of circulating bills of exchange, who 
would employ the money in extravagant undertakings
which, with all the assistance that 
could be given them, they would probably 
never be able to complete, and which, if they 
should be completed, would never repay the 
expense which they had really cost, would never 
afford a fund capable of maintaining a 
quantity of labour equal to that which had 
been employed about them. The sober and 
frugal debtors of private persons, on the contrary
would be more likely to employ the money 
borrowed in sober undertakings which 
were proportioned to their capitals, and which, 
though they might have less of the grand and 
the marvellous, would have more of the solid 
and the profitable; which would repay with a 
large profit whatever had been laid out upon 
them, and which would thus afford a fund 
capable of maintaining a much greater quantity 
of labour than that which had been employed 
about them. The success of this operation, 
therefore, without increasing in the 
smallest degree the capital of the country, 
would only have transferred a great part of 
it from prudent and profitable to imprudent 
and unprofitable undertakings
That the industry of Scotland languished 
for want of money to employ it, was the opinion 
of the famous Mr Law. By establishing 
a bank of a particular kind, which he 
seems to have imagined might issue paper to 
the amount of the whole value of all the lands 
in the country, he proposed to remedy this 
want of money. The parliament of Scotland
when he first proposed his project, did not 
think proper to adopt it. It was afterwards 
adopted, with some variations, by the Duke 
of Orleans, at that time regent of France. 
The idea of the possibility of multiplying paper 
money to almost any extent was the real 
foundation of what is called the Mississippi 
scheme, the most extravagant project, both of 
banking and stock-jobbing, that perhaps the 
world ever saw. The different operations of 
this scheme are explained so fully, so clearly, 
and with so much order and distinctness, by 
Mr Du Verney, in his Examination of the 
Political Reflections upon commerce and finances 
of Mr Du Tot, that I shall not give 
any account of them. The principles upon 
which it was founded are explained by Mr 
Law himself, in a discourse concerning money 
and trade, which he published in Scotland 
when he first proposed his project. The 
splendid but visionary ideas which are set forth 
in that and some other works upon the same 
principles, still continue to make an impression 
upon many people, and have, perhaps, in 
part, contributed to that excess of banking
which has of late been complained of, both in 
Scotland and in other places. 
The Bank of England is the greatest bank 
of circulation in Europe. It was incorporated, 
in pursuance of an act of parliament, by a 
charter under the great seal, dated the 27th of 
July 1694. It at that time advanced to government 
the sum of L.1,200,000 for an annuity 
of L.100,000, or for L.96,000 a-year, 
interest at the rate of eight per cent. and 
L.4,000 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 ingraftment of 
L.1,001,171 : 10s. Its whole capital stock
therefore, amounted at this time to L.2,201,171 : 10s. 
This ingraftment 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.[29] During the great re-coinage 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 L.400,000; making in all the sum 
of L.1,600,000, which it had advanced upon 
its original annuity of L.96,000 interest, and 
L.4,000 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 L.1,775,027 17s. 10½d. 
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 
L.4,402,343; and it had advanced to government 
the sum of L.3,375,027 : 17 : 10½. 
By a call of fifteen per cent. in 1709, there 
was paid in, and made stock, L.656,204 : 1 : 9d.; 
and by another of ten per cent. in 1710, 
L.501,448 : 12 : 11. In consequence of those 
two calls, therefore, the bank capital amounted 
to L.5,559,995 : 14 : 8. 
In pursuance of the 3d 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 L.5,375,027 : 17 : 10d. 
In pursuance of the 8th George I. c. 21, 
the bank purchased of the South-sea company
stock to the amount of L.4,000,000; 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 L.3,400,000. At this time, therefore, the 
bank had advanced to the public L.9,375,027 17s. 10½d.; 
and its capital stock amounted 
only to L.8,959,995 : 14 : 8. It was upon 
this occasion that the sum which the bank had