pounds, the four thousand pounds which 
are over and above what the circulation can 
easily absorb and employ, will return upon it 
almost as fast as they are issued. For answering 
occasional demands, therefore, this 
bank ought to keep at all times in its coffers
not eleven thousand pounds only, but fourteen 
thousand pounds. It will thus gain nothing 
by the interest of the four thousand 
pounds excessive circulation; and it will lose 
the whole expense of continually collecting 
four thousand pounds in gold and silver, which 
will be continually going out of its coffers as 
fast as they are brought into them. 
Had every particular banking company always 
understood and attended to its own particular 
interest, the circulation never could 
have been overstocked with paper money. But 
every particular banking company has not always 
understood or attended to its own particular 
interest, and the circulation has frequently 
been overstocked with paper money
By issuing too great a quantity of paper, of 
which the excess was continually returning
in order to be exchanged for gold and silver
the Bank of England was for many years together 
obliged to coin gold to the extent of 
between eight hundred thousand pounds and 
a million a-year; or, at an average, about 
eight hundred and fifty thousand pounds
For this great coinage, the bank (in consequence 
of the worn and degraded state into 
which the gold coin had fallen a few years 
ago) was frequently obliged to purchase gold 
bullion at the high price of four pounds an 
ounce, which it soon after issued in coin at 
L.3 : 17 : 10½ an ounce, losing in this manner 
between two and a half and three per 
cent. upon the coinage of so very large a sum
Though the bank, therefore, paid no seignorage
though the government was properly at 
the expense of this coinage, this liberality of 
government did not prevent altogether the expense 
of the bank
The Scotch banks, in consequence of an excess 
of the same kind, were all obliged to employ 
constantly agents at London to collect 
money for them, at an expense which was seldom 
below one and a half or two per cent
This money was sent down by the waggon
and insured by the carriers at an additional expense 
of three quarters per cent. or fifteen 
shillings on the hundred pounds. Those agents 
were not always able to replenish the 
coffers of their employers so fast as they were 
emptied. In this case, the resource of the 
banks was, to draw upon their correspondents 
in London bills of exchange, to the extent of 
the sum which they wanted. When those 
correspondents afterwards drew upon them 
for the payment of this sum, together with 
the interest and commission, some of those 
banks, from the distress into which their excessive 
circulation had thrown them, had sometimes 
no other means of satisfying this draught
but by drawing a second set of bills, either 
upon the same, or upon some other correspondents 
in London; and the same sum, or rather 
bills for the same sum, would in this 
manner make sometimes more than two or 
three journeys; the debtor bank paying always 
the interest and commission upon the whole 
accumulated sum. Even those Scotch banks 
which never distinguished themselves by their 
extreme imprudence, were sometimes obliged 
to employ this ruinous resource
The gold coin which was paid out, either 
by the Bank of England or by the Scotch 
banks, in exchange for that part of their paper 
which was over and above what could be employed 
in the circulation of the country, being 
likewise over and above what could be employed 
in that circulation, was sometimes sent 
abroad in the shape of coin, sometimes melted 
down and sent abroad in the shape of bullion
and sometimes melted down and sold to the 
Bank of England at the high price of four 
pounds an ounce. It was the newest, the 
heaviest, and the best pieces only, which were 
carefully picked out of the whole coin, and 
either sent abroad or melted down. At home, 
and while they remained in the shape of coin
these heavy pieces were of no more value than 
the light; but they were of more value abroad
or when melted down into bullion at home. 
The Bank of England, notwithstanding their 
great annual coinage, found, to their astonishment
that there was every year the same scarcity 
of coin as there had been the year before; 
and that, notwithstanding the great quantity 
of good and new coin which was every year 
issued from the bank, the state of the coin
instead of growing better and better, became 
every year worse and worse. Every year they 
found themselves under the necessity of coining 
nearly the same quantity of gold as they 
had coined the year before; and from the continual 
rise in the price of gold bullion, in 
consequence of the continual wearing and clipping 
of the coin, the expense of this great annual 
coinage became, every year, greater and 
greater. The Bank of England, it is to be 
observed, by supplying its own coffers with 
coin, is indirectly obliged to supply the whole 
kingdom, into which coin is continually flowing 
from those coffers in a great variety of 
ways. Whatever coin, therefore, was wanted 
to support this excessive circulation both of 
Scotch and English paper money, whatever 
vacuities this excessive circulation occasioned 
in the necessary coin of the kingdom, the 
Bank of England was obliged to supply them. 
The Scotch banks, no doubt, paid all of them 
very dearly for their own imprudence and inattention: 
but the Bank of England paid very 
dearly, not only for its own imprudence, but 
for the much greater imprudence of almost all 
the Scotch banks
The over-trading of some bold projectors 
in both parts of the united kingdom, was the