causes (not necessary on this occasion to be further inquired into) tis now so hard to come by, in some places, for carrying on of Trade, to answer the vastness of Mens attempts, and aims of increase in Merchandize, as that its found, in many Countreys, insufficient in this Age of the World: And that hath put divers Persons and Countreys, upon contrivances how to supply that Deficiency, by other Mediums; some of which have happily pitch'd upon that of Banks, Lumbards, and Exchange of Moneys by Bills, which have thriven with them.

[Page] The two former of these, viz. Banks and Lumbards, have been set on foot in divers Trading Countreys, by their respective Publick Undertakings, and have succeeded to their abundant Inriching. Perhaps others have thought, that would have occasion'd the overflowing of Moneys amongst them: Especially if they raised the Values of Gold & Silver above the common Standard; but as they have been mistaken, or their Surfeit of Trade hath obscured the visibility of it; and protracted more rational Considerations of Redressing, till it hath proved almost Fatal, to the impoverishing of their Countreys: So the other have really experimented, that their Banks have been, as well with other Countries, as amongst themselves, of greater Value than the Species of Gold and Silver: And yet, such Places drain away the said Species from the other, who under those mistaken apprehensions have Courted it, as the only real good thing for a Countrey.

The Third, viz. that of Exchange of Moneys, hath been for the most part managed by the respective Merchants of all places; who in their particular Dealings and Correspondences (fore-laying Advantages to themselves thereby) have unaccountably controll'd it, and vary it often, in each Annual Revolution.

'Tis not to be doubted, but that all Three of these may be accommodated & improved, to the Publick Advantage of any Countrey: Especially, if managed in Partnership by Private Hands, being persons of known Integrity, Prudence and [Page] Estates: subjecting the annual Profits accruing thereby to the answering the Injury, damage, or loss, by their undertaking.

The best Foundation for such an Attempt, is, that of Real and Personal Estates, instead of the Species of Gold and Silver. For, as a Bank of Moneys is liable to many casualties and hazards; so, the hoarding up of Moneys in Banks, necessitates the taking out the more Bills; which is one Malady this Proposed Bank will cure.

We shall therefore, at present, begin with, and principally discourse of the two first of these: viz. The Bank of Credit, as it may be rendred susceptible of the Second, viz. The Lumbard, conjunct: accounting both the one and the other to be founded as aforesaid, viz. On Lands or Real Estates mortgaged, and staple durable Goods, and Merchandises deposited: such as any Countreys Products and Manufactures will by Art and Industry produce and furnish.

Here might be also discours'd, A Lumbard for the Poor, by some called, Mons Pietatis: But that's fitter to be the Handmaid of the other; for, 'twill be too poor to encourage an undertaking by it self, or for a beginning: Neither will there be any such necessity thereof, when this Bank is settled; forasmuch as this will imploy most of those, who are usually maintained in Idleness, if they will betake themselves to Industry, at such moderate wages as would enable them to live comfortably, without exposing their Imployers to like Poverty with themselves. [Page] And besides, this Bank of Credit and Lumbard, when understood, and received in any Countrey with general Approbation, will in due time render that, as also the Third, viz. that of the Exchange of Moneys by Bills, the more intelligible, and as useful.

Of the second Particular, viz. The definition of such a Bank.

A Considerable number of Persons, some of each Rank, Trade, Calling and Condition, especially in the principal Place or Places of Trading in any Countrey, Agree voluntarily to Receive as ready Moneys, of and from each other, and any Persons in their ordinary dealings, Bank-bills of Credit, Signed by several Persons of good Repute, joyned together in a Partnership, given forth on Lands of good Title mortgaged, and staple unperishing Goods and Merchandizes, deposited in fitting places to be appointed by the Partnership for that purpose; to the value of about one half, or two thirds of such respective Mortgages and Deposits: Which said Bills, thro' their experimented usefulness, become diffused by mutual consent; and passing from one hand to another, in a kind of Circulation, and under reputation of so certain a Fund, have at least equal Advantages with the Current Money or Coyn of any Countrey, attending them, to all who become satisfied to deal with them.

Q. But it may be said by some, This is a [Page] very brief Account, and requires further Explanation. We are yet Strangers to the Nature, and requisite Constitution of a Bank of Credit, and what lies on us to do, in order to our being made partakers of any benefits or advantages thereby, to such as shall voluntarily comply therewith; nor do we see clearly our Security in so doing, nor upon what terms. Pray inform us of these things, so far as we may be safely guided into the way, and unto the end of it. Also, in case this Bank should terminate, how we shall be dealt withal, in the closing up of Accompts, so as may be without damage, either to the Bank, or to our Selves. We doubt not but you have as well Considered the End as the Beginning. Tho' if it prove useful, we can see no cause why a thing of so great Advantages as are suggested, should procure any persons [...]ll-will, or Weariness of it. And we are also satisfied, that an Affair of this nature, wherein the Persons and Estates of so many shall be involved (as it seems probable will be where it once gets footing) cannot suddenly [...] knock'd off, but with inconvenience.

Answ. The clearing these Doubts you'l find in the particulars following. Therefore now,

Of the third Particular, viz. The Constitution of this Bank.

IT is proposed that there be One and Twenty persons (or less) in the Partnership of this Bank: whereof Seven to be called Principal Managers; [Page] Who, or any Three or more of them may have the power of managing and governing the whole affair, according to the Constitution & Rules thereof; and Fourteen Deputies to be imployed by them as Accomptants, Surveyors, Appraisers, Store-keepers, &c. All of them to be persons of good & general Reputation, for Integrity, Prudence and Estates: But, forasmuch as, at the first entrance upon such an affair, it may not be needful to ingage so many; that any Seven of them (more or less) may be conceived sufficient to begin the same; and manage it, until, by the coming on of Business, it shall be judged necessary & incouraging, to settle the Full, or some greater Number of them. These may all be ingaged by Articles of Agreement, & Covenants in Partnership, to attend thereon, and be responsible for their doings, according to such Constitution and Rules in that behalf.

These are to receive all Proposals from any persons touching their having such Credit there-out as they shall desire upon their said Estates of Lands or Goods respectively▪ and to contract & agree with them therein▪ a [...] such Values, & for such Time [...] shall judge the Security proposed of either [...] to draw up, and perfect such [...] Mortgages, Grants & [...] thereof as Lands or Goods respectively [...] require; and perfect the Counterparts thereof, [...]o the Mortgagers and Depositors.

They are also to cause the said Mortgages & [Page] Deposits to be laid up and stored, respectively, in as safe and convenient Rooms, and, Warehouses, &c. as shall be without exception, to prevent damage of Weather, Robbery, Fire, Water, or Vermin of any kind, whereby they may be impaired, or dampnified, and all this, under the trust and custody of such numbers of the said Partners, as no opportunity can be taken to impair or lessen the Security, unless they should all agree therein; which cannot reasonably be imagined being such as are proposed. But, for the better Security thereof, there may be continual Watching on all such places; and it will be the Interest of all persons, any way concerned in the affairs & profits of such a Bank, to be careful to prevent, and to give Advertisement of any attempt made to the impairing & prejudicing thereof, for that their livelihood and dependences will much consist in their preserving it in the greatest Repute; which upon the least violation, by those who are ingaged in the management and trust thereof, will be utterly lost, and the Bank fall to the Ground.

These Partners aforesaid, must also enter into and oblige themselves by Covenants to, and with other Persons to be called Assessors of the Bank, and Conservators of the Constitution, Rules and Instructions to be observed in the management thereof, for their diligence and faithfulness, in the Discharge and Execution of their respective trusts, according to the said Constitution: and inviolably to observe the same, and all the Rules thereof.

[Page] The said Assessors have also the Oversight and Controll of the whole Affair: To see the same be so managed: and to that end are daily to inspect the Management thereof; and that the said Rules be duly observed on both parts, viz. as well on the part of the persons dealing with them, as of the Managers themselves, in every branch of the Bank, that all be done with justice and Impartiality between them; to settle differences, in case any happen; and in the absence of the Managers, may supply that defect, by their Personal transacting the same things, or allowing others as their Deputies. Also,

Each of the said Partners must deposit Moneys and other Estate in the Bank as a Stock or Fund, of their own; which be a further Security and Obligation upon them, for their upright dealings; For thereby every of themselves become Personally Interested, and concerned to be careful in every thing, that they keep the Rules; and all Persons concerned in the yearly Profits thereof are liable, according to the Constitution, to answer the damages, as far as their respective shares thereof extend.

Of the fourth Particular, viz. The necessary Rules to be observed in this Bank.

1. I N primis, That the Partners in the Management of the affairs of the said Bank do [...]it in some convenient Place, of the chief Trading Town of each Countrey, from day to day, and [Page] at such hours as the business & occasions thereof shall require; to receive Proposals from any persons, touching their having such Credit as they shall desire; and for drawing up and perfecting such Bank-bills, Mortgages, Bills of Sale and Defezances thereof, as Lands or Goods respectively shall require: Also for giving Information and Satisfaction concerning the Security, Benefits and Advantages accruing thereby, to such as shall desire to deal with them therein; and to take Subscriptions for that purpose.

2. Item, That whatsoever person shall propose to Mortgage or Deposit any staple Goods or Merchandizes, Lands, Tenements or Hereditaments of a clear and good Title, to the said Partnership, may have such & so many Bills delivered to him as shall amount to about the Value or Sum of one half, or two thirds of the said Estates; or more or less, according as his Occasions shall require, and the nature of the Depositors security will admit. Paying for the use of the said Bills, after the rate of Four Pounds per Cent. per Annum, in like Bills, at the end of every Six Months, for so long time as he and they shall agree for the same.

3. Item, That if at the Expiration of the Term agreed for, the Mortgager or Depositor shall desire the continuance thereof, for such further time as the Partnership shall judge the nature thereof will admit, the same shall be allowed upon the same Terms; and if any person shall desire to redeem them sooner than the time agreed on, he shall have liberty so to do, paying only for such [Page] time as they continue deposited or unredeemed. And shall b [...] allowed to pay in any even Sums (not being under Ten Pounds) in part thereof, if he shall think fit so to do, to lessen his Debt and Charges.

4. Item, That the Redemption thereof be by Bank Bills of Credit, or such other Deposits as the Partnership shall approve of. But if by Moneys in Specie, that there be an Addition of Forty Shillings more in every Hundred Pounds paid in Money, than in the said Bills: For they desire not the ingrossing of Coyn, or streightning mens Occasions thereby.

5. Item, That if it shall happen that any Payments shall be paid in ready Money, such persons as having any of the said Bills in their hands, which they would have Exchanged to answer their occasions for Money, and shall seasonably desire the same, shall be accommodated therewith, upon the delivery up of Bills to such Value.

6. Item, That there be One or more persons allowed by the Partnership, in the nature of Merchant-brokers, to Correspond between the persons who have, & who want Moneys, & Bills respectively, to assist their respective Occasions.

7. Item, That if any person shall not Redeem his Pledge, or Pay his Interest at the respective times agreed on (being of Goods or Personal Estate, the continuance whereof may be hazardous) the Partnership, giving Notice thereof, may Sell the same at the best Rates they can get, either in ready Money, or Bank-bills, rendring the overplus to the Depositor.

[Page] 8. Item, That if any Person be Rob'd of, or lose any Bill or Bills, by accidents of Fire, Water or otherwise; he may have them renewed, if he forthwith apply to the Partnership, and make a voluntary Oath thereof, before a Magistrate, expressing the Number, Value and Date of each Bill or Bills; and securing the Partnership against all after demands for the same Bills: It appearing by the Bank-books, that such Bill or Bills were issued thereout, and have not been returned.

9. Item, That all Bank Bills of Credit be Signed by two or more of the said Partners, (whereof one to be a principal Manager) who are thereby held, to oblige themselves, and all and every their Partners of the said Bank, to accept the same for so much Currant Moneys as shall be in them respectively mentioned, in Payment, for Redemption or Purchase of any Estate in the said Bank, according to the Rules thereof: and that all such Bills be duly entred, in Books to be kept for that purpose, and the Indented Counter-part thereof filed, before the same be issued.

10. Item, That all Goods deposited, be laid up and stored in such safe and convenient Rooms, Ware-houses or Cellars, Yards or Docks respectively; for preventing damage of Weather, Robbery, Imbezlement, Fire, Water, or Vermin of any kind, whereby they may be impaired, and be under such custody & continual care, as will probably render them more safe than in any Persons particular Custody, or Ware-house.

11. Item, That the Charge of Ware-house-room [Page] be reasonable, with respect to the bulkiness or value of the Deposit; and be agreed upon between the Parties to, and inserted in, each Contract. In which respect it will be easier to many, than to hire Ware-houses of their own.

12. Item, That all Persons having any Deposits in Bank-ware-houses, &c. may have liberty, at seasonable hours, and in the presence of known Persons, to be intrusted for that purpose, to view their Goods, that they be not imbezled, or dampnified, and to provide against the same: Also to shew them to their Chapmen; and shall be assisted therein by the Romagers or Porters imployed by the Partnership.

13. Item, That in case the Creditors of this Bank shall agree to desire, and accordingly Declare in Writing, That there be a Determination put thereto: Or if on any other account whatsoever, the Determination thereof shall be judged necessary, by the Proposers and Managers of this Bank, and so declared in Writing (which cannot be without allowance and ascertaining of a reasonable Time betwixt the said Creditors and Partnership for closing up the same, and the Accompts thereof, so as may be without damage to any or either of them:) That, as no Person is or shall be compelled to accept Bank-bills of Credit, unless he shall voluntarily agree so to do, and for no longer time, nor otherwise than he shall so consent: So, no man paying his praemium and charges aforesaid, for the Credit he hath, shall be compell'd to Redeem his Pledge, being of Personal Estate, [Page] sooner than the time contracted for, and the nature of the Deposit shall require: And to the end the Mortgager of Lands, of unquestionable good Title, may not be distressed, to his undoing, in case he should, by reason of such Declaration, be suddenly call'd upon to Redeem the same, (which may be impossible for him to do in some, Years, thro' the scarcity of Moneys,) That all and every Mortgager of Lands, in such case, shall or may have & take Six Years Time, from & after such Declaration aforesaid, to be allowed unto him, his Heirs and Assigns, for Redemption of his Lands; he or they paying after the rate of Six Pounds per Cent. per Annum, in ready Moneys, at the end of every Six Months, for the continuance of the Credit he had thereupon, from such Time as the said Declaration shall be perfected, until he shall Redeem the same: And that the Partners of this Bank shall or may have and take one full Years time more, from the Expiration of the said Six Years, to be allowed unto them, for Selling the said Lands, or such of them as shall not, within the said Six Years, be Redeemed: whereby they may be inabled to Receive in, and Exchange all Bank-bills then granted forth, into the now Current Coyn or Moneys of this Countrey, or other Moneys, being not of more intrinsique Value than what now passes: Or otherwise sati [...]ie for the same by such proportions of the said remaining Lands or other Effects, as shall be judged to be of equal Value: Paying to all the Creditors who shall then have any [Page] Bills in their hands, after the same rate of Interest for so long time, after Publishing the said Declaration, as the said Bills shall remain in the said Creditors hands Unoccupied; with Deduction & Allowance only of the Praemium contracted for, as aforesaid; and that such Bank-bills, as before such Declaration made, have been given forth, upon the Real or Personal Securities aforementioned which remain in the Possession of the said Bank, may & shall be esteemed, & pass as current Moneys, of the Value of the present Coyn, in all Receipts & Payments whatsoever, during the said Term.

14. Item, That the foregoing Rules be attended and observed by all & singular Persons concerned therein, and who shall propose to deal with, and accept the Bills of Credit issued by the Managers of the said Bank of Credit, Lumbard & Exchange of Moneys proposed to be erected in any Place, and managed by persons in Partnership, as other Merchantly affairs.

Of the fifth Particular, viz. The Particular Advantages of such Persons as shall voluntarily deal with the said Partners, in these affairs; which will appear in several Instances.

First Instance.

A Country Chapman hath Lands, suppose worth to be sold for 400l. and being willing to inlarge his Trade & Dealings, or make Improvement on his Lands, as far as his estate will inable him. Or having bought Goods, which he is indebted, & [Page] cannot otherwise pay for, he Mortgages his Land to the Partnership for 200l. more or less; and thereupon receives several Bank-bills of Credit, for 200l. &c. of several Values from Twenty Shillings, and so upwards, to answer his Occasions.

With these he buyes such Goods as he pleases, or pays his Debts for what he formerly bought of the Whole-sale Shop-keeper, or Ware-house-keeper, in such Town or Towns of Trade as shall fall into this way of Dealing; and, having Bank-bills to deliver for them, which are of better Value by 40s. in the 100 l. than Moneys, with this Society, as is herein evinced; he buyes much Cheaper than he could upon his own Credit, or with Moneys in Specie.

The Shop-keeper goes to the Merchant, who thus agrees, and buyes of him other Goods, with the same or other like Bills; wherein he reaps the same advantage as he gave his Chapman.

The Merchant buyes Corn, Beef, Pork, Fish, Hops, Lumber, Pitch, Tarr, Rozin, Skins, Furs, or any other of the Countreys Products or Manufactures, of the Husbandman, Grazier, Artificer, or Maker thereof.

The Husbandman, &c. If a Farmer of Lands, pays his Rent, and purchases more young Cattel of his Neighbour, for Breed or Fatting. Or,

If an Owner of Land, and hath not sufficient Stock to improve it, he also Mortgages his Land, and has Credit to furnish himself. Or,

If he hath sufficient Stock, and perhaps more than his present Farm can maintain, he hath his eye upon a Neighbouring Farm, or piece of Land [Page] that would be Sold; he Mortgages his own Land in the Bank, and hath Credit to buy the other.

If then he want Stock, he may also Mortgage the Farm or piece of Land last purchased; and have Credit to inable him fully to Improve and Stock both, Whereby he doubles his Yearly advantages, and if he can then content himself to live as frugally, & be as industrious as before, he may soon compass to pay off his Debt, & redeem his Land. Or, he may continue the Credit he ha [...], and take out more upon the Additional improvement; and thus increase his Purchases and Estates, as long as such an help is afforded.

Second Instance.

The like may be done for carrying on the opening & working in any Mines, Minerals or Quarreys of Stone, Lead, Tin, Iron, Copper, &c. thus, viz. The Mine & Lands wherein the same is, may be Mortgaged as aforesaid, to supply the Owner thereof with Bills of Credit, for paying his Workmen, in any Sum of Twenty Shillings, or above.

As fast as any of these Metals, &c. are wrought fit for Sale, if a Chapman be wanting, the Metal may be brought into the Bank, and the Owner receive Bank-bills to the value of about two thirds thereof, as aforesaid, to enable him to proceed on his Works: And the Metal lying in Bank is there readier for a Market than elsewhere, in his own Private-house or Ware-house, at very reasonable rates for lying there, and may with allowance of the owner, be sold in his absence, by the Merchant-broker before mentioned, at such current Rates [Page] as he shall set, & he become Creditor for so much to be discompted or paid him, whensoever he shall call for it.

Third Instance.

A Weaver of Cloth, Serge, or Linen, &c. is imployed in any Work-house erected, or to be erected, to carry on those respective Manufactures: Also other Manufactures, and Artificers, in Rope-making, Cables, Rigging, Sails, Anchors, or any other Materials for the Fishing-trade, Merchants, or building of Ships, &c.

The Owner of such Work-house, or Materials respectively, consents to Mortgage the same, for One or Two Hundred Pounds, more or less, in Bank-bills, as the Work shall require, and the Value of the House or the Materials will admit.

With these Bills, the Work-master or Overseer, buyes Wooll, Worsted, Yarn, Hemp, Flax, Dying-stuffs, Iron, Timber, Lumber, &c. of the Merchant, Ware-house-keeper, Countrey-man, or other Seller; and finishes 40, 60, or 100, pieces, &c. more or less of any of the said Commodities; which when wrought up for a Market; if he want a Chapman, he brings into the Bank Ware-houses, as aforesaid; or such Yards, Docks, or other Places, as they shall appoint or agree: Takes up new Credit upon them, and leaves them there to be Sold, at his own rates, as aforesaid. Or,

A considerable parcel of Wooll, Cotton, Yarn, Flax, Hemp, Oyl, Dying-stuffs, or other Goods for his use, are offer'd to Sale; he may pay one third thereof by his Wrought-up-goods Unsold, and bringing these Commodities into the Bank, [Page] may receive Bills of Credit for paying the other two thirds; which he may take out, in parcels, as he brings in any new wrought up Goods, or hath occasion to use them for working up more; and the Bank-ware-houses will be to him as Black-well Hall, &c. in London to the Clothiers, to assist his Sale of them without his trouble: For thither will all Merchants have incouragement to come, to seek supplies for Transportation, & find Goods always ready. Other Instances might be multiplied, but by these it appears,

1. That the Manufacturer, &c. loses no time in looking out a Chapman.

2. Is always furnish'd with Credit to buy his Materials at the best hand.

3. The Merchant never trusts, nor Ware-house keeper: Or, if he do, the plenty of Bills expedits his Chapmans Sale, and consequently his Payments. Whereby,

4. He has incouragement & stock presently to look out for more of the same, or other useful Merchandizes.

5. Sends forth the said Metals, Clothes, Stuffs, Linen, &c. amongst other Merchandizes of the Product of his Countrey, or Imported.

6. Makes return of Bullion, Moneys, or other useful Goods, which are presently bought off with Bank-bills. Or,

7. He may store them up in Bank Ware-houses, and receive present Credit, wherewith to send out again And,

8. Thereby be inabled (at least) to double, or [Page] treble his yearly dealings, and receive proportionable advantages. This,

1. Increases & quickens Merchandizing & Trade.

2. Promotes Shipping & Navigation. Which,

3. Increases the Publick Duties, and consequently the Revenues.

4. Imploys the Poor in the Minings & Manufactures forementioned.

5. They get Moneys by these Imployments.

6. That inables them to buy up all necessaries for Cloathing, Victuals, paying of Debts, &c.

7. This helps the Consumption of, as well their own Commodities, as other imported Goods and Merchandizes: for no Man, that hath wherewith to buy, will go naked or be hungry, &c.

8. This helps to civilize the Ruder sort of People; and incourages others to follow their Example in Industry and Civility.

9. Thus all sorts of Persons become inabled to live handsomly, & out of Debt, and that prevents multiplicity of Law-suits, & Troubles to the Government: but none of these advantages may be expected, out of the small Pittance of Cash, that now is, ever was, or likely will be in any Countrey, unless assisted in Trade, & inriched by the help this Bank proposes. And so we pass to the Consideration

Of the sixth Particular, viz. The answering some few of the most material Pertinent Queries, and Objections touching this Bank, viz.

Q 1. C An I have Monyes for Bank-bills, when I have occasion?

[Page] Answ. 1. 'Tis not propounded to be a Bank of Moneys (which is liable to inexpressible & unforeseen hazards) but of Credit to be given forth by Bills; not on Moneys advanced, as in other Banks; but (on Lands or Goods, as aforesaid,) to supply such as cannot get Moneys (by reason of its scarcity) with whatsoever may be had for Moneys. Yet,

Answ. 2. As oft as any persons Redeem their Lands, or Goods, they must do it in Bank-bills, or with Moneys. If in ready Moneys, the Partnership may exchange Bills therewith, to such as desire it; as is afore provided by the Rules.

Answ. 3. However, this Bank is no occasion of streightning men that would have Moneys; but leaves them free; and in this case, the Merchant-brokers of the Bank will be helpful, between those who have and who want Moneys, and Bills respectively; as is likewise aforementioned in the said Rules. But,

Answ. 4. If it be made to appear to you, that others who have Moneys, will be willing to change your Bank-bills into those Species of Gold & Silver, & thank you for offering them the occasion (tho' the Bank Partnership do it not) you'l have no cause to decline the other advantages proposed: Especially if you may both be gainers by the Exchange. Now, if I ow'd you 500 l. to be paid in Silver, which I could not do, but should propose to pay you in Gold, at the intrinsique Coyn'd Value, which if you part with again will yield you Five Pound profit, or more: Would you then refuse Gold?

[Page] Obj. But how will you apply this, to make it Credible? Sol. Thus, Whoever hath any Payment to make in Bank, which (in probability if such Bank take effect in any Countrey) will be every Man that deals in above Twenty Shillings at a time) will find, that we must pay Forty Shillings more, in every Hundred Pounds of ready Money, than in Bank-bills of Credit; as per the forementioned Rules of the Bank) which is about Five-pence benefit to the Exchanger, in every 20. s. No doubt then of having Moneys (by a little inquiry of the Merchant-broker) at the Value contained in the Bills, of all such as must redeem their Mortgages, and Deposits. But,

Bills, wherever Banks have been erected (tho' Money Banks) have always been of better Value than Moneys in Specie. Whereof three Reasons may be given.

(1.) For the ease of Compting and Carriage; and preventing damage to the Receiver, by Counterfeit, Clip'd, Light or Base Coyn: (Which is obvious to all.)

(2) For safety in Travelling, Laying up, &c. As visible as the other.

(3.) For the advantage that is to be made by the Exchange, on the account of such Conveniences. Whereof take two Examples, viz.

(1.) The Bank-bills of Holland are ordinarily better than Moneys, by at least Three Pounds per Cent. And,

(2.) Those in Venice, by Twenty Pounds per Cent. and Laws made there to keep them from rising [Page] higher; for they were once at 28. l. per Cent. and not without some difficulty Reduced to Twenty; so that each Bill of 100 l. is now Current at 120. l.

Obj. But how is that Possible or Credible?

Sol. There is this account rendred of it (which has confirmation by many other Instances that might be given, concerning the current Prices of many Commodities, which have not so much of intrinsique value in them,) viz. The State of Venice propounded the Erecting a Bank to consist of Two Millions of Duckets: Accordingly Moneys were brought in, Bills given out for the same Value; and a stop put to the receiving, or giving out any more of either.

The Usefulness of these Bills was suddenly found to be such in the practice and imployment of them, upon the three forementioned Accounts, that every Man, at one time or other, found his Affairs required them: So, that at first, such Bills would not be parted with for Money, under Ten Shillings per Hundred Pounds; And no sooner was that become the Current Rate, but they were successively raised, by Ten Shillings at a time, till they came to be in every ones Estimation, 28. l per Cent. better than Moneys in Specie; and so pass'd accordingly. Whereupon,

The State of Venice enacted several Laws against their passing so high: which failing to accomplish what was required, at length they conceived it necessary, in order to the bringing down the Price, to propose the giving forth Bills for Three Hundred Thousand Duckets more: By which means they [Page] brought it back to Twenty Pounds per Cent. (which pleased the People) and there fixt it, as to its rising higher afterwards, by a severe Law; since when, it stands so to this Day: And this is no more than what is familiar in the Price of other things, viz. Diamonds, Rubies, Pearls, Horses, Pictures, &c. which have their Estimation from the various Pleasures and Fancies of Men, &c.

And, if it be demanded, what induced that State to allow it so high?

The Answer is easie, viz. The State of Venice had made use of the Moneys deposited, in their Publick Occasions (where observe the hazard of a Money Bank) and, having promised for Satisfaction of Creditors, to raise the like Sum, if they should have occasion for it, reap this advantage, of their Peoples high Opinion of Bills, that, they are thereby assured, that never, will any Creditor come to ask them 100 l. for a Bill of 100 l. when he may have 120 l. from any other hand. A notable way to pay a vast Debt. But, by means hereof, the Creditor has no other Fund or Security but the States Word: For, there is not one Ducket for them in Bank.

Q. 2. My Lands or Goods are already Mortgaged for Moneys, at a higher Rate of Interest; and the Mortgage [...] will not take Bills. Can such a Bank help me?

Ans. There may be Persons, of whom you may be informed at the Bank, who will advise & assist you therein: If there be Moneys in the Countrey to be had.

Q. 3. I have neither Lands nor Goods, but a Trade, by [Page]which I could live comfortably if I had a small Stock; and I could afford to give a greater Interest, and have Friends that would help me too, upon my own Bond: But they have not Moneys. Which way shall I be help'd?

Ans. If your Friends have Lands or Goods, they may have these Bank-bills of Credit, at Four Pounds per Cent. per Annum, to Lend you at such Rates as you can agree: Whereby they also may be gainers, and have incouragement to help you.

Much more might be said upon this Subject, but these seem to be sufficient, for incouraging an attempt: And, the experiments of the things suggested will give such clear Demonstrations of the Usefulness, Advantage, Necessity & Security of such Banks, in most places, beyond all others that have been hitherto put in practice, as those who are not so prompt to receive things into their understandings by the Notions of them, or are prejudiced by mistaken apprehensions about them, & thence raise many impertinent Objections (not worth scribling) may be presumed will follow others Examples, in well-doing, when those are observed to thrive who go before therein.

We shall therefore, for the Conclusion, which is the last Particular mentioned, to be Discoursed, Sum up all, in this general Assertion, viz.

THat there will arise many more Conveniences & Advantages, by this Bank, to such Countreys where they shall be erected, than have been enumerated, in the several foregoing instances; or, well, can be.

[Page] 1. By this, the Trade & Wealth of any Country is establish'd upon its own Foundation: and upon a Medium or Balance arising within it self, viz. The Lands & Products of such Countrey, & not upon the Importation of Gold or Silver; or the Scarcity or Plenty of them, or, of any thing else Imported from Foreign Nations, which may be with-held, prohibited, or enhansed, at the Pleasure of others.

2. The Native Commodities of such Countrys will thus become improved to a sufficiency (at least) for their own Use; and thereby afford a comfortable Subsistence to many ingenuous & industrious Persons, in such Countrys, who know not how to Subsist: Especially such as are Banish'd, or inforced to forsake their Native Countrys, by reason of the heat of Persecution, upon the account of Religion.

3. It will not be in the Power of any, by Extortion & Oppression, to make a Prey of the Necessitous.

4. The Fishery of such Countrys, as lye convenient for it, may be improved: and the Navigation & Shipping increased, for Use or Sale.

5. The Publick Revenues thereof, in consequence of these, will be augmented.

6. The Rents of Lands, yea, the Purchase value thereof, will rise: For, the Plenty of Money, or a valuable Credit equivalent thereunto, & the Lowering of Interest, must necessarily have that effect.

7. It will supply the defect or scarcity of Moneys in Specie, until by the setling of Manufactures, &c. (which this Bank proposes) the Products of such Countrey for Exportation shall come to Balance or Exceed the value of it's Importations▪ [Page] which afterwards will necessitate the bringing in of Moneys, as fast as the want thereof hath carried it away. For, the true ground of the Plenty or Scarcity of Moneys in any Countrey, is not the high or low Value of the Money (as some erroneously conceive) but, that the Value of Goods Imported from other parts hath been greater than that of the Export. The Balance whereof must necessarily be answer'd with Moneys, & for the same Reason, Revers'd, the Export of Goods when bro't to exceed the value of the Import, must, as necessarily bring it back again to such proportion as the Export can be raised. And whatsoever other means may be suggested for furnishing of Moneys, must be fruitless, for, there will abide no more than such proportion; let what Value will be put on Moneys above the Currant Price thereof in other Countrys with whom they shall Trade; which may be further Evidenced, if this hint thereof be not sufficiently intelligible. To which may be added, That the less need there is of Moneys in Specie, by reason of such Currant Credit, the more will be the increase of Money it self; as is manifest in Holland, Venice, & all Places where Bank-credit supplies the defect of those Species; least, the Money that remains in such Countreys, will be at greater liberty for such petty occasions as cannot be so well accommodated by Bills.

In Order therefore, & as Praevious to the Entring upon such an Affair, tis requisite that other Queries be Propounded and Resolved, viz.

Q. 4. How shall it come to be known whether a sufficient number of Persons, of all Ranks, Trades [Page]and Callings, will deal with this Bank? The Reasons of which Inquiry are these, viz.

(1.) It will be of use to the undertakers of such Bank to know it, for their incouragement in their entrance upon this affair. And,

(2.) To such others as would take the Bills, if they were satisfied they could buy such Goods, &c. as they want, with Bills, at as easie rates, as if they had ready Moneys to give.

Answ. 1. It will be requisite, that a short Declaration be tendred to be Subscribed by some Persons of all Ranks, Trades & Callings; signifying that they will accept the said Bank-bills of Credit, in their ordinary future dealings of Buying & Selling, or other Traffiquing affairs, whereupon they are to receive Moneys, for so much ready Moneys as shall be in such Bills mentioned, upon the Terms & according to the Rules of the Bank: Saving to every man his Specialties, & particular Contracts.

Ans. 2. That such as shall so declare themselves, by Subscription (or otherwise) may be put into Alphabetical Lists, and, such as take forth Bills may be informed of the Names of the said respective Persons, their Trades or Callings, and Places of Habitation. But,

Q. 5. It may be further inquired, viz. What if some sorts of Persons requisite for a universal Circulation of Bills, will not, in all cases, ingage to accept Bank-bills: but some will wholly Refuse them, & Cry up Moneys, inhans'd to a higher Rate than they pass at in other Countreys, &c. Others will be for either, or both, as they find it for their Advantage, &c.

[Page] Answ. Its not necessary that all should, in all cases, oblige themselves to Bills, as long as there is Moneys to be had: But if there be not a sufficiency of that for carrying on of Trade, &c. as, this Bank hinders not the Currency of Moneys, but that may be imployed as far as it will go, (which, for the most part, during the Scarcity of it, will be in small dealings,) so, the Bills will be found useful to supply the defect. The needful proportion whereof will soon be understood; and each Person will cast his Business, and make his Contracts accordingly: And consequently, this need not hinder, or discourage the attempt; if there be a competent number of each, or most sorts, that cannot, otherwise, deal as they would.

Q. 6. And, if any shall inquire, What Number of Merchants and other Tradesmen may be sufficient (at first erecting such a Bank) to assist a Circulation of Bills in Trade, in case some should, not only withdraw from, but, obstruct, & misrepresent the Affair, or Persons managing it, as not having the Publick Approbation, or Sanction of the Authority of a Countrey, which they may suggest to be necessary? It's Answered,

Answ. 1. A few Merchants in any Countrey who are general Traders (by the help this Bank proposes, in the foregoing Instances,) may be sufficient to give encouragement for the Entrance upon this Affair; and so many Shop-keepers, Artificers, &c. as must and will deal with them.

For,

Answ. 2. It may reasonably be presumed, that, many, in the practice of the thing, will apprehend [Page] the necessity, usefulness, and security thereof, who cannot easily take it up in the Notion, or by Discourse▪ and that such will come in by Degrees: for, if, (being Merchants) they stand out, such of their Chap-men as shall find it their interest to [...]ell for Bills, must buy again of others who will take them in payment; and finding themselves well used by such, will hardly return where they have been refused: and, if of other Professions they must either Sell little, or do it on Trust, or wait for payment till moneys grow more plentiful; whilest others carry away the whole Trading among them.

Ans. 3. This part of the Merchants Calling, is, in every respect as Free and Lawfull for any to undertake, and needs no more of Publick Encouragement or Countenance, than that part of buying and selling (at home or abroad) with or for ready Money, Time, or Barter, which they better understand & practise. And the managers hereof may as well expect a Benefit by it as the others: Forasmuch as it will no less take up their time to attend; and will be an improving the Trade of any Countrey, no less than the other: And lastly, has its Hazards attending it; for the Profits accruing thereby, are, in the first place assigned, by the Constitution and Rules thereof, for making good all Losses & Damages that may happen, in the Management of this Affair.

De te Narratur, N. A.

FINIS.

Information about this book

Title statement

A Model for erecting a bank of credit; with a discourse in explanation thereof. : Adapted to the use of any trading countrey, where there is a scarcity of moneys: more especially for His Majesties plantations in America. Quo communius eo melius.

Publication

Publisher

Text Creation Partnership,

Place of publication

Ann Arbor, MI :

Date

2008-09.

ID [DLPS]

N01436

ID [TCP]

N01436

ID [STC]

Evans 1703

ID [NOTIS]

APX9270

ID [IMAGE-SET]

1703

ID [EVANS-CITATION]

99026243

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This keyboarded and encoded edition of the work described above is co-owned by the institutions providing financial support to the Early English Books Online Text Creation Partnership. This Phase I text is available for reuse, according to the terms of Creative Commons 0 1.0 Universal. The text can be copied, modified, distributed and performed, even for commercial purposes, all without asking permission.

Series

Early American Imprints, 1639-1800 ; no. 1703.

Notes

(Evans-TCP ; no. N01436)

Transcribed from: (Readex Archive of Americana ; Early American Imprints, series I ; image set 1703)

Images scanned from Readex microprint and microform: (Early American imprints. First series ; no. 1703)

Source

— A Model for erecting a bank of credit; with a discourse in explanation thereof. : Adapted to the use of any trading countrey, where there is a scarcity of moneys: more especially for His Majesties plantations in America. Quo communius eo melius.,

Extent

[2], 30 p. ; 15 cm. (8vo)

s.n.] London: printed in the year, 1688. Reprinted at Boston in New-England,,. [Boston :: in the year, 1714.. (Preface dated Boston, Feb. 26. 1713,4.) (Signatures: A-B^8.)

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