The enquirer. [volume] (Richmond, Va.) 1804-1815, 1804-07-28

Or tae note OF another perion at the bank, and
OBTAINS III exchange one Of it's Own notes, coni-
monty caiisd tGrt note. This bank note will
cifSniatf with eale IRON, one poton 70 another,
wthou. count, becauie, BY pretending !, 10 ,he
oani, mOhey MAJ at am time BE obtained sorit.
In al uapsictio1s therefore, a bank note will an
twer ali the puipoies of ipscic. By this opera
non the bsnl, AID ire individual are each Of
them beneuttcd. The bank receives the II ~.
Oh the Individual with proper iectirities, and at
Snc separation OF the time when il becomes due
commonly 60 days, RECEIVERS in its own notes or
IN 'pecie, the actual fun lent, with the legal in
tefeit on IT for that period. The individual ON
the other hand, having depoited his own note
O. me note OF another perion IN the bank, is be-
hentteu ny receiving iii exchange one OF its
hotes' whole actual amount is not 10 great, fror,,
the reiervation OF the LEGAL ;atercn, which will
re due on it Cor that period. The hay,k scouir,s
all It's profits by the. accumulation of thief. ie-
gal interefts, and in what way il effects this OBJ
}ect, viii be hereafter explained. The ie4:vi-
aaa! not only enjoys the advantage of ready
cucount on bis own notes OF the notts of other
people, but .aves the difference between The e.
~tnn,y rate OF difcount which has been already
citimated AT ~ or so per cent year, and the
legal Fatc OF ntereif at per cent referred a. the
bank.
1t is hy al operation OF this kind, that tine
iiAnS principally cxtoucs the fubftan.a credit OF
individuals; that it enables them 10 make an i'm.
mediate ute ofany part OF their inactive CAPITAL
whether that capital confifts of real property OF
of the notes OF others due at fome future peri
Cd. 1t IS by an operation Of this kind, there
fore that enterpriiing individuals are enabled 10
ini!tipIy tlelr purc' a;cs to employ more pro-
ductiVe induitry anc to ;ncreaie the wealth of
nation.
have hitherto mentioned but two operations
by which the banks NAV frrve to convert toe
dead capital OF All individual into productive
kock, and by which it confequently iilues it's
own pronnliory notes. Theft two operations
are diicounting Bills of Exchange, and iifcoun.-
ing the notes ofindividua!s, who live in the fame
town where the bank is eitabliihcd. But there
is anothe- operation, by which according to A
dam Smith Tie banking companies OF Scotland
have principally contributed to promote the
commerce OF that country. This was by SO grant
Ing, what they called cath accounts that is, by
GIVING credt to The extent of certain fun 10 d.
ny Individual who could procure two perions cf
undouDted credit and good landed efate to be-
come turety for him, thai whatever money
ihonld DC advanced to him, within the fun for
winch the credit had been given ihould b. re-
PAID upon demand, together with the LEGAL in
teret. The eafy terms upon which the Scotch
peculiar to them" Whoever has credit
of this kind with one OF the companies, and
bonows thoufand pounds upon it for ex-
ample, may repay this fun piece-meal by
30 ana so pounds a time, the company d;i-
counting d preP0rt;2na6!e part ofthe nteref of
the great ium, from tie day on which each Of
thoie imall iilns is paid in, till the whole be in
this manner repaid" Mr.. Smith then attempts
to explain The advantageous effect of this opera
ton, which fayes the necefity of keeping
any part OF his capital unemployed and ina1!izc
III as Golfers, for antwering occafonal demands,
and thus enables him to employ ercapital
IN has builue- 9 " Thar nart of his capt., i;;.i,
dealer'' (or any Individually " Is obliged to keep
by him unemployed and in ready money, for
aniwering OccaiionaI demands, is 70 much dead
itocS, which 10 long it remains in this litus.-
on, produces nothing either to him or to his
country. The iudiciCus operations Of Banking
cnaoie hlua to convert this dead aock into ac
tive and productive flock into materials 70
Wort. upon, into tools to work with, and into
proviiions and fuhiiaence to work for: into
itock which produces fomething botn to himfclf
and 10 his country"
From thefc combinations, we may now co.,
lect general view OF Bank, and Of the princi-
pal ierVices which it renders to iu{;vilsazJ. Ii
appears to be an .nveititure OF actual funds,
on the faith Of which certain notes are flied.
A. fPecie or real property can at any tine be
obtained for thsie notes at the Bank, they have
nearly the fame Circulation as fpecic, and their
value Is generally az par. Theie notes are CHEF
ly liued IN difcounLing Bills OF Exchange or in
oiicounttng noies, on i'll advances upon cath ac-
counts. When the Banks ifue their notes in the
dIicounting Of Bills OF Exchange, they have the
Greet of extending the credit of the individual,
who accepts the Bill of Exchange, By adj
vancing 60 the holder, nearly equal amount
in their own notes, which being equivalent
to fpeCie may be confidered in the light of an
active capital. When the banks iIue their notes
IT diicounting bills drawn by individuals in the
town where they are eitlbliihed, they may alto
be coniidcred as extending the credit ofthe indi-
viduals, whether that credit be bottomed on ri,
Inactive fund Glready in THEN hands, or on fund
which will ioon come into their hands from the
repayment of the debts due to them. when the
Banks iliue their notes by advances on calh sc-
counts, they have the effect of enlarging the
quantity of aETiVe and productive rabifa! in the
employment Of the individual. TIE PRINCIPAL
iervlces, therefore, which bank feems to rem
der to inaiOidaais conGR in exTeritine their 6lb.
ftartial credit, and in augmenting their pfoIuca
tiyc czzt4;.:cA-
DR. JoHH BRocEENBRoUCH twas on WED.
heiday. appointed Cafhier of the Bank of Viz
gina, 10 votes ont o the twelve, whica .y.re
given, b@;ng in his favour.