First. The great bulk of the stock of a bank will consist of the funds of men in
trade, among ourselves, and moneyed foreigners ; the farmer of whom could
not spare their capitals out of their reach , to be invested in loans for long
periods, on mortgages or personal secu rity ; and the laUer of whom would not
be willing to be subjected to the casualties , delays , and embarrassments of
such a disposition of their money in a distant country.
Second/y. There will always be a considerable propartion of those who are
properly the money-Ienders of a country, who , from that spirit of caution which
usually characterizes this description of men , will incline rather to invest their
funds in mortgages on real estate, than in the stock of a ban k, which they are
apt to consider as a more precarious security.
These considerations serve, in a material degree, to narrow the foundation of
the objection , as to the point of fact. But there is a more satisfactory answer to
it. The effect supposed , as far as it has existences, is temporary. The reverse
of it takes piace in the generai and permanent operation of the thing.
The capitai of every public bank will , of course, be restricted within a certain
defined limit. It is the province of legislative prudence so to adjust this limit,
that, while it will not be too contracted for the demand which the course of
business may create, and far the security which the public ought to have far
the solidity of the paper which may be issued by the bank, it will stili be within
the compass of the pecuniary resources of the community; so that there may
be an easy practicability of completing the subscriptions to it. When this is
once done, the supposed effect, of necessity, ceases. There is then no longer
room for the investment of any additional capitaI. Stock may, indeed , change
hands, by one person selling and another buying ; but the money which the
buyer takes out of the common mass to purchase the stock, the seller receives
and restares to it. Hence, the future surpluses which may accumulate must
take their natural course , and lending at interest must go on as if there were no
such institution.

It must, indeed, flow in a more copious stream. The bank furnishes an extraardinary supply for barrowers, within its immediate sphere. A larger supply
consequently remains far borrowers elsewhere. In proportion as the circulation of the bank is extended, there is an augmentation of the aggregate mass
of money for answering the aggregate mass of demand oHence greater facility
in obtaining it for every purpose.
It ought not to escape without a remark, that, as far as the citizens of other
countries become adventurers in the bank, there is a positive increase of the
gold and silver of the country. It is true, that, from this, a half yearly rent is
drawn back, accruing from the dividends upon the stock. But as this rent
arises from the employment of the capitai by our own citizens, it is probable
that it is more than replaced by the profits of that employment. It is also likely
that a part of it is, in the course of trade, converted into the products of our
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