400 
is the intereft of all banks to proportion 
their -_paper-circulation and difcounts to 
the fair demand, and to the circumftances 
of acountry. Ifa bank iffue paper ex- 
ceeding the wants of thofe among whom it 
“as to circulate, the furplus will fpeedily 
and continually return for payment upon 
that bank, which muft, to anfwer their de- 
mand, keep a quantity of cafh beyond the 
ufual proportion. But bankers have not 
always been fenfible of this truth; and the 
neceility of making good their engage- 
ments in cath feems proper to remind them 
of it. Indeed, with few private bankers 
could the power be fafely entrufted of if- 
fuing notes not payable when due in fub- 
jtantial value. The privilese granted to 
the Bank of England has been exercifed 
$n a manner which juftifies the confidence 
yepofed in its directors. Yet, I have 
dearcely any doubt, that the circulation is 
everftocked with paper. It may be faid, 
that the iffue of bank-notes above 11. and 
al. value is very little increafed, and that 
thofe of 1]. and zl. only fupply the place 
ef fo much cafh withdrawn from circula- 
tion. Let it; however, be confidered, that 
from other quarters a great addition has 
béen made to the paper-currency. The 
number of country- bankers has apparent- 
ly been every year increafing ; and, as they 
Vikewife have iflued notes tor fmall fums, 
is it not to be prefumed, that generally the 
mmount iffued by each houfe has been 
larger than formerly? It is impoffible 
with the data that are now accefjible to 
- form any accurate calculations-upon this 
fubject, but, I am perfuaded, that the pre-- 
fent amount of country bank notes very 
much exceeds their amount in 1797. Pri- 
vate bankers ftand in the fame predicament 
now as formerly. They mutt difcharge 
their engagements with cafh, or with 
Bank of England notes, which they mutt 
purchafe generally with fubftantial pro- 
perty. If, therefore, thofe bankers over- 
fiock the circulation, they fuffer for their 
mifconduét. But the temptation: to. iffue 
an excefs of paper has been great, and, I 
imagine, that many have thus injured 
both themfelres and the public. They 
cen at leaft fafely fupply the circulation of 
the country around them to its full extent, 
-and by that means exclude from thence a 
quantity of Bank cf England notes. 
Country-bankers, befides, extend their 
Gifcounts in proportion as they augment 
the iffue of their paper, and London- 
benkers difcount more or lefs freely accord- 
ing to the liberality with which the Bank 
of England treats them. 
Netwithfanding the opinion of fome 
x 
Mr. Hun? s fecond Letter on the Banf. 
7 
{[Dec. 1 
very refpectable men, I conceive that the 
Bank may be too liberal in its affifiance 
to the commercial world. It cannot in- — 
veftigate the hiftory of every bill that it 
difcounts. Unavoidably therefore it hap- 
pens, that many of thote bills do not re- 
prefent property. The money befides, 
which it advances, is not always employ- 
ed advantageoufly to the country. By 
purchafing commodities, not to tranfport 
them to other places where they are more 
wanted, nor to break them out into {mall 
quantities for public accommodation, nor 
to perform any manufa€turing operations 
upon them, but to hold them till a profit 
can be obtained, by felling them to fome 
other dealer; by-this kind of trade, I fay, 
_ no public advantage is likely to be gained. 
Very little labour is thus employed, and 
conlequently very Jittle real vaiue is added 
to the commodities. In fome cafes, that 
is to fay, when fuch a trade anfwers, the 
confumers will pay for articles that are 
the fubjects of it a very advanced price, 
which will include the profits of all thofe 
middle dealers, Often, however, that line 
of bufinefs mut produce difappointment 
and ruin to the parties engaged in it, be-~ 
fides embarraffment and diftreis to others 
connetted with them. A number of per- 
fons are always to be found prone to {pe- 
culation—during war, perhaps, they are 
particularly numerous—-and when much 
money is to be borrowed, they will gene- 
rally obtain a fhare. Thofe articles 
which are of the moft neceflary and exten- 
five confumption, and which can with fa- 
cility and fafety be kept for fome time, 
are the only profitable fubje&ts of this 
trafic, When it isknown that the quan- 
tity of corn in a country is not equal to 
the ordinary confumption of its inhabi- 
tants—when, from the dearnefs of other 
provifions, that confumption is likely to 
be increafed—and when there is no-pro- 
{peét, that, by afpeedy importation, the 
fupply would be brought te equal the de- . 
mand; then {peculators may engage in the 
corn-trade with every chance of fuccels, | 
A {mall deficiency in the market always 
occafions a more than proportionate ad- 
vance in the, price of this indifpenfable 
commodity. ‘The trade of fpeculators, 
indeed, can only completely fucceed, while 
the prices continue in general,.to advance 5 
and, as that cannot be tne cafe for any very. 
long {pace of time, they muft take care ta 
get out of the concern before the tide fets 
againftthem. The public wil] judge whe- 
ther fuch atrade has, during thefe laft few 
years, been extenfively carried on at Mark- 
Jane, and in other places. In my opinion, 
CN on ae 
