TIIE WEALTH OK NATIONS.

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unci gradually replaces the sum borrowed with the money orpaper which comes in from the occasional sales of his goods.With the same stock, therefore, he can, without imprudence,have at all times in his warehouse a larger quantity of goodsthan the London merchant; and can thereby both make agreater profit himself, and give constant employment to agreater number of industrious people who prepare thosegoods for the market. Hence the great benefit which thecountry lias derived from this trade.

The facility of discounting bills of exchange, it may bethought, indeed, gives the English merchants a conveniencyequivalent to the cash accounts of the Scotch merchants.But the Scotch merchants, it must be remembered, can dis-count their bills of exchange as easily as the English mer-chants; and have, besides, the additional conveniency oftheir cash accounts.

The whole paper money of every kind which can easilycirculate in any country never can exceed the value of thegold and silver, of which it supplies the place, or which (thecommerce being supposed the same) would circulate there,if there was no paper money. If twenty shilling notes, forexample, are the lowest paper money current in Scotland ,the whole of that currency which can easily circulatethere cannot exceed the sum of gold and silver which wouldbe necessary for transacting the annual exchanges of twentyshillings value and upwards usually transacted within thatcountry. Should the circulating paper at any time exceedthat sum, as the excess could neither be sent abroad norbe employed in the circulation of the country, it must im-mediately return upon the banks to be exchanged for goldand silver. Many people would immediately perceive thatthey had more of this paper than was necessary for trans-acting their business at home, and as they could not send itabroad, they would immediately demand payment of it fromthe banks. When this superfluous paper was converted intogold and silver, they could easily find a use for it by sendingit abroad; but they could find none while it remained in theshape of paper. There would immediately, therefore, be a runupon the banks to the whole extent of this superfluous paper,and, if theyshewed any difficulty or backwardness in payment,to a much greater extent, the alarm, which this would occasion,necessarily increasing the run.

Over and above the expenses which are common to every

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