father of spirits, he will be ready meekly to surrender his life unto him who gave it. Non jam se moríens difsolvi conqueratur, Sed magis ire foras, vestemque relinquere ut anguis End of the fragments of lord Bacon, on the art of life. AN INQUIRY INTO THE CAUSE OF THE PRESENT STAGNATION IN BUSINESS: but Ir is common enough for individuals to over-trade themselves: companies sometimes do the same ; for a nation to over-trade itself, has scarce been apprehended before; yet as the symptoms are precisely the same as in the case of an individual when overtrading himself, we need seek for no other cause for the present distress in the trading part of the nation; for the amazing extent to which trade was carried on by the British merchants, was a good deal of it upon ficticious stock, for such is paper currency when ever it is issued beyond what there is a real deposit of property for the value. The very form of the promissary notes in circulation proves this, for they are all for value received, which is supposed to be the deposit, to answer the credit of the notes. But where (in too many cases) was the deposit, when it came to be called for? This fhews the bad effects of an unlimited ifsuing of paper currency." * It may augment the imaginary stock of a nation, to any amount, while the real stock remains just the same, or is perhaps daily decreasing by a losing trade. As all over-trading has got the name of speculation; that is a person speculating upon an imaginary profit, that is to arise to him at some distant period, from the goods he is buying; and what has given so great encouragement to speculation is, the long credits given on goods bought up for the export trade, twelve months commonly. It is true if the merchant pays ready money, he gets a discount of 71⁄2 per cent. This is one way of raising the interest of money from 5 per cent. the legal, to 7 per cent. for so much every merchant pays who takes the credit. But how prejudical high interest is to the export trade of a country may be seen by the following example. Suppose an Englishman and a Dutchman, have each a 1000l. lying at interest in their respective countries; they meet and agree to employ this money in a joint venture, to a foreign market, and call in their money that they may buy to the best advantage. After eighteen months, they have their returns: the net proceeds amount to just 2150 1. The Dutchman finds *Does not the ingenious writer here use the phrase paper currency in too loose and indefinite a sense. The writer here seems to confound what is commonly called wind bills with real bills granted for goods received, in the usual course of business, which ought surely to be dis tinguished from this. It does not seem that any well founded censure can be applied to the discounting of real bills; and it was owing to the ⚫ want of this accommodation that the best manufacturers have suffered so severely. No good reason seems yet to be assigned, why the practice of discounting these bills fhould have met with obstruction. Edit: he has made 301. more than if he had suffered his money to continue at interest for the time; but the Englishman has not a penny more than just the interest of his money, so will probably return his money to interest again, while the Dutchman has encou ragement to continue the trade. But suppose another merchant buys at the same time, and takes the credit as he pays 7 per cent. more for his goods, though sold equally well with the others, his net proceeds do not exceed the original cost, and as his bills falls due, six months before he has his returns, he is obliged to put off the time, by the help of bills of accommodation, which cannot be supposed to stand him lefs than 3 per cent. as they would be to renew twice in the time; so that he loses just as much as the Dutchman gains, supposing all other circumstances equal. And so far the higher rate of interest and the long credit is against the export trade. To save this, so many merchants got into the trade of ifsuing pro mifsary notes, instead of cash, in their payments: and thus trading upon an imaginary stock, no wonder if they extended their business beyond all rule of prudence, and at the same time engrofsing all the trade to themselves, as they had such an advantage over the merchant who was trading on real stock, as the outlay of the money must be reckoned by him as an article in the cost of his goods, viz. the interest the money would have brought him in the time, if he had not employed it in trade'; whereas the others lay out no money, though they seem still to buy for ready money. The multiplicity of private banks, there Oct. 9. fore, has been the chief cause of the present distress on the trading part of the nation: their credit being by so many failures rendered doubtful, has withdrawn at once the imaginary stock furnished by them for the carrying on of trade. It is a difficult matter to restrain an improper use of credit without hurting credit itself, which is so necefsary for the carrying on of an extensive business; but perhaps the following proposals might restrain the private banking within proper bounds. Let there be a charter bank established in every considerable trading town in Britain, where a capital of 100,000 1. could be employed to advantage in the banking business, upon the following conditions. I. That before they issue any notes for circulation, they fhall lodge four fifths of the capital stock contained in their charter in government's hands, at 3 per cent. for the security of the holders of their notes, and at the same time this deposit be admitted as a compensation for the stamp tax; so that their notes or bills be free from that tax, in the same manner as the notes of the bank of England are: that the 4 per cents. fhall be taken at par for the whole or any part of the deposit money; for which reason each of these banks thall be allowed to take in of that stock to the amount of four fifths of their charter capital, either by pur chase at the market price, or by giving stock for them at such rates as they can agree with the stockholders. 2. That the remaining fifth to lie in the bank, bę employed in no other trade but the purchase of either þullion or bills of exchange. 3. That no single person or trading house fhall hold more than 5000 1. stock in any one of these banks (except the bank of England, who may hold a fourth of the capital stock in any of them, if they chuse.) This article may be understood chiefly for those that shall be erected south of the Tweed; for as the revenue in Scotland is mostly, if not all, collected to Edinburgh, to be transmitted from thence to the treasurey, if the three charter banks in Edinburgh could agree to unite into one, this united bank in Edinburgh might be allowed the same privilege to hold the fourth of the capital stock in all the charter banks erected in any place in Scotland. 4. That the first twelve persons who fhall subscribe for a thousand pounds or upwards, shall act as directors, till the capital stock is filled up, and for this purpose may apply for a charter, fix the amount of the capital, and as soon as they have obtained their charter, advertise on what terms they will give stock for the 4 per cents. But the subscription money to be lodged either in the bank of England, or bank of Scotland, and to be employed no otherwise but in buying up 4 per cents. till the whole capital contained in the charter be filled up. 5. To prevent the pernicious practice of stockjobbing, that no person subscribing to any of these banks, fhall be allowed either to sell or transfer any part of his stock in the bank, until twelve months after the date of the charter; and even after this, all sales of these bank's stock, fhall be by public sale, after |