BAN 



dred tlioufand pounds. A5 tliofe notes fervp all the pur- 

 pofes of money, his debtors pay him the fame intereft as if 

 he had lent them fo much money. This intered is the 

 fource of his gain. Though fome of thofe notes are con- 

 tinually coming back upon him for payment, part of them 

 continue to circulate for months »nd vears tOTethcr. 

 Though he has generally in circ>.il;ftion, therefore, notes to 

 the extent of a hundred thoufand pound<;, twenty tlioufand 

 pounds in gold and filver may, frequently, be a fufficient 

 provillon for anf\rcriag occafional demands. By tliis ope- 

 ration, therefore, twenty thoufand pounds in gold and fiiver 

 perform all the funftions which a hundred thoufand could 

 otherwife have performed. The fame exchanges may be 

 made, the fame quantity jof confumable goods may be cir- 

 culated and d:ftributed to their' proper confumers, by means 

 of his promiffor)' notes, to tiie value of a hundred thou- 

 fand pounds, as by an equal value of gold and hlver money. 

 Eighty thoufand pounds of gold and filver, therefore, can, 

 in this manner, be fpared from the circulation of the coun- 

 try ; and if different operations of the fame kind (hould, at 

 the fame time, be carried on by many different banks and 

 bankers, the whole circulation mav thus be condu'-.icd with 

 a fitth part only of the gold and Clver which would other- 

 wife have been requifite. 



Let us fuppofe, for example, that the whole circulating 

 money (jf fome particular country' amounted, at a particular 

 time, to one million fterling, that fum being then fufficient 

 for circulating the whole annual produce of their land and 

 labour. Let us fuppofe too, that fome time thereafter, 

 different banks and bankers iffued promiffory notes, payable 

 to the bearer, to the extent of one million, referving in their 

 different coffers two hundred thoufand pounds foranfwering 

 occaiional demands. There would remain, therefore, in cir- 

 tulation, eight hundred thoufand pounds in gold and filver, 

 and a million of bank notes, or eighteen hundred thoufand 

 pounds of paper and money together. But the annual pro- 

 duce of tlie land and labour of the countrj- had before re- 

 quired onlv one million to circulate and diilribute it to its 

 proper confumers, and that annual produce cannot be imme- 

 diately augmented by thofe operations of banking. One 

 million, therefore, will be fufficient tocircnkte it after them. 

 The goods to be bought and fold being precifely the fame 

 as before, the fame quantity of money will be fufficient for 

 buying and felling them.. The channel of circulation, if I 

 may be allowed fuch an exprelTlon, will remain precifely the 

 fame as be.'^ore. One million we have fuppofcd fufficient to 

 fill that channel. Whatever, therefore, is poured into it 

 beyond this fum, cannot run in it, but mull overfiow. One 

 million eight hundred thoufand pounds are poured into it. 

 Eight hundred thoufand pounds therefore mud overflow, 

 that fum being over and above what can be employed in the 

 circulation of the country. But though this fum cannot be 

 employed at home, it is too valuable to be allowed to lie 

 idle. It will, therefore, be fcnt abroad, in order to feek 

 that profitable employment which it cannot find at home. 

 But the paper cannot, go abroad ; becaufe at adiftance from 

 the banks whkh iffue it, and from the cnintry in which 

 payment of it can be exafted by law, it will not be received 

 in common paym.ents. Gold and filver, therefore, to the 

 amount of eight hundred thoufand pounds, will be fent 

 abroad, and the channel of home circulation will remain 

 f!?cd with a million of paper, inftcad of a million of thofe 

 metals which filled it before. 



But though fo great a quantity of gold and filver is thus 

 fent abroad, wc muft not imagine that it is funt abroad 

 for nothing, or that its proprietors make a prcfent of 

 it to foreign nations. They will exchange it for fo- 



B A N 



reign goods of fome kind or another, in order to fupply 

 the confumption cither ol fome other foreign country, or 

 of their own. 



If they employ it in purchafing goods in one foreign 

 countrj- in oid.r to fupply the confumption of another, or 

 in what is called the carrying trade, whatever profit they 

 make will be an addition to the neat revenue of their own 

 country. It is like a new fund, created for carrying on a 

 new trade ; domcftic bufinefa being now tranfafted by pa- 

 per, and the gold and filver being converted into a fuud .'or 

 this new trade. 



If they employ it in purchafing foreign goods for home 

 con&imption, they mav cither, full, purchalc fuch goods as 

 arc likely to be confumcd by idle people who produce no- 

 thing, fuch ns foreign wines, foreign filks, &c. ; or, fe- 

 condly, they may purchafe an additional flock of materials, 

 tools, and provifions, in order to maintain and employ an 

 additional number of iiidiiftrious people, who re-produce, 

 with a profit, the value of their annual confumption. 



So far as it is employed in the firll way, it promotes pro- 

 digality, incrcafes cxpcnce and confumption, without in- 

 creafiiig produdlion, or cllablifhing any permanent fund 

 for fupporting that cxpence, and is in every rtfpctl hurt- 

 ful to fociety. 



So far as it is employed in the fecond way, it promotes 

 indullry ; and though it increafes the cont'un-ption of the 

 fociety, it provides a permanent fund for fupporting that 

 confumption, the people who coufumc, re-producmg, with 

 a profit, the whole value of their annual confumption. The 

 grofs revenue of the fociety, the annual produce of their 

 land and labour, is iucreafed by the whole value which the 

 labour of thofe workmen adds to the materials upon which 

 they are employed ; and their neat revenue by wnzt remains 

 of this value, after dtduiSiug what is neceffary for fupport- 

 ing the tools and inftruments of their trade. Sxith's 

 Wealth of Nations, vol. i. p. 434, &c. 



In Italy, the employment of a banker, cfpecially in repub- 

 lics, does not derogate from nobility ; and hence it is, that 

 mofl of the cadets, or younger fons of pcrfons of condition, 

 undertake it for the fupport of tiieir family. The nobility 

 of Venice and Genoa were for a long time the chief bankers 

 in the other countries of Europe. 



The ancient bankers were called argenlarii, and nummvla- 

 ril ; and by the Greeks t,-zt!^!t»i, xoX>.i/i3iro", and *.^,v:r,- 

 poi;Svi. Their chief bufinefs was to put out the money of 

 private perfons to intereft ; they had th'.ir boards and benchee 

 for thispurpofe in all thf markets and public places, where 

 thev took in the money from fome to lend it to otliers. 

 The Romans had two kinds of bankers, though their office 

 was much more extenfive than that of the bankers amouj 

 us, theirs being that of public officers, in whom were 

 united the funi;ions of a broker, agent, banker, and notary ; 

 managing the exchange, taking in money, affifiing in buy- 

 ing and felling, and drawing up the writings neceffar)- on all 

 thefe occafions. 



Bankers in the Court of Rome, are perfons authorized, 

 cxcluiive of all others, to'folicit and procure by their cor- 

 refpondents at Rome, all bulls, difpenfations, and other 

 afts difpatched at the p pal datary, or in the legatefhip of 

 Avignon ; they aie difperfed in all the cities of France, 

 where there is a parliament, or a prefidial ; and were ereAcd 

 into a regular and hereditary office, by an edidt ir»l673. 



They owe their origin to' the Guelphs, who took llielter 



at Avignon, and in other cities within the obedience of the 



pope, in the time of the civil wars in Italy. The favoiir 



they were ia with the pontiffs, for having clpoufeJ the pa- 



' pal 



