（3。iv。3）Theseareallobviouscauses。Thereisanothercause，whichrequiresrathermore
explanation。Iftwocountriescanbothofthemproducetwocommodities，corn，forexample，and
cloth，butnotbothcommodities，withthesamecomparativefacility，thetwocountrieswillfind
theiradvantageinconfiningthemselves，eachtooneofthecommodities，barteringfortheother。
Ifoneofthecountriescanproduceoneofthecommoditieswithpeculiaradvantages，andthe
othertheotherwithpeculiaradvantages，themotiveisimmediatelyapparentwhichshould
induceeachtoconfineitselftothecommoditywhichithaspeculiaradvantagesforproducing。
Butthemotivemaynolessexist，whereoneofthetwocountrieshasfacilitiessuperiortothe
otherinproducingbothcommodities。
（3。iv。4）Bysuperiorfacilities，Imean，thepowerofproducingthesameeffectwithless
labour。
Theconclusion，too，willbethesame，whetherwesupposethelabourtobemoreorlesshighly
paid。SupposethatPolandcanproducecornandclothwithlesslabourthanEngland，itwillnot
followthatitmaynotbetheinterestofPolandtoimportoneofthecommoditiesfromEngland。
Ifthedegree，inwhichitcanproducewithlesslabour，isthesameinbothcases；if，for
example，thesamequantityofcornandclothwhichPolandcanproduce，eachwith100days’
labour，requireseach150days’labourinEngland，Polandwillhavenomotivetoimporteither
fromEngland。Butif，atthesametimethatthequantityofcloth，which，inPoland，isproduced
with100days’labour，canbeproducedinEnglandwith150days’labour；thecorn，whichis
producedinPolandwith100days’labour，requires200days’labourinEngland；inthatcase，it
willbetheinterestofPolandtoimportherclothfromEngland。Theevidenceofthese
propositionsmaythusbetraced。
（3。iv。5）Iftheclothandthecorn，eachofwhichrequired100days’labourinPoland，required
each150days’labourinEngland，itwouldfollow，thattheclothof150days’labourinEngland，
ifsenttoPoland，wouldbeequaltotheclothof100days’labourinPoland：ifexchangedfor
corn，therefore，itwouldexchangeforthecornofonly100days’labour。Butthecornof100
days’labourinPolandwassupposedtobethesamequantitywiththatof150days’labourin
England。With150days’labourincloth，therefore，Englandwouldonlygetasmuchcornin
Polandasshecouldraisewith150days’labourathome；andshewould，onimportingit，have
thecostofcarriagebesides。Inthesecircumstancesnoexchangewouldtakeplace。
（3。iv。6）If，ontheotherhand，whiletheclothproducedwith100days’labourinPolandwas
producedwith150days’labourinEngland，thecornwhichwasproducedinPolandwith100
days’labourcouldnotbeproducedinEnglandwithlessthan200days’labour；anadequate
motivetoexchangewouldimmediatelyarise。WithaquantityofclothwhichEnglandproduced
with150days’labour，shewouldbeabletopurchaseasmuchcorninPolandaswasthere
producedwith100days’labour；butthequantity，whichwasthereproducedwith100days’
labour，wouldbeasgreatasthequantityproducedinEnglandwith200days’labour。Ifthe
exchange，however，wasmadeinthismanner，thewholeoftheadvantagewouldbeonthepart
ofEngland；andPolandwouldgainnothing，payingasmuchfortheclothshereceivedfrom
England，asthecostofproducingitforherself。
（3。iv。7）ButthepowerofPolandwouldbereciprocal。Withaquantityofcornwhichcosther
100
days’labour，equaltothequantityproducedinEnglandby200days’labour，shecouldinthe
supposedcasepurchase，inEngland，theproduceof200days’labourincloth。Theproduceof
150days’labourinEnglandinthearticleofclothwouldbeequaltotheproduceof100days’
labourinPoland。If，withtheproduceof100days’labour，shecouldpurchase，nottheproduceof
150，buttheproduceof200，shealsowouldobtainthewholeoftheadvantage，andEngland
wouldpurchasecorn，whichshecouldproduceby200days’labour，withtheproductofasmany
days’labourinothercommodities。Theresultofcompetitionwouldbetodividetheadvantage
equallybetweenthem。
（3。iv。8）Supposethefollowingcase：That10yardsofbroadclothpurchase15yardsoflinen
in
England；and20yardsinGermany。Inexchanging10yardsofEnglishbroadclothforthe
equivalentofGermanlinen，asaving，totheamountof5yardsoflinen，istheresultofthe
bargain；anditisevidentthattheadvantagewillbeshareduponthefollowingprinciples。In
Englandlinenwillfall，inrelationtocloth。，fromtheknowledgethat10yardsofclothwill
purchasemorethan15yardsoflineninGermany；andinGermanylinenwillriseascompared
withcloth，fromaknowledgethat20yardsoflinen，ifsenttoEngland，willpurchasemorethan
10yardsofcloth。Itistheinevitableeffectofsuchaninterchangetobringtherelativevalueof
thetwocommoditiestoalevelinthetwocountries；thatis，tomakethepurchasingpowerof
lineninrespecttocloth，andofclothinrespecttolinen，thesameinboth；batingthedifference
inthecostofcarriage，eachcountrypayingthecostofthecarriageofthecommoditywhichit
imports，andthevalueofthatarticlebeingsomuchhigherinthecountrywhichimportsthanin
thatwhichexportsit。
（3。iv。9）Toproduceexchange，therefore，theremustbetwocountries，andtwocommodities。
（3。iv。10）Whenbothcountriescanproducebothcommodities，itisnotgreaterabsolute，but
greaterrelative，facility，thatinducesoneofthemtoconfineitselftotheproductionofoneofthe
commodities，andtoimporttheother。
（3。iv。11）Whenacountrycaneitherimportacommodity，orproduceitathome，itcompares
the
costofproducingathomewiththecostofprocuringfromabroad；ifthelattercostislessthan
thefirst，itimports。
（3。iv。12）Thecostatwhichacountrycanimportfromabroaddepends，notuponthecostat
whichtheforeigncountryproducesthecommodity，butuponwhatthecommoditycostswhichit
sendsinexchange，comparedwiththecostwhichitmustbeattoproducethecommodityin
question，ifitdidnotimportit。
（3。iv。13）IfaquarterofcornisproducedinEnglandwith50days’labour，itmaybeequally
her
interesttoimportcornfromPoland，whetheritrequires，inPoland，50days’labour，or60，or40，
oranyothernumber。Heronlyconsiderationis，whetherthecommoditywithwhichshecan
importaquartercostsherlessthan50days’labour。
（3。iv。14）Thus，iflabourinPolandproducecornandcloth，intheratioofeightyardstoone
quarter；but，inEngland，intheratiooftenyardstoonequarter，exchangewilltakeplace。
（3。iv。15）Thepracticalconclusionmaybecommodiouslyancorrectlystatedthus：
（3。iv。16）Wheneverthepurchasingpowerofanycommoditywithrespecttoanotherisless，
in
oneoftwocountries，thanitisintheother，itistheinterestofthosecountriestoexchangethese
commoditieswithoneanother。
（3。iv。17）Unlessthedifferenceofpurchasingpower，whichrendersittheinterestofnations
to
bartercommoditieswithoneanother，besufficientlygreattocovertheexpenseofcarriage，and
somethingmore，noadvantageisobtained。
SectionV。TheCommoditiesImportedaretheCauseofthe
BenefitsDerivedfromaForeignTrade（3。v。1）Fromwhatisstatedintheprecedingchapter，onegeneral，orratheruniversal，
proposition
maybededuced。Thebenefitwhichisderivedfromexchangingonecommodityforanother，
arises，inallcases，fromthecommodityreceivednotfromthecommoditygiven。Whenone
countryexchanges，inotherwords，whenonecountrytrafficswithanother，thewholeofits
advantageconsistsinthecommoditiesimported。Itbenefitsbytheimportation，andbynothing
else。
（3。v。2）Thisseemstobesoverynearlyaself—evidentproposition，astobehardlycapableof
beingrenderedmoreclearbyillustration；andyetitissolittleinharmonywithcurrentand
vulgaropinions，thatitmaynotbeeasybyanyillustration，togainitadmissionintocertain
minds。
（3。v。3）Whenamanpossessesacertaincommodity，hecannotbenefithimselfbygivingit
away。
Itseemstobeimplied，therefore，intheveryfactofhispartingwithitforanothercommodity，
thatheisbenefitedbywhathereceives。Hisowncommoditybemighthavekept，ifithadbeen
valuedbyhimmorethanthatforwhichheexchangesit。Thefactofhischoosingtohavethe
othercommodityratherthanhisown，isaproofthattheotheristohimmorevaluablethanhis
own。
（3。v。4）Thecorrespondingfactsareevidenceequallyconclusiveinthecaseofnations。When
one
nationexchangesapartofitscommoditiesforapartofthecommoditiesofanothernation，the
nationcangainnothingbypartingwithitscommodities；allthegainmustconsistinwhatit
receives。Ifitbesaidthatthegainconsistsinreceivingmoney，itwillpresentlyappear，fromthe
doctrineofmoney，thatanationderivesnoadvantage，butthecontrary，frompossessingmore
thanitsdueproportionofthepreciousmetals。
（3。v。5）Inimportingcommoditieswhichthecountryitselfiscompetenttoproduce，asinthe
case，supposedabove，oftradewithPoland，wesawthatEnglandwouldimporthercornfrom
Poland，ifshethusobtained，withtheproduceofsomanydays’labourincloth，asmuchcornas
itwouldhaverequiredagreaternumberordays’labourtoproduceinEngland。Ifithadso
happened，thatshecouldprocureinPolandwiththecloth，onlyasmuchcornasshecould
producewiththesamequantityoflabourathome，shewouldhavehadnoadvantageinthe
transaction。Heradvantagewouldarise，notfromwhatsheshouldexport，butwhollyfromwhat
sheshouldimport。
（3。v。6）Thecaseinwhichacountryimportscommodities，whichsheherselfisincompetent
to
produce，isofstillmoresimpleinvestigation。Thatcountry，or，moreproperlyspeaking，the
peopleofthatcountry，havecertaincommoditiesoftheirown，butthesetheyarewillingtogive
forcertaincommoditiesofothercountries。Theypreferhavingthoseothercommodities。They
arebenefited，therefore，notbywhattheygiveaway；thatitwouldbeabsurdtosay；butbywhat
theyreceive。
SectionVI。ConvenienceofaParticularCommodity，asa
MediumofExchange（3。vi。1）Inexchangingcommoditiesforoneanotherdirectly，orinthewayofbarter，the
wantsof
individualscouldnotbeeasilysupplied。Ifamanhadonlysheeptodisposeof；andwanted
bread，oracoat；hemightfindhimselfsubjecttoeitheroftwodifficulties：first，theman
possessingthearticlewhichhewishedtoobtain，mightbeunwillingtoacceptofasheep；or，
secondly，thesheepmightbeofmorevaluethanthearticlewhichhewishedtoobtain，andcould
notbedivided。
（3。vi。2）Toobviatethesedifficulties，itwouldbefortunateifacommoditycouldbefound，
which
everyman，whohadgoodstodisposeof，wouldbewillingtoreceive，andwhichcouldbe
dividedintosuchquantities，aswouldadaptthemselvestothevalueofthearticleswhichhe
wishedtoobtain。Inthiscase，themanwhobadthesheep，andwantedbreadoracoat，insteadof
offeringhissheeptoobtainthem，wouldfirstexchangeitfortheequivalentquantityofthisother
commodity，andwiththathewouldpurchasethebreadandotherthingsforwhichhehad
occasion。
（3。vi。3）This，then，isthetrueideaofamediumofexchange。Itissomeonecommodity，
which，
inordertoeffectanexchangebetweentwoothercommodities，isfirstreceivedinexchangefor
theone，andthengiveninexchangefortheother。
（3。vi。4）Certainmetals，gold，forexample，andsilver，werefoundtounite，inasuperior
degree，
allthequalitiesdesiredinamediumofexchange。Theywerecommoditieswhicheveryman，
whohadgoodstodisposeof，waswillingtoreceiveinexchange。Theycouldbedividedinto
suchportionsassuitedanyquantityofothercommoditieswhichthepurchaserdesiredtoobtain。
Theypossessedthefurtherrecommendation，byincludingagreatvalueinasmallbulk，ofbeing
veryportable。Theywerealsoveryindestructible；andlessthanalmostanyothercommodities
liabletofluctuationsofvalue。Fromthesecauses，goldandsilverhaveformedtheprincipal
mediumofexchangeinallpartsoftheglobe。
（3。vi。5）Thepreciousmetalswereliabletobemixedwithbasermetalsinamannerwhichit
was
noteasytodetect；andthusalessvaluewasapttobereceivedthanthatwhichwasunderstood
tobeso。Itwasalsofoundinconvenienttoperformtheactofweighingeverytimethata
purchasewastobemade。Anobviousexpedientwascalculatedtoremedybothinconveniences。
Metalmightbepreparedofadeterminedfineness；itmightbedividedintoportionsadoptedto
allsortsofpurchases；andastampmightbeputuponit，denotingbothitsweightandits
fineness。Itisobvious，thattheputtingofthisstampcouldonlybeentrustedtoanauthorityin
whichthepeoplehadconfidence。Thebusinesshasgenerallybeenundertakenbygovernments，
andkeptexclusivelyintheirownhands。Thebusinessofputtingthepreciousmetalsinthemost
convenientshape，forservingasthemediumofexchange，hasbeendenominatedcoining；and
thepiecesintowhichtheyaredividedhaveobtainedtheappellationofmoney。
SectionVII。WhatRegulatestheValueofMoney（3。vii。1）Byvalueofmoney，isheretobeunderstoodtheproportioninwhichitexchanges
for
othercommodities，orthequantityofitwhichexchangesforacertainquantityofotherthings。
（3。vii。2）Itisnotdifficulttoperceive，thatitisthetotalquantityofthemoneyinanycountry，
whichdetermineswhatportionofthatquantityshallexchangeforacertainportionofthegoods
orcommoditiesofthatcountry。
（3。vii。3）Ifwesupposethatallthegoodsofthecountryareononeside，allthemoneyonthe
other，andthattheyareexchangedatonceagainstoneanother，itisobviousthatone—tenth，or
one—hundredth，oranyotherpartofthegoods，willexchangeagainstone—tenth，oranypartofthe
wholeofthemoney；andthatthistenth，&；c。willbeagreatquantityorsmall，exactlyin
proportionasthewholequantityofthemoneyinthecountryisgreatorsmall。Ifthiswerethe
stateofthefacts，therefore，itisevidentthatthevalueofmoneywoulddependwhollyuponthe
quantityofit。
（3。vii。4）Itwillappearthatthecaseispreciselythesameintheactualstateofthefacts。The
wholeofthegoodsofacountryarenotexchangedatonceagainstthewholeofthemoney；the
goodsareexchangedinportions，ofteninverysmallportions，andatdifferenttimes，duringthe
courseofthewholeyear。Thesamepieceofmoneywhichispaidinoneexchangeto—day，may
bepaidinanotherexchangeto—morrow。Someofthepieceswillbeemployedinagreatmany
exchanges，someinveryfew，andsome，whichhappentobehoarded，innoneatall。Therewill，
amidallthesevarieties，beacertainaveragenumberofexchanges，thesamewhich，ifallthe
pieceshadperformedanequalnumber，wouldhavebeenperformedbyeach；thataveragewe
maysupposetobeanynumberweplease；say，forexample，ten。Ifeachofthepiecesofthe
moneyinthecountryperformtenpurchases，thatisexactlythesamethingasifallthepieces
weremultipliedbyten，andperformedonlyonepurchaseeach。Aseachpieceofthemoneyis
equalinvaluetothatwhichitexchangesfor，ifeachperformstendifferentexchangestoeffect
oneexchangeofallthegoods，thevalueofallthegoodsinthecountryisequaltotentimesthe
valueofallthemoney。
（3。vii。5）Ifthequantityofmoney，insteadofperformingtenexchangestoexchangeallthe
goods
once，weretentimesasgreat，andperformedonlyoneexchange，itisevidentthatwhatever
additionweremadetothewholequantity，wouldproduceaproportionaldiminutionofvalue，in
eachoftheminorquantitiestakenseparately。Asthequantityofgoods，againstwhichthemoney
isallexchangedatonce，issupposedtobethesame，thevalueofallthemoneyisnomore，after
thequantityisaugmented，thanbeforeitwasaugmented。Ifitissupposedtobeaugmented
one—tenth，thevalueofeverypart，thatofanounceforexample，mustbediminishedone—tenth。
Supposethewholequantity1，000，000ounces，andaugmentedbyone—tenth；thelossofvalueto
thewholemustbecommunicatedproportionallytoeverypart；butwhatone—tenthoramillionis
toamillion，one—tenthofanounceistoanounce。
（3。vii。6）Ifthewholeofthemoneyisonlyone—tenthoftheabovesupposedsum，and
performs
tenpurchasesit，exchangingallthegoodsonce，itofcourseexchangeseachtimeagainst
one—tenthofthegoods。Butifthetenthwhichexchangesagainstatenthisincreasedinany
proportion，itisthesamethingasifthewholewhichexchangesagainstthewholewere
increasedinthatproportion。Inwhateverdegree，therefore，thequantityofmoneyisincreasedor
diminished，otherthingsremainingthesame，inthatsameproportion，thevalueofthewhole，
andofeverypart，isreciprocallydiminishedorincreased。This，itisevident，isaproposition
universallytrue。Wheneverthevalueofmoneyhaseitherrisenorfallen，（thequantityofgoods，
againstwhichitisexchanged，andtherapidityofcirculation，remainingthesame，）thechange
mustbeowingtoacorrespondingdiminutionorincreaseofthequantity；andcanbeowingto
nothingelse。Ifthequantityofgoodsdiminish，whilethequantityofmoneyremainsunaltered，it
isthesamethingasifthequantityofmoneyhadbeenincreased；andifthequantityofgoodsbe
increased，whilethequantityofmoneyremainsunaltered，itisthesamethingasifthequantity
ofmoneyhadbeendiminished。
（3。vii。7）Similarchangesareproducedbyanyalterationintherapidityofcirculation。By
rapidity
ofcirculationismeant，ofcourse，thenumberoftimesthemoneymustchangehandstoeffect
onesaleofallthecommodities。
（3。vii。8）Thewholeofthegoods，whichfalltobeexchangedinthecourseoftheyear，isthe
amountcontemplatedintheabovepropositions。Ifthereisanyportionoftheannualproduce，
whichisnotexchangedatall，aswhatisconsumedbytheproducer；orwhichisnotexchanged
formoney；anysuchportionisnottakenintoaccount，becausewhatisnotexchangedformoney
isinthesamestate，withrespecttothemoney，asifitdidnotexist。Ifthereisanypartofwhat
fallstobeexchangedinthecourseoftheyear，whichisexchangedtwo，orthree，ormoretimes，
thatalsoisnottakenintoaccount，becausetheeffectisthesame，withrespecttothemoney，asif
thegoodshadbeenincreasedtotheamountofthesemultiplications，andexchangedonlyonce。
SectionVIII。WhatRegulatestheQuantityofMoney（3。viii。1）Whenwehaveascertained，thatquantitydeterminesthevalueofmoney，westill
have
toinquirewhatitisthatregulatesquantity。
（3。viii。2）Thequantityofmoneymayseem，atfirstsight，todependuponthewillofthe
governments，whichassumetothemselvestheprivilegeofmakingit，andmayfabricateany
quantitytheyplease。
（3。viii。3）Moneyismadeundertwosetsofcircumstances；eitherwhengovernmentleaves
the
increaseordiminutionofitfree；orwhenitendeavourstocontrolthequantity，makingitgreat
orsmallasitpleases。
（3。viii。4）Whentheincreaseordiminutionofmoneyisleftfree，governmentopensthemint
to
thepublicatlarge，makingbullionintocoinsforasmanyasrequireit。
（3。viii。5）Itisevidentthatindividuals，possessedofbullion，willdesiretoconvertitinto
coins，
onlywhenitistheirinteresttodoso；thatis，whentheirbullion，convertedintocoins，willbe
morevaluabletothemthanintheshapeofbullion。
（3。viii。6）Thiscanonlyhappenwhenthecoinsarepeculiarlyvaluable，andwhenthesame
quantityofmetal，inthestateofcoin，willexchangeformorethaninthestateofbullion。
（3。viii。7）Asthevalueofthecoinsdependsuponthequantityofthem，itisonlywhenthe
quantityistoacertaindegreelimited，thattheyhavethisvalue。Itistheinterestofindividuals，
whencoinsarethushighinvalue，tocarrybullion，tobecoined；butbyeveryadditiontothe
numberofthecoins，thevalueofthemisdiminished；andatlastthevalueofthemetalinthe
coins，abovethebullion，becomestoosmalltoaffordamotiveforcarryingbulliontobecoined。
Ifthequantityofmoney，therefore，shouldatanytimebesosmallastoincreaseitsvalueabove
thatofthemetalofwhichitismade，theinterestofindividualsoperatesimmediately，inastate
offreedom，toaugmentthequantity。
（3。viii。8）Itisalsopossibleforthequantityofmoneytobesolargeastoreducethevalueof
the
metalinthecoin，belowitsvalueinthestateofbullion；inthatcase，theinterestofindividuals
operatesimmediatelytoreducethequantity。Ifamanhaspossessedhimselfofaquantityofthe
coins，containing，weshallsay，anounceofthemetal，andifthesecoinsareoflessvaluethan
themetalinbullion，hehasdirectmotivetomeltthecoins，andconvertthemintobullion：and
thismotivecontinuestooperatetillbythereductionofthequantityofmoney，thevalueofthe
metalinthatstateissonearlythesamewithitsvalueinbullion，asnottoaffordamotivefor
melting。
（3。viii。9）Wheneverthecoiningofmoney，therefore，isfree，itsquantityisregulatedbythe
value
ofthemetal，itbeingtheinterestofindividualstoincreaseordiminishthequantity，in
proportionasthevalueofthemetalincoinsisgreaterorlessthanitsvalueinbullion。
（3。viii。10）Butifthequantityofmoneyisdeterminedbythevalueofthemetal，itisstill
necessarytoinquirewhatitiswhichdeterminesthevalueofthemetal。Thatisaquestion，
however，whichmaybeconsideredasalreadysolved。Goldandsilverareinrealitycommodities。
Theyarecommodities，fortheattainingofwhichlabourandcapitalmustbeemployed。Itiscost
ofproduction，therefore，whichdeterminesthevalueofthese，asofotherordinaryproductions。
（3。viii。11）Wehavenexttoexaminetheeffectswhichtakeplacebytheattemptsof
government
tocontroltheincreaseordiminutionofmoney，andtofixthequantityasitpleases。Whenit
endeavourstokeepthequantityofmoneylessthanitwouldbe，ifthingswereleftinfreedom，it
raisesthevalueofthemetalinthecoin，andrendersittheinterestofeverybody，whocan，to
converthisbullionintomoney。Bysupposition，thegovernmentwillnotsoconvertit。Hemust，
therefore，haverecoursetoprivatecoining。Thisthegovernmentmust，ifitperseveres，prevent
bypunishment。Ontheotherhand，wereittheobjectofgovernmenttokeepthequantityof
moneygreaterthanitwouldbe，ifleftinfreedom，itwouldreducethevalueofthemetalin
money，belowitsvalueinbullion，andmakeittheinterestofeverybodytomeltthecoins。This，
also，thegovernmentwouldhaveonlyoneexpedientforpreventing，namely，punishment。
（3。viii。12）Buttheprospectofpunishmentwillprevailovertheprospectofprofit，onlyifthe
profitissmall。Itiswellknown，that，wherethetemptationisconsiderable，privatecoinagegoes
on，inspiteoftheendeavoursofgovernment。Asmeltingisamoreeasyprocessthancoining，
andcanbeperformedmoresecretly，itwilltakeplacebyalesstemptationthancoinage。
（3。viii。13）Itthusappears，thatthequantityofmoneyisnaturallyregulated，ineverycountry，
by
thevalue，inotherwords，bytheproductivecost，inthatcountry，ofthemetalsofwhichitis
made；thatthegovernmentmay，byforciblemethods，reducetheactualquantityOfmoneytoa
certain，butaninconsiderableextent，belowthatnaturalquantity；thatitcanalso，buttoastill
lessextent，raiseitabovethatquantity。
（3。viii。14）Whenitdiminishesthequantitybelowwhatitwouldbeinastateoffreedom，in
other
words，raisesthevalueofthemetalinthecoins，aboveitsvalueinbullion，itinrealityimposesa
seignorage。Inpractice，aseignorageiscommonlyimposedbyissuingcoinswhichcontainrather
lessofthemetalthantheyprofesstocontain，orlessthanthatquantitytowhichtheyare
intendedtobeanequivalent。Bycoininguponthisprinciple，governmentmakesaprofitofthe
differencebetweenthevalueofthemetalinthecoins，andthatinbullion。Supposethe
differencetobefivepercent。，thegovernmentobtainsbullionatthemarketprice，andmakesit
intocoinswhichareworthfivepercent。morethanthebullion。Coins，however，willretainthis
value，only，if，aswehaveshownintheprecedingsection，theyarelimitedinamount。Tobeable
tolimittheminamount，itisnecessarythatseignorageshouldnotbesohighastocompensate
fortheriskofcounterfeiting；inshort，thatitshouldnotgreatlyexceedtheexpenseofcoining。
SectionIX。TheEffectofEmployingTwoMetalsbothas
StandardMoney，andofUsingSubsidiaryCoins，atlessthantheMetallicValue。
（3。ix。1）Somenationshavemadeuseoftwometals，goldandsilver，both，asstandard
money，or
legaltendertoanyamount。
（3。ix。2）Forthispurposeitwasnecessarytofixacertainrelativevaluebetweenthem。A
certain
weightoftheonewastakentobeequalinvaluetoacertainweightoftheother。
（3。ix。3）Iftheproportionthusfixedforthecoinswereaccuratelytheproportionwhich
obtained
inthemarket，andcontinuedsoinvariably，therewouldbenoinconvenienceinthetwo
standards。Thevalueofanysumwouldalwaysbethesameineithersetofcoins。
（3。ix。4）Therelativevalue，however，ofthetwometalsthemarketisfluctuating。
（3。ix。5）Supposethatthevaluefixedforthecoinsisthatof15to1；inotherwords，thatone
pieceofgoldisequalto15piecesofsilverofthesameweight。Achangetakesplaceinthe
market，andthisvaluebecomesas16to1。Whatfollows？
（3。ix。6）Amanwhohadadebttopay，equal，letussay，to100ofthegoldpieces，or1500of
the
silver，findsithisinteresttopayhisdebtnotwithgold。Withhis100piecesofgoldbecango
intothemarketandpurchaseasmuchsilverasmaybecoinedinto1600pieces，with1500of
whichhemaypayhisdebt，andretain100tohimself。Inthismannersilvercoinswouldbe
multiplied；andthequantityofthecurrencywouldbeincreased；itsvaluewould，therefore，be
diminished；thegoldincoinswouldthusbecomeoflessvaluethaninbullion；hencethegold
coinswouldbemeltedandwoulddisappear。
（3。ix。7）Afterafluctuationinonedirection，itmaytakeplaceinanother。Silvermayrise，
instead
offalling，ascomparedwithgold。Therelativevaluemaybecomeas14to1。Inthiscaseit
wouldbetheinterestofeverymantopayingold，ratherthansilver；andinthiscaseitwouldbe
thesilvercoinswhichwoulddisappear。
（3。ix。8）Twoinconveniencesarethereforeincurredbythedoublestandard。First，thevalueof
the
currency，insteadofbeingrenderedassteadyinvalueaspossible，issubjectedtoaparticular
causeofvariation。And，secondly，thecountryisputtotheexpenceofanewcoinage，asoftenas
achangetakesplaceintherelativevalueofthemetals。
（3。ix。9）Thecasewouldbeexactlythesame，ifaseignorageexisted。Supposethat10per
cent。
wereimposedasseignorage；itwouldbeequallytrue，thatthe100piecesofgold；werethe
proportionchanged，from15to1，to16to1；wouldpurchaseasmuchsilveraswouldbe
exchangedatthemintfor1600piecesofsilver。Whilethemarketvalueorthetwometalswas
thesameasthemintvalue，onepieceofgoldpurchasednotonlyasmuchsilveraswas
containedin15piecesorsilver，butone—tenthmore；afterthechangewhichwehavejust
supposed，itpurchasesintheproportionof16to15，thatis，asmuchaswiltbecontainedin16
pieces，andatenthmore。
（3。ix。10）Theuseofsilvercoins，forthepurposeofsmallpayments，orchange，asitiscalled，
of
themorevaluablecoins，iftheyarelegaltenderonlytoasmallamount，isnotliabletothe
objectionswhichapplytoadoublestandard。
（3。ix。11）Ithas，indeed，beenaffirmed，thatiftheyareissued，atahighervaluethanthatof
the
metalcontainedinthem，theywilloccasiontheexportationof’thegoldcoins。Butitiseasyto
seethatthisisamistake。
（3。ix。12）Supposethatoursilvercoinsinthiscountryare10percent。abovethevalueofthe
metal，butlegaltenderonlytotheextentof40shillings；everyman，itisaffirmed，hashencean
interestinsendinggoldtoParistobuysilver。
（3。ix。13）TherelativevalueofgoldtosilverinParisandEnglandisnaturallyprettynearly
the
same；letitssayas15to1。Anounceofgold，therefore，willinParispurchase15oz。ofsilver。
ButsoitwillinEngland。WherethenistheadvantageingoingtoFrancetopurchaseit？
（3。ix。14）Youproposetocoinitbecauseitis10percentmorevaluableascoin。
（3。ix。15）But10percent。ofitistakenfromyou，andhencetoyoutheadvantageofthehigh
valueislost。
（3。ix。16）Yoursilvercoinswith10percent。addedtothemwouldmakethecoinsoffull
weight。
（3。ix。17）Supposethepriceofsilvertohavesunkbelowthemintproportion，itwouldthen
be
yourinteresttopayinsilverifyoucould；butyoucanonlypaytotheextentof40shillings；itis
thereforeworthnobody’swhiletosurchargethemarket。
（3。ix。18）Besides，governmentreservestoitselftherightofrefusingtocoinsilver，whenit
pleases；itcanthereforeretainitofahighvalue。
（3。ix。19）Subsidiarycoinscannotsendthestandardcoinsoutofthecountry，unlessthe
increased
amountofthemsinkthevalueofthecurrency。Thestandardcoinswillnotgoinpreferenceto
bullion，unlesstheycanbepurchasedcheaperthanbullion。
SectionX。SubstitutesforMoney（3。x。1）Theonlysubstituteformoney，ofsufficientimportancetorequireexplanation，inthis
epitomeofthescience，isthatspeciesofwrittenobligationtopayasumofmoney，whichhas
obtainedtheappellationofpapermoney。
（3。x。2）Theuseofthisspeciesofobligation，asasubstituteformoney，seemstohave
originated
intheinventionofbillsofexchange，ascribedtotheJews，inthefeudalandbarbarousages。
（3。x。3）Whentwocountries，asEnglandandHolland，tradedwithoneanother；when
England，
forexample，importedDutchgoods，andHollandimportedEnglishgoods，thequestion
immediatelyarose，howpaymentwastobemadeforthem。IfEnglandwasunderthenecessityof
sendinggoldandsilverforthegoodswhichshehadbroughtfromHolland，theexpensewas
considerable。IfHollandwasunderthenecessityofsendinggoldandsilvertoEngland，the
expensewasalsoconsiderable。Itwasveryobvious，however，thatifthereweretwoindividuals，
oneofwhomowedtotheother100l。，andtheothertohim100l。，insteadofthefirstman’s
takingthetroubletocountdown100l。tothesecond，andthesecondman’stakingthesame
troubletocountdown100l。tothefirst，alltheyhadtodowastoexchangetheirmutual
obligations。ThecasewasthesamebetweenEnglandandHolland。IfEnglandhadtopaya
millionofmoneytoHolland，andhadanequalsumtoreceivefromHolland，insteadofsending
themoneyfromEnglandtoHolland，itwouldsaveexpenceandtroubletoconsigntoher
creditors，inHolland，themoneyduetoherinHolland；andthosemerchantsinHolland，who
owedmoneytoEngland，andmusthavebeenattheexpenseofsendingit，wouldbewellpleased
tobesavedfromthatexpense，byobeyinganordertopay，inHolland，whattheyowedtoa
merchantinEngland。Abillofexchangewas，literally，suchanorder。ThemerchantinEngland
wrotetothemerchantinHolland，whoowedhimasumofmoney，\"Paytosuchandsucha
person，suchandsuchasum；\"andthiswascalleddrawingabilluponthatperson。The
merchantsinHollandactedinthesamemanner，withrespecttothepersonsinEngland，from
whomtheyhadmoneytoreceive，andtowhomtheyhadmoneytopay。Whenitsohappened，
thatthemoney，whichthetwocountriesowedtooneanother，wasequal，thepaymentsbalanced
oneanother，andeachcountrypaidforthegoods，whichithadreceived，free，altogether，from
theexpenseoftransmittingmoney。Evenwhenithappenedthatoneofthetwoowedmorethan
ithadtoreceive，ithadonlythebalancetodischarge，andwasrelievedfromalltherestofthe
expense。
（3。x。4）Theadvantage，therefore，derivedfromtheinventionanduseofbillsofexchange，
was
veryconsiderable。Theuseofthemwasrecommendedbyastillstrongernecessity，attheperiod
oftheinvention，becausethecoarsepolicyofthosetimesprohibitedtheexportationofthe
preciousmetals，andpunishedwiththegreatestseverityanyinfringementofthatbarbarouslaw。
（3。x。5）Billsofexchangenotonlyservedthepurposeofdischargingdebtsbetweencountry
and
country，butveryoftenactedasasubstituteformoney，inthecountrytowhichtheyweresent。
Whenabillwasdrawn，payableafteracertaintime，themerchanttowhomitwassent，ifhebad
adebttopay，orpurchasetomake，withouthavingmoneyreadyforthepurpose，paidwiththe
bill，insteadofmoney。Oneofthesebillswouldoftenpassthroughseveralbands，andbethe
mediumofpaymentinanumberoftransactions，beforeitwasfinallydischargedbytheperson
onwhomitwasdrawn。Tothisextent，itperformedtheprecisefunctionsofpapermoney，and
ledthewaytothefurtheruseofthatimportantsubstitute。
（3。x。6）Assoonasitwasdiscovered，thattheobligationofamerchantofcredit，topayasum
of
money，was，fromtheassurancethatitwouldbepaidassoonasdemanded，consideredofequal
valuewiththemoneyitself，andwaswithoutdifficultyreceivedinexchanges，asthemoney
itselfwouldhavebeenreceived，therewasmotivesufficienttoextendtheuseofthesubstitute。
Thosepersonswhohadbeenaccustomedtoperformthefunctionsofbankersinkeepingthe
moneyofindividuals，andexchangingagainstoneanotherthecoinsofdifferentcountries，were
thefirstwhoissuedpromisestopaycertainsumsofmoney，intheexpectationthattheywould
operate，assubstitutesformoney，inthebusinessofpurchaseandsale。Assoonastheuseof
suchasubstituteformoneyhasbegun，nothingiswantingbutfreedom，andtheconfidenceof
thepublicinthewrittenpromises，toenablethepapertosupersedetheuseofthemetal，and
operate，almostexclusively，asthemediumofexchange。
（3。x。7）Itremainstoinquirewhataretheadvantagesderivedfromtheuseofthissubstitute；
andwhataretheinconveniencestowhichitisliable。
SectionXI。AdvantagesDerivedfromtheUseofPaper
Money（3。xi。1）Thepreciousmetals，whicharenecessarytoperformthefunctionsofamediumof
exchange，areboughtwiththecommoditiesofthecountry。Manufactures，andtheproduceofthe
land，areexportedandinsteadofothercommodities，tobeturnedtouse，goldandsilver，tobe
employedasthemediumofexchange，areimportedforthem。Thevalueofthegoldandsilver，
whentheyaloneperformthebusinessofexchange，alwaysbearsaconsiderableproportion，—in
countriesbutlittleadvancedintheartsofexchange，alargeproportion，tothewholeofthe
annualproduceofthecountry。Ifeachpieceperformsahundredpurchasesinonceexchanging
thegoodswhichfalltobeexchangedinayear，thevalueofthemoneyrequiredisequaltoa
hundredthpartofthewholeofsuchgoods，which，thoughnotexactlycorrespondingwiththe
annualproduce，correspondwithitsonearly，thatweneednotscrupletospeakofthemunder
thatname。Incountriesinwhichmoneydoesnotpassrapidlyfromhandtohand，itmaybeequal
toatenthofthewholeoftheannualproduce。
（3。xi。2）Itisevidentthatwhatsoeverpartofthenationalpropertygoestoprovidethe
mediumof
exchange，iswhollyinoperativewithregardtoproduction。Nothingproduces，buttheimmediate
instrumentsofproduction；thefoodofthelabourer，thetoolsormachinerywithwhichhe
labours，andtherawmaterial，whichhefabricates。Ifthewhole，therefore，ofthenational
property，whichgoesinthismannertoprovideamediumofexchange，equaltoone—tenth，or
one—hundredthpartoftheannualproduce，couldbetakenfromthatemployment，andconverted
intofood，tools，andthematerialsofproduction，theproductivepowersofthecountrywould
receiveacorrespondingincrease。
（3。xi。3）Ifitbeconsidered，thattheannualproduceisequal，notonlytothewholeofthenet
revenueofthecountry，but，alongwiththis，tothewholeofthecapital，exceptingthepartwhich
isfixedindurablemachinery，itmaybeeasilyunderstoodhowvastanaccessionismadetothe
meansofproduction，byprovidingasubstituteforthepreciousmetals，asamediumof
exchange。
（3。xi。4）Paperisalsofarmoreconvenient，asamediumofexchange。Alargesuminthe
shapeof
goldorsilverisacumbrouscommodity。Inperformingexchangesofconsiderablevalue，the
verycountingofgoldandsilverisatediousoperation。Bymeansofabanknote，thelargestsum
ispaidasquicklyasthesmallest。
SectionXII。InconveniencestowhichtheUseofPaperMoney
isLiable（3。xii。1）Theinconveniencestowhichpapermoneyisliable，seemalltobecomprehended
under
threeheads。
（3。xii。2）First，—Thefailureoftheparties，bywhomthenotesareissued，tofulfiltheir
engagements。
（3。xii。3）Secondly，—Forgery。
（3。xii。4）Thirdly，—Thealterationofthevalueofthecurrency。
（3。xii。5）1。Thefailureoftheparties，bywhomnotesareissued，isanevilagainstwhich，
under
goodinstitutions，themostpowerfulsecuritiesarespontaneouslyprovided。
（3。xii。6）Ifcompetitionwereallowedtooperatefreely，andifnorestrictionwereimposedon
the
numberofthepartners，whomightbeengagedinabank，thebusinessofbanking，andofissuing
notes，wouldnaturallyplaceitselfonafooting，whichwouldrenderpapercurrencyverysecure。
（3。xii。7）Thenumberofbankswouldofcoursebemultiplied；andnoonebankwouldbe
ableto
fillwithitscirculationmorethanacertaindistrict。
（3。xii。8）Aslittlerisk，wherethepartnerswerenumerous，wouldbeincurredbyeachof
them，as
theprofitswouldbeverysure，andtheimportanceofhavingagoodcurrencywouldbesensibly
felt；therewouldbemotivesufficient，toalltheprincipalnoblemenandgentlemenofthecounty，
orotherdistrict，toholdsharesinthelocalbank，andaddtothesecurityofthepublic。
（3。xii。9）Incompetitionwithsuchanestablishment，anybank，ofdoubtfulcredit，would
vainly
endeavourtointroduceitsnotesintocirculation。Thesenseofinterestkeepstheattention
sufficientlyawake，andwhereeducationandknowledgearetolerablyadvanced，andthepressis
free，intellectisnotwantingtoguidethemostignoranttotheproperconclusions。Thepeople
maybetrustedtorejectthenotesofasuspectedparty，whentheymayhavethoseofapartyin
whomtheyconfide。
（3。xii。10）Anothergreatadvantageisgained，bytheschemeofnumerousbanks，each
supplying，
underthesafeguardoffreedomandcompetition，alimiteddistrict；thatifoneofthemfails，the
evilislimited，andproducesinconveniencetobutasmallportionofthecommunity。
（3。xii。11）Theinterest，also，whichbanks，wherenumerous，haveinsupplantingoneanother，
placesthemonthewatchtodiscoveranysymptomofdeficiencyonthepartofarival；andeach
ofthem，knowingthatitisvigilantlywatched，iscarefultoavoidanyfault，whichcanleadtoa
diminutionofitscredit。
（3。xii。12）InScotland，wherebankingisnearlyplaceduponthisdesirablefooting，andwhere
papermoneyspontaneouslyfilledthechannelsofcirculation，longbeforethesuspensionofcash
paymentsattheBankofEngland，therehavebeenfewfailuresinthenumerousbankswhich
issuedpaper，notwithstandingallthefluctuationsinthevalueof’money，producedbythat
suspension，andalltheconvulsionsofcreditofwhichthosefluctuationswerethecause。
（3。xii。13）Sucharethesecuritieswhichtheinterestandintelligenceofthepartieswould
provide，
withouttheinterventionofthelegislature。Ofthesecuritieswhichmightbeprovidedbythe
legislature，thefollowingareamongthosewhichmostobviouslypresentthemselves。
（3。xii。14）Itmightberenderedimperativeuponeverybanktotransmittosomeorganof
governmenttwomonthlystatements，oneoftheamountofitsnotes，anotherofthesecurities
withwhichitwasprovidedtomeetthedemandstowhichitwasliable；whileappropriate
powersmightbegranted，fortakingthenecessarystepstoprotectthepublic，whereproper
securitiesmightappeartobewanting。
（3。xii。15）Asagreatprofitattendstheissuingofnotesinfavourablecircumstances，itis
desirablethatthebenefit，ifunattendedwithpreponderantevil，shouldaccruetothepublic。The
profit，itisobservable，arisingfromtheinterestuponthenotesastheyarelent，isaltogether
distinctfromtheotherbenefit，arisingfromtheconversionofacostlymediumofexchangeinto
instrumentsofproduction。
（3。xii。16）Theissuingofnotesisoneofthatsmallnumberofbusinesses，whichitsuitsa
governmenttoconductabusinesswhichmaybereducedtoastrictroutineandfallswithinthe
compassofasmallnumberofclearanddefiniterules。Ifthepublicwereitsownbanker，asit
couldnotfailinpaymentstoitself，theevils，liabletoarisefromthefailureofthepartieswho
issuenotestofulfiltheirengagements，couldnotpossiblyhaveplace。Thepeople，inthiscase，
wouldprovidethefundstofulfilltheengagements，andthepeoplewouldreceivethem。Political
Economydoesnotcontemplatethemisapplicationofthefundsprovidedbythepeople。The
casesofnationalbankruptcy，andofthenon—paymentofagovernmentpaper，bywhichthe
peopleofvariouscountrieshavesuffered，haveallbeencasesinwhichthemanyhavebeen
plunderedforthebenefitofthefew。Whenthepeople，asabody，aretoreceivethepayment，
whichthepeople，asabody，providethefundstomake，itwouldbeabsurdtospeakoftheirloss
byafailure。
（3。xii。17）Thechanceofevil，then，fromafailureindischargingtheobligationscontracted
by
theissueofpapermoney，iscapableofbeingsomuchreduced，astoconstitutenovalid
objectionagainstanexpedient，thebenefitsofwhicharegreatandindisputable。Thereare
persons，however，whosay，thatifthebenefitsderivedfrompapermoneydidsurpassthechance
ofevilinquietandorderlytimes，thecaseisverydifferentinthoseofcivilwarorforeign
invasion。
（3。xii。18）Civilwar，andforeigninvasion。arewordswhichraiseupvagueconceptionsof
danger；andvagueconceptionsofdangeraretooapttoexertundueinfluenceonthe
understanding。
（3。xii。19）Inthefirstplace，thereis，inthepresentstateorthecivilisedworld，solittle
chanceof
Civilwar，orforeigninvasion，inanycountryhavingagoodgovernmentandaconsiderable
populationthat，incontrivingthemeansofnationalfelicity，smallallowancecanberationally
requiredforit。Toadoptacourseofaction，disadvantageousatallbuttimesofcivilwarand
foreigninvasion，onlybecauseitweregoodonthoseoccasions，wouldbeasabsurd，asitwould
be，inmedicine，toconfineallmencontinuallytothatspeciesorregimenwhichsuitsaviolent
disease。Iftheadvantages，whicharisefromtheuseofpapermoney，areenjoyed，withoutany
considerableabatement，atalltimes，exceptingthoseofcivilwarandforeigninvasion，theutility
orpapermoneyissufficientlyprovcd。
（3。xii。20）Tosaveourselvesfromthedelusionwhichvagueconceptionsofdangerareaptto
create，itispropertoinquire，whatarethepreciseevilswhichmayarisefrompapermoney，
duringthoserareandextraordinarytimes。
（3。xii。21）Acivilwar，oraforeigninvasion，isattendedwithagreatderangementofthe
circulatingmedium，whenitiscomposedofgoldandsilver。Atsuchaperiodthereisageneral
dispositiontohoard：aconsiderableproportion，therefore，ofthemediumofexchangeis
withdrawnfromcirculation，andtheevilsofascarcityofmoneyareimmediatelyfelt；theprices
ofcommoditiesfall；thevalueofmoneyrises；thosewhohavegoodstosell，andthosewhohave
debtstopay，aresubjecttolosses；andcalamityiswidelydiffused。
（3。xii。22）Fromtheevilsofhoarding，thecommunitywouldbe，inagreatmeasure，secured，
by
theprevalenceofpapermoney。Andtherearemanyreasonswhichmaydrawustoconclude，that
thosearisingfrontthediminutionofcreditwouldbeverylittletobefeared。
（3。xii。23）Ifthepaperwereissuedbyagovernment，whichdeservedtheconfidenceofthe
people，aforeigninvasion，whichwouldconcentratetheaffectionsofthepeopletowardsthe
government，wouldnotdestroythecreditofitsnotes。
（3。xii。24）Itwouldnotbetheinterestoftheinvaderstodestroytheircredit，eveninthatpart
of
thecountry，ofwhichtheymightbeinpossession；becauseitwouldnotbetheirinterestto
impairitsproductivepowers。
（3。xii。25）Nobodywouldlose，ultimately；because，evenifthecirculationofthenoteswere
preventedinthedistrictspossessedbytheenemy，theywouldrecovertheirvaluethemomentthe
enemywereexpelled。
（3。xii。26）Theeffectswouldnotbeverydifferent，ifthecirculationwereprovidedbya
well—conductedsystemofprivatebanking。Itwouldbetheinterestofallpartiestopreservethe
circulatingmediumincredit。Itwouldbetheinterestoftheenemytopreserveitinthedistricts
whichhepossessed。Atmost，hecouldonlypreventthecirculationforatime；for，afterhis
expulsion，thenoteswouldberedeemed；eitherbytheresponsiblepartieswhohadissuedthem；
or，iftheybadlosttheirpropertythroughtheoperationsoftheenemy，outofthecompensation
moneywhichthegovernmentwouldallow。
（3。xii。27）Itisnotprobable，that，eveninacivilwar，anyconsiderablediscreditshouldattend
a
wellestablishedpapercurrency。Thecountryis，ofcourse，dividedbetweenthehostileparties，in
portionsmoreorlessnearlyequal。Itisevidentlynottheinterestofthegovernment，inthatpart
ofthecountrywhichitcommands，todiscreditthepapercurrency，whetherithadbeenissuedby
itself，orbyprivatebankers。Aslittleisittheinterestoftheoppositeparty，todoanythingwhich
shalldisordertheregularityoftransactions，inthatpartofthecountry，whereitgoverns，and
fromwhichallitsmeansofprevailingoveritsopponentsmustbedrawn。Ifthecirculating
mediumconsistsofthenotesofprivatebankers，situatedwithinthatpartofthecountry，itisthe
interest，onadoubleaccount，ofthepartytoprotectthem。Itisitsinteresttoprotectthem，even
iftheyarepaperofthegovernment。Forwhomwoulditinjure，astheholdersofthem，butits
ownpeople？Whosebusinesswoulditdisturbbythewantofacirculatingmedium，butthe
peopleuponwhosemeansandaffectionsitwhollydepends？Byprotectingthepaperofthe
government，itmakesit，inreality，itsown。
（3。xii。28）Experienceisinfavourofalltheseconclusions；sinceithasbeenrepeatedly
found，
thatthepresenceofhostilearmies，andeveninternalcommotions，haveoccasionedlittle
disturbancetoapapercurrency，thevalueofwhichwasbuttolerablysecured。
（3。xii。29）2。Forgery，towhichbanknotesareexposed，isanevilofthesamesortas
counterfeiting。This，thoughanevilofgreatmagnitude，undersoimperfectasystemofbanking
asthat，whichiscreatedbytheexistenceofagreatmonopolizingestablishment，liketheBankof
England，would，undersuchasystemofbanking，asthatwhichwehavebeenjustcontemplating，
beinconsiderable。Whereonegreatbanksuppliesthecirculationofagreatpartofthecountry，
thereisopportunityforthecirculationofagreatamountof’forgednotes，andmotivetoincur
bothagreatriskandagreatexpense。Butifeverybanksuppliedonlyasmalldistrict，asmall
amountoftheforgednotesof’suchabankcouldfindtheirwayintothecirculation。Banks，too，
whicharesubjecttotheusefulprincipleofcompetition，areafraidtodiscredittheirownnotes
andrenderthepeopleshyoftakingthem，byrefusingpaymentofsuchasareforged；theyrather
choosetopaytheminsilence，todetectaswellastheycantheauthorsoftheforgery，and
circumscribeitsamount。Inthismannerindividualsseverallyareexemptedfromloss；andifa
lossiswillinglysustainedbythebanks，itisonlybecausetheyfindcompensation。