The ease this would bring to trade, the deliverance it would bring to the merchants from the insults of goldsmiths, &c,, and the honour it would give to our management of public imposts, with the advantages to the Custom House itself, and the utter destruction of extortion, would be such as would give a due value to the bank, and make all mankind acknowledge it to be a public good. The grievance of exactions upon merchants in this case is very great, and when I lay the blame on the goldsmiths, because they are the principal people made use of in such occasions, I include a great many other sorts of brokers and money-jobbing artists, who all get a snip out of the merchant. I myself have known a goldsmith in Lombard Street lend a man 700 pounds to pay the customs of a hundred pipes of Spanish wines; the wines were made over to him for security by bill of sale, and put into a cellar, of which the goldsmith kept the key; the merchant was to pay 6 pounds per cent. interest on the bond, and to allow 10 pounds percent. premium for advancing the money. When he had the wines in possession the owner could not send his cooper to look after them, but the goldsmith’s man must attend all the while, for which he would be paid 5s. a day. If he brought a customer to see them, the goldsmith’s man must show them. The money was lent for two months. He could not be admitted to sell or deliver a pipe of wine out single, or two or three at a time, as he might have sold them; but on a word or two spoken amiss to the goldsmith (or which he was pleased to take so), he would have none sold but the whole parcel together. By this usage the goods lay on hand, and every month the money remained the goldsmith demanded a guinea per cent. forbearance, besides the interest, till at last by leakage, decay, and other accidents, the wines began to lessen. Then the goldsmith begins to tell the merchant he is afraid the wines are not worth the money he has lent, and demands further security, and in a little while, growing higher and rougher, he tells him he must have his money. The merchant — too much at his mercy, because he cannot provide the money — is forced to consent to the sale; and the goods, being reduced to seventy pipes sound — wine and four unsound (the rest being sunk for filling up), were sold for 13 pounds per pipe the sound, and 3 pounds the unsound, which amounted to 922 pounds together.
Pounds s. d The cooper’s bill came to . . . . . . . . . 30 0 0 The cellarage a year and a half to . . . . 18 0 0 Interests on the bond to . . . . . . . . . 63 0 0 The goldsmith’s men for attendance . . . . . 8 0 0 Allowance for advance of the money and forbearance . . . . . . . . . . . . 74 0 0 ====== 193 0 0 Principal money borrowed . . . . 700 0 0 ======= 893 0 0 Due to the merchant . . . . . . . . . . 29 0 0 ======= 922 0 0
By the moderatest computation that can be, these wines cost the merchant as follows:—
First Cost with Charges on Board. Pounds s. d In Lisbon 15 mille reis per pipe is 1,500 mille reis; exchange, at 6s. 4d. per mille rei . . . . . 475 0 0 Freight to London, then at 3 pounds per ton . . . . . . . . . . . . . . . . 150 0 0 Assurance on 500 pounds at 2 per cent . . . 10 0 0 Petty charges . . . . . . . . . . . . . 5 0 0 ======= 640 0 0
So that it is manifest by the extortion of this banker, the poor man lost the whole capital with freight and charges, and made but 29 pounds produce of a hundred pipes of wine.
One other office of this bank, and which would take up a considerable branch of the stock, is for lending money upon pledges, which should have annexed to it a warehouse and factory, where all sorts of goods might publicly be sold by the consent of the owners, to the great advantage of the owner, the bank receiving 4 pounds per cent. interest., and 2 per cent. commission for sale of the goods.
A third office should be appointed for discounting bills, tallies, and notes, by which all tallies of the Exchequer, and any part of the revenue, should at stated allowances be ready money to any person, to the great advantage of the Government, and ease of all such as are any ways concerned in public undertakings.
A fourth office for lending money upon land securities at 4 per cent. interest, by which the cruelty and injustice of mortgagees would be wholly restrained, and a register of mortgages might be very well kept, to prevent frauds.
A fifth office for exchanges and foreign correspondences.
A sixth for inland exchanges, where a very large field of business lies before them.
Under this head it will not be improper to consider that this method will most effectually answer all the notions and proposals of county banks; for by this office they would be all rendered useless and unprofitable, since one bank of the magnitude I mention, with a branch of its office set apart for that business, might with ease manage all the inland exchange of the kingdom.
By which such a correspondence with all the trading towns in England might be maintained, as that the whole kingdom should trade with the bank. Under the direction of this office a public cashier should be appointed in every county, to reside in the capital town as to trade (and in some counties more), through whose hands all the cash of the revenue of the gentry and of trade should be returned on the bank in London, and from the bank again on their cashier in every respective county or town, at the small exchange of 0.5 per cent., by which means all loss of money carried upon the road, to the encouragement of robbers and ruining of the country, who are sued for those robberies, would be more effectually prevented than by all the statutes against highwaymen that are or can be made.
As to public advancings of money to the Government, they may be left to the directors in a body, as all other disputes and contingent cases are; and whoever examines these heads of business apart, and has any judgment in the particulars, will, I suppose, allow that a stock of ten millions may find employment in them, though it be indeed a very great sum.
I could offer some very good reasons why this way of management by particular offices for every particular sort of business is not only the easiest, but the safest, way of executing an affair of such variety and consequence; also I could state a method for the proceedings of those private offices, their conjunction with and dependence on the general court of the directors, and how the various accounts should centre in one general capital account of stock, with regulations and appeals; but I believe them to be needless — at least, in this place.
If it be objected here that it is impossible for one joint-stock to go through the whole business of the kingdom, I answer, I believe it is not either impossible or impracticable, particularly on this one account: that almost all the country business would be managed by running bills, and those the longest abroad of any, their distance keeping them out, to the increasing the credit, and consequently the stock of the bank.
Of the Multiplicity of Banks.
What is touched at in the foregoing part of this chapter refers to one bank royal to preside, as it were, over the whole cash of the kingdom: but because some people do suppose this work fitter for many banks than for one, I must a little consider that head. And first, allowing those many banks could, without clashing, maintain a constant correspondence with one another, in passing each other’s bills as current from one to another, I know not but it might be better performed by many than by one; for as harmony makes music in sound, so it produces success in business.
A civil war among merchants is always the rain of trade: I cannot think a multitude of banks could so consist with one another in England as to join interests and uphold one another’s credit, without joining stocks too; I confess, if it could be done, the convenience to trade would be visible.
If I were to propose which way these banks should be established, I answer, allowing a due regard to some gentlemen who have had thoughts of the same (whose methods I shall not so much as touch upon, much less discover; my thoughts run upon quite different methods, both for the fund and the establishment).
Every principal town in England is a corporation, upon which the fund