Theory of Credit PDF
Preview Theory of Credit
THEORY OF CEEDIT Suoiv 'AyaOoiv OVTOIV TLXovrov re KCU. 7rpo<s aTrai/ras IIi(rTiW# ^ov ecrri r^s ntVrews, VTrap^ov There being two kinds of Wealth Money and General Credit the greater is Credit, and we have it et St TOVTO ayvoets CTI IIiOTlS 'A<^op/i,^ TCOI/ Tracrtup' ecrrc /xeyt ?rav ui/ If you were ignorant of this that Credit is the greatest Capital of all towards the acquisition of Wealth, you would be utterly ignorant DEMOSTHENES Credit has done more, a thousand times, to enrich nations than all the mines of all the world DANIEL WEBSTER Man conquers Space by Commerce, and Time by Credit RlVAROL THE THEOEY OF CREDIT BY HENBY DUNNING MACLEOD, M.A. OF TRINITY COLLEGE, CAMBRIDGE, AND THE INNER TEMPLE, BARRISTER-AT-LAW SELECTED BY THE ROYAL COMMISSIONERS FOB THE DIGEST OF THE LAW TO PREPARE THE DIGEST OF THE LAW OF BILLS OF EXCHANGE. NOTES, ETC. HONORARY MEMBER OF THE JURIDICAL SOCIETY OF PALERMO, AND OF THE SICILIAN SOCIETY OF POLITICAL ECONOMY CORRESPONDING MEMBER OF THE SOCIETE D'ECONOBIIE POLITIQUE OF PARIS, AND OF THE ROYAL ACADEMY OF JURISPRUDENCE AND LEGISLATION OF MADRID SECOND EDITION TWO VOLUMES IN VOLUME ART 1 1. P LONDON LONGMANS, GREEN AND CO. AND NEW YORK: 15, EAST ICin STEEET 1894 All Eights Reserved WORKS ON ECONOMICS AUTHOR By the Elements of Political Econony. 1858 A Dictionary of Political Economy. Vol. I. 1862 The Principles of Economical Philosophy. Being the Second Edition of the Elements. Two Vols. 1872-75 Lectures on Credit and Banking. Delivered at the Request of the Council of the Institute of Bankers in Scotland. 1882 The above Works are out of Print The Theory and Practice of Banking. Two Vols. Fifth Edition. Vol. I. Price 12/-: Vol. II. Price 14/- The Elements of Economics. Being the Third Edition of the Elements. Two Vols. Price 7/6 Each The Elements Of Banking. One Vol. Eleventh Edition. Price 3/6 Economics for Beginners. One Vol. Fifth Edition. Price 2/6 The Theory Of Credit. Two Vols. Vol. I. Second Edition. Price 10/6Net. Vol. II. Part I. SecondEdition. Price 10/6 Net. Vol. II. Part II. Price 10/6 Bimetalism. One Vol. Second Edition. Price 5/- Net. PREFACE 1 have found it necessary to enlarge this Volume very con- siderably AVhen some few years ago a movement was started to abolish our present system of Coinage, the most perfect and successful ever devised by the ingenuity of man, and to restore the old Bimetallic System, which, after having been vainly attempted to be maintained for five hundred years, had been finally abandoned as hopeless, impracticable and injurious, it seemed so contrary to demonstrated Science that most persons thought that it was not worth any attention But such is no longer the case. This movement has had such an unexpected extension, and met with such wide support from numerous and influential persons in nearly every country, that it can no longer be neglected. There is no graver and more momentous Economic question at the present day, nor one which is at the present time being more hotly discussed throughout the world I have, therefore, found it necessary to give the wholesubject of the Coinage much greater prominence than it received in the previous edition. I have given a chapter to explain the general principles of the Coinage, and also one specially to Bimetalism The gradual adoption by most of the European States of a single Gold Standard, coined in unlimited quantity, and made legal tender to any amount, with Coins of other metals such as Silver strictly limited in quantity, and made only subsidiary to the Standard Unit which is termed Monometalism is one of the most important Economical events of the nineteenth century. But comparatively few even ofthe persons who acquiesce in this system as being established and successful, are fully informed of the historical facts and arguments on which it is founded. The VI PREFACE purpose of this chapter is to give a succinct, but sufficiently full accountoftheindubitablehistorical facts, andtheincontrovertible arguments which a long series of illustrious men during five centuries have based upon these facts, upon which the modern system of Monometalism is founded, and to examine whether the Bimetalists have brought forward any sound reasons for invali- dating them and reverting to the former system The whole of this vast controversy is reducible to a single simple and definite issue Supposing that Gold and Silver are coined in unlimited quantities, and a Fixed Legal Ratio is enacted between them (1) Is it the Legal Fixed Ratio enacted between the Coins which governs the relative Value of the metals in Bullion ? (2) Or is it the relativeValue of the metals in Bullionwhich governs the relative Value of the Coins ? (3) And if it be found impossible for any single State to maintain Gold and Silver coined in unlimited quantities in circulation at a Fixed Legal Ratio, is it possible for any number of States combined to do so by an International Agreement ? This is the whole gist of the controversy, and all facts and arguments adduced must be directed to establish one or other of these points. All descriptions, however long, or however true, of the unfortunate state of commerce at the present time, are utterlyirrelevant and beside the question, and must at once be dismissed from consideration. This issue, which is the sole point in the case, is not to be determined by assertions evolved out of the inner consciousness of any persons, however numerous and influential, but by a strict investigation of the history of the Coinage in different countries, and by solid arguments formed on the observation of these facts I have given succinct, but I hope sufficient, notices of the
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