Page:Sir William Petty - A Study in English Economic Literature - 1894.djvu/69

70. The great advantage of the banking system is that it enables a country to diminish the amount of precious metals in circulation as currency. Supposing that £100,000 will drive the trade of a nation, and there is but £60,000 in the country. If £20,000 is sufficient for all payments under £50 then the £40,000 can be placed in a bank and under proper security may be freely used. In this way, with a credit of £40,000, the sum of £100,000 is made up (230). The credit system can be further extended. The security in the bank need not be metallic; why should not money be issued on the basis of landed property (280)? He is convinced of the soundness of such a scheme, and he wishes to see land banks established both in England and in Ireland (351).

Petty's most systematic work is his "Treatise on taxes and contributions." When we remember the desultory character of the English writings on finance in his time, we must be surprised at his firm grasp of the subject. It was a matter in which he was thoroughly at home. As a public servant he had experience in financial administration, and he was a witness of the serious effects that could be brought about by a short-sighted system of taxation. The work opens with an enumeration of the public charges of a State. These are charges of defense, external and internal; administration of government, of justice, of religion; education, the poor, and internal improvements. What are the causes that increase these charges? The origin of foreign and domestic wars is traced and analyzed. The costs of governmental administration may be increased by a general unwillingness to pay taxes. This