23 i 



BANK. 



Dank. rate, or other persons naked in partnership, above 

 v~~ ' the u umber of six, can borrow money on their note 

 payable sooner than six month*, during the continu- 

 ance of the charter of this company, who are de- 

 clared to be a corporation, and to have the exclusive 

 privilege of banking. 



The character and security of the Bank of Eng- 

 land arc permanently established by the many provi- 

 sions for its stability. But to ascertain the solidity 

 of its bank-paper, or the reliance that the public may 

 place in its engagements, it is only necessary to state, 

 that value is received in security, or bills payable at a 

 fixed time, for every note that is issued, so that there 

 13 always value in the bank equal to all the notes in 

 circulation. This value consists of bullion or coin ; 

 government securities payable for receipts, or at de- 

 terminate periods ; and bills of exchange with three 

 solvent names, at dates not exceeding two months. 



Siiicc the first establishment of the bank, it has not 

 sustained any serious loss. So certain is the payment 

 ef bills drawn and indorsed, that, in ordinary times, 

 the arithmetical calculation of the chance of loss is 

 only as one to three hundred thousand : a proportion 

 so insignificant, that no injury is to be apprehended 

 from such a cause. Were a run to be made on the 

 bank, and the owners of notes to insist on payment 

 j:i specie, the discounting of bills would be discon- 

 tinued, and consequently the whole notes in circula- 

 tion would return to the bank in two months, in pay- 

 ment of the advances to government and the bills of 

 individuals. The bank, therefore, has it always in 

 its power to call in its notes, merely by refusing to 

 accommodate government, or to discount bills of ex- 

 change. 



But the mercantile people of England have well 

 grounded reason to place confidence in the paper of 

 the bank ; and it must be highly gratifying to our 

 national pride, to think, that bills of exchange can 

 be obtained in any part of Europe for our bank notes, 

 on the same terms as for specie. 



The profits of the tank are supposed to be greatly 

 accumulating ; but as the directors are 6wom to se- 

 . iccy, it is only from circumstances, and the commu- 

 nications made by them to general courts, that we 

 can conjecture as to that subject. 

 Bank of Within a year after the establishment of the Bank 



Scotland, of England, a royal charter was granted for institu- 

 A.D. 1C95. t jjr the Bank of Scotland. The same William Pa- 

 terson who projected the Bank of England, was also 

 the projector of this bank. He seems to have been 

 one of those enterprising men to whom the trade and 

 prosperity of this country are so much indebted. The 

 original capital of the tank was 1 ,200,000 Scots 

 money, or 100,000 sterling ; and its affairs are ma- 

 naged by a governor and deputy, with 12 ordinary 

 and 13 extraordinary directors, annually elected by 

 the proprietors of stock, to whose inspection the 

 bank submits its accounts once a year. There are 

 twenty branches belonging to the bank, in different 

 towns in Scotland, under the management of agents, 

 who in general receive fixed salaries for their trouble, 

 and altogether the affairs of the bank are very pros- 

 perous. 



In the year 1727, the Royal Bank of Scotland 

 was erected by charter. It is mana -ed by a gover- 



nor and deputy, with eighteen ordinary and exlrssi- " 



dinary directors ; and its accounts are exhibited four ' < ' 



times a year. The business f this bank if conducted R ln , 

 on a plan similar to that of the Bank of Scotland ; and D f. Gotland 

 the concern is also very profitable to the proprietors. A. D. I 



In almost every town in Scotland, a bank has been 

 established, and in some, two or three. But these 

 banks are private copartneries, for the purpose of 

 discounting bills of exchange, and selling drafts on 

 London, Edinburgh, Sec for the accommodation of 

 merchants and others. They also, in common with 

 the chartered banks of Scotland, issue cash accounts 

 or loans to individuals on bonds of security; and 

 traffic in money and bills to a very great extent. 



The French nation, though less enterprising than Banks in 

 the English, in every thing relative to commerce, Trance, 

 have yet, in some respects, successfully imitated them. 

 But in the particular instance of banking they have 

 not been so fortunate, owing more to causes connect- 

 ed with their political institutions than to any want 

 of knowledge, genius, or activity in the people. 



In the year 1716, a bank was erected in Paris Kank of 

 by the celebrated John Law of Lauriston. The Mr Law in 

 object of this bank, according to Mr Law's pro- Pri 

 fessions, was, " to increase the circulation of money, 

 put a stop to the progress of usury, facilitate the 

 exchange between Paris and the provinces, aug- 

 ment the circulation of manufactures, and enable 

 the people to pay more easily the heavy taxes to 

 which they were subjected." The letters paten'. 

 establishing this bank, stipulated, that the stock should 

 consist of 1200 actions, or shares of 1000 crowns ot 

 5000 livres each, at the rate of forty livres the marc ; 

 so that each share was worth 250 sterling, and the 

 whole stock of the bank 300,000 sterling. 



The regulations for the government of this bank 

 were wise and salutary. It was declared, that the 

 bank securities belonging to, as well as the money- 

 lodged by, foreigners, should not be subject to con- 

 fiscation, even in case of war with the nations to 

 which the proprietors belonged ; that all questions 

 relative to the concerns of the bank should be deter- 

 mined by a plurality of votes ; those possessing from 

 five to ten shares to have one vote, from ten to fif- 

 teen two votes, and so on proportionally ; that the 

 accounts should be balanced twice a year, and two 

 general courts held annually, at which the company's 

 affairs should be discussed, and the dividends settled ; 

 that the bank should not undertake any sort of com- 

 merce whatever ; that the notes should be payable at 

 sight, and signed by the director and one proprietor ; 

 but under the revision of an inspector appointed by 

 the government. ' 



This bank, of which Mr Law and his brother 

 William were the principal partner*, assumed the 

 firm of the general bank of Law and Company j and 

 soon obtained the confidence of the public. As the 

 notes they issued, bore on the face of them, that they 

 should he paid in crowns of the weight and standard 

 of the day on which they were granted, a security 

 was thus formed against the arbitrary practice of 

 varying the coin ; and on this account, they were 

 preferred by many to specie. The balance of ex- 

 change with Holland and England, rose in favour of 

 Paris, at the rate of l to 5 per cent. ; ar4 the affairs 



