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 L.11,686,800, and its divided 
capital had been raised by different calls 
and subscriptions to L.10,780,000. 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 L.110,000, 
without interest or re-payment. This sum
therefore did not increase either of these 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 these 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 Hamburgh and Holland. Upon one 
occasion, in 1768, it is said to have advanced 
for this purpose, in one week, about 
L.1,600,000, 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 must 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, enable 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 D├Ždalian 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 unskilfulness 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 
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