29G

THE NATURE AND CAUSES OF

must have emptied them faster than they could have been re-plenished by any other expedient but the ruinous one of draw-ing upon London , and when the bill became due, paying it,together with interest and commission, by another draughtupon the same place. Its coffers having been filled so veryill, it is said to have been driven to this resource within avery few months after it began to do business. The estatesof the proprietors of this bank were worth several millions,and by tlieir subscription to the original bond or contract ofthe bank, were really pledged for answering all its engage-ments. By means of the great credit which so great a pledgenecessarily gave it, it was, notwithstanding its too liberalconduct, enabled to carry on business for more than twoyears. When it was obliged to stop, it had in the circulationabout two hundred thousand pounds in bank notes. In orderto support the circulation of those notes, which were conti-nually returning upon it as fast as they were issued, it hadbeen constantly in the practice of drawing bills of exchangeupon London , of which the number and value were continuallyincreasing, and, when it stopt, amounted to upwards of sixhundred thousand pounds. This bank, therefore, had, inlittle more than the course of two years, advanced to differentpeople upwards of eight hundred thousand pounds at fiveper cent. Upon the two hundred thousand pounds whichit circulated in bank notes, this five per cent, might, perhaps,be considered as clear gain without any other deduction be-sides the expense of management. But upon upwards ofsix hundred thousand pounds, for which it was continuallydrawing bills of exchange upon London , it was paying, inthe way of interest and commission, upwards of eight percent, and was consequently losing more than three per cent,upon more than three-fourths of all its dealings.

The operations of this bank seem to have produced effectsquite opposite to those which were intended by the particularpersons who planned and directed it. They seem to have in-tended to support the spirited undertakings, for as such theyconsidered them, which were at that time carrying on in dif-ferent parts of the country; and at the same time, by drawingthe whole banking business to themselves, to supplant all theother Scotch banks; particularly those establishing at Edin-burgh , whose backwardness in discounting bills of exchangehad given some offence. This bank, no doubt, gave sometemporary relief to those projectors, and enabled them to carry