ABSTRACT
The capital of the bank, that serves as the basis of its credit, is the cause thereof, and not the effect; it consists of a part of the wealth of the shareholders, and it ought not to be confused with the money that is on deposit with the bank, till such time as the holders of its notes demand it back. Speculation would yet be tantamount to the creation of new wealth if it were unconstrained, but it is on the contrary uniquely restricted to these idle sums in its vaults, otherwise always circulating in one lump. The use of paper instead of gold, substitutes the cheapest in place of the most expensive medium, and enables the country, without loss to any individual, to exchange all the gold which it before used for this purpose, for raw materials, utensils, and food; by the use of which, both its wealth and its enjoyments are increased”.
