ABSTRACT
The ruin of the two most famous deposit banks in Europe shows at what price, in modern times, that power of credit was bought to which peoples trust perhaps too much now, and how many pitfalls are connected even with its most moderate use. An invention which followed closely on the heels of deposit banks and banks of account, extended soon beyond all bounds both the use of credit and its dangers. The banks issued to the trade their notes as perfectly equal in value to specie, because in effect they could be converted to specie at the will of each depositor, and from one moment to another; as a result they demanded interest equal to specie, and received it without trouble. The description of the Lyon merchants’ clearing system was cited in the translator’s comments introducing the previous chapter as a possible inspiration for the discussion of the bill of exchange.
