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TUB NATURE AND CAUSES OB'

branch of trade; such as the expense of house-rent, the wagesof servants, clerks, accountants, &c.; the expenses peculiarto a bank consist chiefly in two articles : first, in the expenseof keeping at all times in its coffers, for answering the occa-sional demands of the holders of its notes, a large sum ofmoney, of which it loses the interest; and, secondly, in theexpense of replenishing those coffers as fast as they are emp-tied by answering such occasional demands.

A banking company, which issues more paper than can beemployed in the circulation of the country, and of which theexcess is continually returning upon them for payment, oughtto increase the quantity of gold and silver, which they keepat. all times in their coffers, not only in proportion to this ex-cessive increase of their circulation, but in a much greaterproportion; their notes returning upon them much faster thanin proportion to the excess of their quantity. Such a com-pany, therefore, ought to increase the first article of their ex-pense, not only in proportion to this forced increase of theirbusiness, but in a much greater proportion.

The coffers of such a company too, though they ought tobe filled much fuller, yet must empty themselves much fasterthan if their business was confined within more reasonablebounds, and must require, not only a more violent, but a moreconstant and uninterrupted exertion of expense in order to re-plenish them. The coin.too, which is thus continually drawnin such large quantities from their coffers, cannot be employedin the circulation of the country. It comes in place of apaper which is over and above what can be employed in thatcirculation, and is, therefore, over and above what can beemployed in it too. But as that coin will not be allowed tolie idle, it must, in one shape or another, be sent abroad, inorder to find that profitable employment which it cannot findat home; and this continual exportation of gold and silver,by enhancing the difficulty, must necessarily enhance stillfurther the expense of the bank, in finding new gold andsilver in order to replenish those coffers, which empty them-selves so very rapidly. Such a company, therefore, must,in proportion to this forced increase of their business, in-crease the second article of their expense still more than thefirst.

Bet us suppose that all the paper of a particular bank,which the circulation of the country can easily absorb andemploy) amounts exactly to forty thousand pounds; and that