on　such　of　the　proceeds　of　trade　as　were　payable　at　long　dates；　that　banks　pushed　their　notes　into　circulation。　They　required　an　interest　for　exchanging　their　paper　against　that　of　trade；　because　theirs　was　exigible　at　sight；　though　it　was　not　really　paid　before　the　other。　The　discount　required　by　the　bank　served　to　introduce　the　interest　of　money；　and　to　regulate　it　in　the　place。　Bankers；　in　virtue　of　their　credit　alone；　seemed　to　have　capitals　of　almost　immense　extent；　to　offer　in　the　service　of　merchants。　Credit　soon　appeared　to　have　a　creative　power；　and　speculators；　persuaded　that　by　emitting　a　bank　one；　they　added　as　much　to　the　public　wealth　as　by　importing　an　equal　sum　of　money；　delivered　their　minds　to　dreams　dangerous　for　themselves；　and　for　the　states　that　gave　ear　to　them。　They　proposed　the　establishment　of　banks　to　multiply　the　funds　of　trade；　to　provide　for　the　enterprises　of　agriculture；　to　set　labour　every　where　in　motion；　to　increase　the　general　capital；　and　redouble　the　activity　of　industry。　　　　　Governments；　on　their　side；　imagined　that　in　banks　they　had　found　an　open　mine；　from　which　they　might　draw　at　discretion。　At　each　new　season　of　need；　they　stuck　new　bank…notes。　But　they　soon　perceived；　with　astonishment；　that　notes　were　no　longer　received　with　the　same　confidence；　and　were　speedily　carried　back　to　the　bank　for　payment；　and　next；　as　their　custom　generally　is；　they　substituted　their　authority　for　the　nature　of　things。　They　refused　payment　on　demand；　but　they　ordered　each　citizen　to　receive　as　ready　coin；　those　notes　which　had　thus　become　paper　money；　and　they　authorised　every　debtor　to　pay　his　accounts　with　it。　　　　　The　circulation　of　paper　money　became；　in　a　short　time；　nothing　less　than　a　general　bankruptcy。　Notwithstanding　all　the　orders　of　government；　paper　fell　every　day　in　its　proportion　to　silver　or　to　goods。　The　bearers　of　it；　feeling　that　they　had　no　pledge　for　the　values；　the　sign　of　which　they　were　always　presenting；　dreaded　lest　the　paper　should　undergo　a　new　deterioration　in　their　hands；　and　made　haste　to　get　rid　of　it。　Each　lost　and　caused　loss；　each　having　no　longer　any　common　measure　of　value；　became　unable　to　distinguish　the　gain　from　the　loss　of　his　bargain；　and　always　selling　with　advantage；　he　ended　in　ruin。　During　this　time；　coin　disappeared；　goods　themselves　were　exported　from　the　country；　without　giving　any　return；　and　the　expedient；　which　promised　to　create　immense　wealth；　produced　nothing　but　ruin　and　confusion。　　　　　A　fatal　error　had　led　to　all　these　misfortunes。　It　was　imagined　that　credit　had　the　power　of　creating　wealth；　whilst；　in　fact；　credit　never　creates　any　thing；　but　merely　borrows　with　one　hand　to　lend　with　the　other；　that　wealth；　which；　to　be　of　use；　must　have　previously　existed　in　the　state。　Paper　money　can　be　substituted　only　for　the　metallic　money　already　in　existence；　it　is　the　value　of　this　which　it　borrows。　The　banker；　who　finds　credit；　acquires　the　power　to　dispose　of　a　part　of　the　currency　equal　to　the　paper　he　emits。　If　he　in　reality　withdraw　part　of　the　currency　from　circulation；　his　paper　will　remain　there；　if　he　does　not　withdraw　it；　others　will　withdraw　it　for　him；　the　instant　it　becomes　superfluous。　But；　if　this　currency　was　not　in　circulation　at　the　moment　when　his　bank…notes　were　emitted；　he　could　not　borrow　it。　In　that　case；　by　giving　forced　circulation　to　his　paper；　he　depreciates　not　only　this　paper；　but　all　that　was　already　in　the　hands　of　the　public。　　　　　The　money　of　a　country　has　a　determinate　relation　to　the　wealth　of　that　country；　and　to　the　activity　with　which　its　wealth　circulates。　The　same　guineas　serve；　in　the　course　of　a　year；　for　a　great　number　of　different　bargains；　yet　still　there　is　a　necessary　equation　between　the　mass　of　values　sold；　and　the　sum　of　guineas　which　serves　to　pay　them；　multiplied　by　the　rapidity　of　the　circulation。　If　too　many　guineas　exist　in　the　country　for　the　wants　of　the　circulation；　this　is　not　a　reason　why　the　person　holding　them　in　his　coffers　should　keep　them　longer　than　he　has　occasion　so　to　do。　All　useless　stagnation　would　be　so　much　interest　lost　for　him；　and；　therefore；　he　continues　still　to　give　them　circulation；　and　some　one　is　always　at　hand；　who；　not　finding　any　profitable　use　to　make　of　them　in　the　country；　takes　them　out　of　it。　If　exportation　is　forbidden；　a　greater　mass　of　idle　guineas　will　be　kept　within　the　country；　till　the　loss　of　those　unable　to　employ　them　be　great　enough　to　pay　the　risk　of　smuggling。　If　precautions　are　so　well　taken　that　exportation　is　entirely　impossible；　the　whole　money　circulated　in　the　country　will　fall　in　value　till　it　be　reduced　to　the　equation　which　it　cannot　pass；　that　is；　to　the　numerical　value　of　all　the　sales　and　payments　made　within　the　year；　divided　by　the　rapidity　of　circulation。　　　　　In　like　manner；　if　the　money　of　a　country　is　not　sufficient　for　its　circulation；　the　country　will　purchase　money　in　exchange　for　some　one　of　the　values　it　possesses；　just　as　it　would　have　purchased　any　other　kind　of　goods。　It　is　not　the　balance　of　trade　which　can　make　money　enter　or　leave　a　country。　This　balance　is　completely　illusory；　for　it　is　not　true　that　nations　settle　their　accounts　with　each　other。　On　the　contrary；　indeed；　it　often　happens　that　one　is　constantly　a　borrower；　the　other　constantly　a　lender。　And；　the　credit　sales　of　the　most　commercial　being　renewed　from　year　to　year　…　before　the　first　debt　is　extinguished；　a　second　is　already　contracted；　which　is　followed　by　a　third；　and　though　each　is　paid　in　its　turn；　the　purchaser　may　nevertheless；　perpetually　remain　debtor　to　his　seller。　Thus；　sales　on　credit　form　a　capital　which　may　either　increase；　or　be　reimbursed　in　the　inverse　sense　of　other　commercial　speculations。　　　　　Abstracting　all　that　concerns　these　credits；　which　modify　more　than　three…fourths　of　its　commercial　speculations；　the　purchases　of　a　nation　would　be　exactly　balanced　by　its　sales；　because　it　is　as　impossible　for　the　one　always　to　purchase；　and　find　the　source　of　a　perpetual　draining　of　money；　unless　it　work　at　mines；　as　for　the　other　to　sell　always；　and　find　an　employment　for　a　perpetual　importation　of　coined　metal。　Money　is　imported；　and　exported　from　one　nation　to　another；　not　because　it　pays　their　accounts；　but　because　the　one　having　need　of　it；　sells　goods　cheaper；　till　it　has　acquired　enough；　and；　because　the　other；　having　more　than　enough　for　its　circulation；　buys　dearer；　or；　gives　a　greater　quantity　of　guineas　for　the　same　quantity　of　goods；　till　the　equilibrium　is　reestablished。　　　　　But　as　the　emission　of　any　sum　in　bank　notes；　supplies　the　place　of　an　equal　sum　of　money；　the　latter　is　immediately　withdrawn　from　circulation；　and　sold　in　foreign　countries。　So　long　as　there　remains　any　coin　to　be　exported；　credit　may　repeat　its　operation　and　create　new　bank　notes；　when　there　is　no　more　coin　to　export；　the　paper　money；　will；　of　itself；　diminishing　in　value；　seek　the　proper　equation；　and　to　whatever　nominal　sum　its　fabrication　may　be　carried；　it　will　never　sell；　in　the　total　amount；　for　any　thing　more　than　the　pre…existing　total　amount　of　money　which　it　replaces。
  Chapter　6
  Of　Taxation
  The　primary　object　of　political　economy　is　the　development　of　national　wealth；　but　the　object　of　all　governments；　since　they　began　to　bestow　any　attention　on　this　subject；　has　been　to　participate　in　this　wealth；　and　to　acquire　the　disposal　of　a　greater　share　of　the　nation's　annual　revenue。　The　ever　increasing　necessities　of　governments；　and　the　excessive　expense　of　wars；　have　forced　princes　to　load　their　people　with　the　weightiest　possible　yoke。　Taxation；　of　itself　always　an　object　of　repugnance　to　the　subject；　has　become　a　nearly　intolerable　burden；　the　question　is　no　longer　how　to　make　it　easy；　it　is　not　to　do　good；　but　to　the　least　possible　evil；　that　all　the　efforts　of　governments　in　this　respect　are　limited。　　　　　Quesnay's　sect　of　economists；　who　discovered　in　the　net　revenue　of　land　the　solitary　source　of　wealth；　might　also　believe　in　the　advantage　of　a　solitary　species　of　taxation。　They　rightly　observe；　that　government；　in　justice；　ought　to　apply　to　him　who　is　destined　to　pay　the　tax　in　the　long　run；　because；　if　this　tax　is　paid　by　one　citizen；　reimbursed　by　a　second；　who　again　is　reimbursed　by　a　third；　not　only　will　there　be　three　persons　instead　of　one　incommoded　by　this　payment；　but　the　third　will　be　so　much　the　more　incommoded；　as　it　will　be　necessary　for　him　to　indemnify　the　preceding　two　for　their　advances　of　money。　Upon　the　same　principle；　the　economists　called　the　tax　which　weighs　on　the　revenue　of　land　a　direct　tax；　to　all　others　they　gave　the　name　of　indirect；　because　those　taxes　arrive　indirectly　at　the　person　who　pays　them　at　last。　Their　system　has　fallen；　their　definitions　are　no　longer　admitted；　but　their　denominations　have　remained　in　general　use。　　　　　We　have　recognised　but　a　single　source　of　wealth；　which　is　labour；　yet　we　have　not　recognised　but　a　single　class　of　citizens；　to　whom　the　revenues　produced　by　labour　belong。　These　are　distributed　among　all　the　classes　of　the　nation；　they　assume　all　manner　of　forms；　and；　therefore；　it　is　just　that　taxation　should　follow　them　into　all　their　ramifications。　Taxation　ought　to　be　considered　by　the　citizens　of