hundred　thousand　pounds；　or　for　L96；000　a　year　interest；　at　the
  rate　of　eight　per　cent；　and　L4000　a　year　for　the　expense　of
  management。　The　credit　of　the　new　government；　established　by　the
  Revolution；　we　may　believe；　must　have　been　very　low；　when　it　was
  obliged　to　borrow　at　so　high　an　interest。
  In　1697　the　bank　was　allowed　to　enlarge　its　capital　stock　by
  an　engraftment　of　L1；001；171　10s。　Its　whole　capital　stock
  therefore；　amounted　at　this　time　to　L2；201；171　10s。　This
  engraftment　is　said　to　have　been　for　the　support　of　public
  credit。　In　1696；　tallies　had　been　at　forty；　and　fifty；　and　sixty
  per　cent　discount；　and　bank　notes　at　twenty　per　cent。　During　the
  great　recoinage　of　the　silver；　which　was　going　on　at　this　time；
  the　bank　had　thought　proper　to　discontinue　the　payment　of　its
  notes；　which　necessarily　occasioned　their　discredit。
  In　pursuance　of　the　7th　Anne；　c。　7；　the　bank　advanced　and
  paid　into　the　exchequer　the　sum　of　L400；000；　making　in　all　the
  sum　of　L1；600；000　which　it　had　advanced　upon　its　original　annuity
  of　L96；000　interest　and　L4000　for　expense　of　management。　In　1708；
  therefore；　the　credit　of　government　was　as　good　as　that　of
  private　persons；　since　it　could　borrow　at　six　per　cent　interest
  the　common　legal　and　market　rate　of　those　times。　In　pursuance　of
  the　same　act；　the　bank　cancelled　exchequer　bills　to　the　amount　of
  L1；775；027　17s。　10　1/2d。　at　six　per　cent　interest；　and　was　at　the
  same　time　allowed　to　take　in　subscriptions　for　doubling　its
  capital。　In　1708；　therefore；　the　capital　of　the　bank　amounted　to
  L4；402；343；　and　it　had　advanced　to　government　the　sum　of
  L3；375；027　17s。　10　1/2d。
  By　a　call　of　fifteen　per　cent　in　1709；　there　was　paid　in　and
  made　stock　L656；204　Is。　9d。；　and　by　another　of　ten　per　cent　in
  1710；　L501；448　12s。　11d。　In　consequence　of　those　two　calls；
  therefore；　the　bank　capital　amounted　to　L5；559；995　14s。　8d。
  In　pursuance　of　the　3rd　George　I；　c。　8；　the　bank　delivered
  up　two　millions　of　exchequer　bills　to　be　cancelled。　It　had　at
  this　time；　therefore；　advanced　to　government　17s。　10d。　In
  pursuance　of　the　8th　George　1；　c。　21；　the　bank　purchased　of　the
  South　Sea　Company　stock　to　the　amount　of　14；000；000；　and　in　1722；
  in　consequence　of　the　subscriptions　which　it　had　taken　in　for
  enabling　it　to　make　this　purchase；　its　capital　stock　was
  increased　by　L3；400；000。　At　this　time；　therefore；　the　bank　had
  advanced　to　the　public　L9；375；027　17s。　10　1/2d。；　and　its　capital
  stock　amounted　only　to　L8；959；995　14s。　8d。　It　was　upon　this
  occasion　that　the　sum　which　the　bank　had　advanced　to　the　public；
  and　for　which　it　received　interest；　began　first　to　exceed　its
  capital　stock；　or　the　sum　for　which　it　paid　a　dividend　to　the
  proprietors　of　bank　stock；　or；　in　other　words；　that　the　bank
  began　to　have　an　undivided　capital；　over　and　above　its　divided
  one。　It　has　continued　to　have　an　undivided　capital　of　the　same
  kind　ever　since。　In　1746；　the　bank　had；　upon　different　occasions；
  advanced　to　the　public　L11；686；800　and　its　divided　capital　had
  been　raised　by　different　calls　and　subscriptions　to　L10；780；000。
  The　state　of　those　two　sums　has　continued　to　be　the　same　ever
  since。　In　pursuance　of　the　4th　of　George　III；　c。　25；　the　bank
  agreed　to　pay　to　government　for　the　renewal　of　its　charter
  L110；000　without　interest　or　repayment。　This　sum；　therefore；　did
  not　increase　either　of　those　two　other　sums。
  The　dividend　of　the　bank　has　varied　according　to　the
  variations　in　the　rate　of　the　interest　which　it　has；　at　different
  times；　received　for　the　money　it　had　advanced　to　the　public；　as
  well　as　according　to　other　circumstances。　This　rate　of　interest
  has　gradually　been　reduced　from　eight　to　three　per　cent。　For　some
  years　past　the　bank　dividend　has　been　at　five　and　a　half　per
  cent。
  The　stability　of　the　Bank　of　England　is　equal　to　that　of　the
  British　government。　All　that　it　has　advanced　to　the　public　must
  be　lost　before　its　creditors　can　sustain　any　loss。　No　other
  banking　company　in　England　can　be　established　by　act　of
  Parliament；　or　can　consist　of　more　than　six　members。　It　acts；　not
  only　as　an　ordinary　bank；　but　as　a　great　engine　of　state。　It
  receives　and　pays　the　greater　part　of　the　annuities　which　are　due
  to　the　creditors　of　the　public；　it　circulates　exchequer　bills；
  and　it　advances　to　government　the　annual　amount　of　the　land　and
  malt　taxes；　which　are　frequently　not　paid　up　till　some　years
  thereafter。　In　those　different　operations；　its　duty　to　the　public
  may　sometimes　have　obliged　it；　without　any　fault　of　its
  directors；　to　overstock　the　circulation　with　paper　money。　It
  likewise　discounts　merchants'　bills；　and　has；　upon　several
  different　occasions；　supported　the　credit　of　the　principal
  houses；　not　only　of　England；　but　of　Hamburg　and　Holland。　Upon　one
  occasion；　in　1763；　it　is　said　to　have　advanced　for　this　purpose；
  in　one　week；　about　L1；600；000；　a　great　part　of　it　in　bullion。　I
  do　not；　however；　pretend　to　warrant　either　the　greatness　of　the
  sum；　or　the　shortness　of　the　time。　Upon　other　occasions；　this
  great　company　has　been　reduced　to　the　necessity　of　paying　in
  sixpences。
  It　is　not　by　augmenting　the　capital　of　the　country；　but　by
  rendering　a　greater　part　of　that　capital　active　and　productive
  than　would　otherwise　be　so；　that　the　most　judicious　operations　of
  banking　can　increase　the　industry　of　the　country。　That　part　of
  his　capital　which　a　dealer　is　obliged　to　keep　by　him　unemployed；
  and　in　ready　money；　for　answering　occasional　demands；　is　so　much
  dead　stock；　which；　so　long　as　it　remains　in　this　situation；
  produces　nothing　either　to　him　or　to　his　country。　The　judicious
  operations　of　banking　enable　him　to　convert　this　dead　stock　into
  active　and　productive　stock；　into　materials　to　work　upon；　into
  tools　to　work　with；　and　into　provisions　and　subsistence　to　work
  for；　into　stock　which　produces　something　both　to　himself　and　to
  his　country。　The　gold　and　silver　money　which　circulates　in　any
  country；　and　by　means　of　which　the　produce　of　its　land　and　labour
  is　annually　circulated　and　distributed　to　the　proper　consumers；
  is；　in　the　same　manner　as　the　ready　money　of　the　dealer；　all　dead
  stock。　It　is　a　very　valuable　part　of　the　capital　of　the　country；
  which　produces　nothing　to　the　country。　The　judicious　operations
  of　banking；　by　substituting　paper　in　the　room　of　a　great　part　of
  this　gold　and　silver；　enables　the　country　to　convert　a　great　part
  of　this　dead　stock　into　active　and　productive　stock；　into　stock
  which　produces　something　to　the　country。　The　gold　and　silver
  money　which　circulates　in　any　country　may　very　properly　be
  compared　to　a　highway；　which；　while　it　circulates　and　carries　to
  market　all　the　grass　and　corn　of　the　country；　produces　itself　not
  a　single　pile　of　either。　The　judicious　operations　of　banking；　by
  providing；　if　I　may　be　allowed　so　violent　a　metaphor；　a　sort　of
  waggon…way　through　the　air；　enable　the　country　to　convert；　as　it
  were；　a　great　part　of　its　highways　into　good　pastures　and
  corn…fields；　and　thereby　to　increase　very　considerably　the　annual
  produce　of　its　land　and　labour。　The　commerce　and　industry　of　the
  country；　however；　it　must　be　acknowledged；　though　they　may　be
  somewhat　augmented；　cannot　be　altogether　so　secure　when　they　are
  thus；　as　it　were；　suspended　upon　the　Daedalian　wings　of　paper
  money　as　when　they　travel　about　upon　the　solid　ground　of　gold　and
  silver。　Over　and　above　the　accidents　to　which　they　are　exposed
  from　the　unskillfulness　of　the　conductors　of　this　paper　money；
  they　are　liable　to　several　others；　from　which　no　prudence　or
  skill　of　those　conductors　can　guard　them。
  An　unsuccessful　war；　for　example；　in　which　the　enemy　got
  possession　of　the　capital；　and　consequently　of　that　treasure
  which　supported　the　credit　of　the　paper　money；　would　occasion　a
  much　greater　confusion　in　a　country　where　the　whole　circulation
  was　carried　on　by　paper；　than　in　one　where　the　greater　part　of　it
  was　carried　on　by　gold　and　silver。　The　usual　instrument　of
  commerce　having　lost　its　value；　no　exchanges　could　be　made　but
  either　by　barter　or　upon　credit。　All　taxes　having　been　usually
  paid　in　paper　money；　the　prince　would　not　have　wherewithal　either
  to　pay　his　troops；　or　to　furnish　his　magazines；　and　the　state　of
  the　country　would　be　much　more　irretrievable　than　if　the　greater
  part　of　its　circulation　had　consisted　in　gold　and　silver。　A
  prince；　anxious　to　maintain　his　dominions　at　all　times　in　the
  state　in　which　he　can　most　easily　defend　them；　ought；　upon　this
  account；　to　guard；　not　only　against　that　excessive　multiplication
  of　paper　money　which　ruins　the　very　banks　which　issue　it；　but
  even　against　that　multiplication　of　it　which　enables　them　to　fill
  the　greater　part　of　the　circulation　of　the　country　with　it。
  The　circulation　of　every　country　may　be　considered　as
  divided　into　two　different　branches：　the　circulation　of　the
  dealers　with　one　another；　and　the　circulation　between　the　dealers
  and　the　consumers。　Though　the　same　pieces　of　money；　whether　paper
  or　metal；　may　be　employed　sometimes　in　the　one　circulation　and
  sometimes　in　the　other；　yet　as　both