draught. This commission being repeated 
more than six times in the year, whatever money 
A might raise by this expedient might necessarily 
have cost him something more than 
eight per cent in the year and sometimes a 
great deal more, when either the price of the 
commission happened to rise, or when he was 
obliged to pay compound interest upon the 
interest and commission of former bills. This 
practice was called raising money by circulation
In a country where the ordinary profits of 
stock, in the greater part of mercantile projects
are supposed to run between six and ten per 
cent. it must have been a very fortunate speculation, 
of which the returns could not only 
repay the enormous expense at which the money 
was thus borrowed for carrying it on, but 
afford, besides, a good surplus profit to the 
projector. Many vast and extensive projects
however, were undertaken, and for several 
years carried on, without any other fund to 
support them besides what was raised at this 
enormous expense. The projectors, no doubt
had in their golden dreams the most distinct 
vision of this great profit. Upon their awakening
however, either at the end of their projects
or when they were no longer able to 
carry them on, they very seldom, I believe, 
had the good fortune to find it.[28] 
The bills which A in Edinburgh drew upon 
B in London, he regularly discounted two 
months before they were due, with some bank 
or banker in Edinburgh; and the bills which 
B in London redrew upon A in Edinburgh
he as regularly discounted, either with the 
Bank of England, or with some other banker 
in London. Whatever was advanced upon 
such circulating bills was in Edinburgh advanced 
in the paper of the Scotch banks; and 
in London, when they were discounted at the 
Bank of England in the paper of that bank
Though the bills upon which this paper had 
been advanced were all of them repaid in their 
turn as soon as they became due, yet the value 
which had been really advanced upon the last 
bill was never really returned to the banks 
which advanced it, because, before each bill 
became due, another bill was always drawn 
to somewhat a greater amount than the bill 
which was soon to be paid: and the discounting 
of this other bill was essentially necessary 
towards the payment of that which was soon 
to be due. This payment, therefore, was altogether 
fictitious. The stream which, by means 
of those circulating bills of exchange, had once 
been made to run out from the coffers of the 
banks, was never replaced by any stream which 
really run into them. 
The paper which was issued upon those circulating 
bills of exchange amounted, upon 
many occasions, to the whole fund destined 
for carrying on some vast and extensive project 
of agriculture, commerce, or manufactures; 
and not merely to that part of it which, 
had there been no paper money, the projector 
would have been obliged to keep by him unemployed
and in ready money, for answering 
occasional demands. The greater part of this 
paper was, consequently, over and above the 
value of the gold and silver which would have 
circulated in the country, had there been no 
paper money. It was over and above, therefore, 
what the circulation of the country could 
easily absorb and employ, and upon that account, 
immediately returned upon the banks
in order to be exchanged for gold and silver, 
which they were to find as they could. It 
was a capital which those projectors had very 
artfully contrived to draw from those banks
not only without their knowledge or deliberate 
consent, but for some time, perhaps, without 
their having the most distant suspicion 
that they had really advanced it. 
When two people, who are continually 
drawing and redrawing upon one another, 
discount their bills always with the same banker
he must immediately discover what they 
are about, and see clearly that they are trading
not with any capital of their own, but 
with the capital which he advances to them. 
But this discovery is not altogether so easy 
when they discount their bills sometimes with 
one banker, and sometimes with another, and 
when the two same persons do not constantly 
draw and redraw upon one another, but occasionally 
run the round of a great circle of projectors
who find it for their interest to assist 
one another in this method of raising money