The enquirer. [volume] (Richmond, Va.) 1804-1815, 1804-08-15
ENQUIRE Err.
RICHMOND
WEDNESDAY, AUGUST Is, 1904.
o " B II ~ K S.
NO. Nv.

ed. We have attempted TO prove that they do
moi incrcaie the relative price of commodi-
ties IN the countries where they are eitabliiheti
III any eo1E.Ierabls degree and that they do
not neceharily communicate tbaf great degree
OF beneht to one part of a country, or to its own
stockholders, which foine political economics
nave attempted to demonltratc. Two other
objections fill remain, which are worthy of ex-
animation. It. That banks, however they
may mcreate the wealth OF a nation, contribute
wieh equal certainty to increafe its luxury. Cd.
mat banks under every pofIible modification
VIII become the mott convenient and certain
inftruments in the hands of the government for
lncreahng its prodigality or its rover. We
hall dIfmiis each of thofe objections with very
few obfervations.
Sd. Ihoie who contend that banks increaf.
the luxury of nation, mutt either contend
that 1t increaies the luxury of its ihareholders,
or of thofe individuals, who deal with them.
The individuals who originally fubfcribe for
the mares ofthe bank, may be divided into two
cIaites (; thoie who convert them into the mere
lnitrunlent ofa mercantile Ejaculation, and fub-
icribe for Its fhares, for no other purpoie than
TO make aproft on them, by telling them to
others ; and thofe who not whiting to carry on
any bulinefs at all, or having more capital than
Is iufhclent to carry on their cuftomary bufinefs,
are anxious to vett their money in fome per1na-
nent and productive fund, and enjoy the intereft
on it which this inveftiture will create. The ex-
pences OF the hrft clafs, and the flock defined
for their immediate confumption, are not gene
rally increafed in any comfortable degree bythis
mercantile traDiaetion. 1t certainly enables
item to accumulate new wealth. The fluStu-
atoms of the market by rafting the value of the
itock above par, will frequently enable them to
make pretty comfortable profit upon their O.
r1ginal capital. But this increaGng profit is ge-
nerally made, not TO increafe the flock referved
tor thelrimmediate couiiImption, not to increafe
their expenfes, but to increafe their productive
capital, or that capital, which carrie. on their
buhnets. A merchant, for inttance, who buys
tock to-day at par, and fells it tomorrow at an
advance of 10 or 20 per cent, will not think of
dlihpating the whole amount of his gains, in
employing greater number of idle ftrvants, Or
MEETING up fpiendid equipage: he will proba-
oly be more anxious to convert this new profit
INTO an additional capital, and to increaie his
gains by purchaling corn or fome other commo-
dty, for which there may be greater demand
in Tome other market. This ftock-iobbing ope-
ration therefore, however it may increafe the
wealth of this clafs of ftockholders does not ap-
pear TO increafe in nearly the fame proportion
their confumable flock, the circle of their e5-
pences and their propenGty for luxury.-If the
lIEeititure of money in bank flock can ever pro-
duce this effect in any comfortable degree it can
only he realized IN the iiifory OF the other clafs
OF stockholders, who having more capital al
ready, than is fuffcent to carry on their buiinefs
or willing to relinquilh bufnefs altogether, are
anxsous to employ a part or the whole of their
money, not torthe purpofes of making a profit
and increaflng their capital, but for the purpofe
OF acquiring revenue and supporting their ex-
pehces. Thefe men look around them for fome
permanent fund, in which they may veft their
treafure and from which they may expect to
derive great profits, with little trouble and at
hight rIfk. Thefe advantages they will readily
dlicoyer IN bank, which allowing them divii-
dend OF 10 or ! 2 per cent, enables them to in
create their revenue, to fuppiy their expences,
and TO crafty their iuxuriousdifp Banks,
1t may be therefore contended, contribute to in
create the luxury ofa nation, by increafing the
number, the revenue, and the expence of thefe
idle capitalists. Several considerations however
occur to invadate the force of this objection,
by limiting the extent of its application.
lit. The whole flock of the bank doesnot BELONG
to thofe unprodu6tive capitalifts.-The ratio
between that part oft which belongs TO them,
and that part which belongs to fpeculators,
1t is certainly very difficult to afcertain, becaufe
IT huctuates with 70 many different crcumftan-
ces. Experience however proves, that a great deal
OF this flock is generally offered for fae in the
market; and hence it is probable that not even
the greater part of the capital of bank belongs
TO theie idle capitalists. The expence there
tore, which the bank encourages in this clafs of
tockholders, is not equivalent TO the ufual diyi-
dend on the whole of its capital and perhaps
not even to the greater part of it. 9dy. The
whole even of that part which belongs to the
Idle capitalists, does not certainly belong to fuch
as can afford to purchafc the Injuries of life. A
certain fraction even of that part is distributed
in mall portions among great number of flock
holders. The proceeds of fmal as well as of
large mafles property will be vefted in bank
ihares. A man of moderate fortune will fome-
times with; as vel! as man vf large fortune, TO
dhpoie OF his land or his goods, and convert
them into bank flock, for the ufe of his old age
or tor the uie of his heirs. Thefe ftockholders
VIII Certainly draw a revenue from the bank
without the immediate employment of any per-
ional labour, and this revenue they will certain
~ devote to the payment of their expences.
--but theie expences do not deferve the name
OF Injuries. The dividend which thefe humble
capitalists derive from the bank, will moh com
mohly be appropriated TO the purchafe of the
mere mechanics and conveniences of life. They
leave all the more expenfive qualifications to the
tafte otthoie other stockholders whole capital in
the bank is iuiIcient to fupply dividend COM
metdurate to their enlarged delires. 1t is nei-
thef true, then, that the dividend on the whole
capital the bank will go to dcfray the expen-
ces idle and unproductiyc ftockholders nor
IS II true that the whole even, Of THAT part which
belongs 10 the idle fOckhOI5pra tt;U ,o 20 e..