The enquirer. [volume] (Richmond, Va.) 1804-1815, 1804-08-15

not money frequently lent 10 iuch men for long
Ier or ihorter periods And from the interett
winch they pay, does not the unproductive ca
Iptaliit frequently derive the means of ineiuly-
ing his luxurious diipoition: 1t would appear
therefore, that banks, although they tend in a
certain degree to increaie the luxury of their
lfockboLderJ, do not produce this effect in very
Iconiiderable degree.
Thoie who contend that Banks originally in
create the luxury of tbeje svbs deal zvitb them,
mutt difcover the fource of their expenditure Ell
Their in the capital which the dealers borrow
from the bank, or in the profit which they make
on that capital. They mutt in othcr words az
ieit, that the expences of theie individuals and
their propeniity to luxury are Imported either
by the Multiplication of the capital which they
borrow from the bank, or by the accumulation
oftheir profits byt that increafeof wealth, which
banks are admitted to produce. That they have
a tendency to produce each of thefe effects, in
certain degree, can fcarcely admit of a doubt
But that they produce them in very conlide-
| rlole degree, is by no means 10 evident a propo-
iition.-1'here can be little doubt that foine idle
and extiavagant individuals, who have no imrne-
| date power to indulge their luxurious dif-
potion, will fometiines obtain a credit at
the bank, and acquire new funds to diff
| iipate and to abufe. Yet it is not probable,
that thefe individuals will conifitute any conf.
derable part of thote who deal with the bank.
1t is not probable, whether we conider the max
inns which will regulate either their own tranfac-
tons, or the traniaetions of the bank. Mott
men are guided by prudence at leaft in pecunia-
ny concerns and though it may fometimes fail
! them III feleeting the proper means of acqui-
ring money, it generally regulates them in
the modes OF its expenditure. 1t is proba-
bic, therefore, that mott men who borrow
| money, are apt to employ it in fome way
which may bring them in profit and ena-
BILE them to repay the fun which they have
borrowed. BY converting it into flock defined
Tor their immediate confumption,by uiine it as a
revenue infteadof employing it as capital, they
| would not only lofe allthe profits which would
nave awaited productive nduftry, but they
would at the fame time be depriving themfelves
OF the means of repaying this money when it
ihould become due. If thefe considerations have
any effect in confronting the prodigality of indi-
vlduas, when they borrow money from private
perons, they mutt operate with peculiar force
when thefe individuals become the debtors of
| bank. If they diliipate this fund in an idle
and unproductive luxury, they will be unable to
take up their notes, when the DAYS of grace
come round. Their credit not only az the bank,
but alto among individuals, will be thereby ma
terially injured, and what is fometi1nes to them
more melancholy misfortune, the fummary
modes which banks are generally privileged to
purdue in the recovery of their debts, will COM
pei them to facrfce part of their property to
make an equitable reititution. Even if theie
considerations do not prevent them from bor-
rowing money OF the bank to flpport their ex-
travagance, the policy Gifts directors when once
it has been affixed by experience will ferve to
limit the reiources of their luxury. 1t will be
the ntereft of the directors, 80 tiilierftani not
only the extent of each mans property, but his
mercantile character to uedertand whether he
homer. ard al
iheie enquiries which are made into the ftuati-
on or every man who deals with them, will gene
rally terminate IN expohng the heedefs prodiga-
lily OF thoie cuftomers, who apply the money
which they borrowed from them not to extend
their active capital, but to crafty prodigal and
luxurious fpirit. Whether then we coniider the
intereft of thoie who deal with the bank, or the
intereit OF thoie who conduct ifs operations, we
cannot but fuppoie it highly probable that the
number of thoie men who employ the capital
which they borrow from the bank in augmenting
their expences will bear only Ea,aH Proportion
to the number of thofe, who employ it in fup-
porting productive induftry, in accommodating
profit, in extending their own wealth and the
wealth of the fociety.
Mott of the preceding obfervations will apply
to that part ofthe objection, which aiferts that
the lncreahng wealth ofthofe, who deal directly
with the bank, and indeed the increafng wealth
of the whole fociety, will be accompanied by a
corresponding increafe of expenfe and luxury.
AS thofe who borrow capital from the bank, |
will generally find it to be their intereR to
make apro6t from proper employment of it,
10 alto thofe who make profit by the proper
employment of it, will generally find it to be
their intereft to convert the greater part of this
profit into capital for the accumulation
OF greater profits. The increafe of national
wealth, therefore, will not always be accompa-
MED by an equal increafe of national expcnce &
luxury: particularly in this country, where the
extent of fruitful and uncultvated land, the
abundant materials for manufactures, and the
innumerable fources of internal and foreign COM
merce, 10 ftrongly invite the employment of pro-
ductive capital.
But even fit were true, that the ettablifhment
OF banks have tendency to increafe the uxu-
ny of the fociety, by increaing the wealth of
thoie upon whom i c;cTatso, car, this ie re-
garded as any thing ellie than an Indication of
what the greater part of Gconomifts are de-
lighted to obierve, the increafe of the wealth of
the focety! Is it wonderful that fome evils
fhould be attached to this great benefit and
that the fame cauie, which converts our forefs
into cultivated fields and gardens, which fpreads
population and plenty over the face of the coun-
try, and gives a new impulte to the arts and fci-
ences, ihould alto excite the artificial wants of
life, and encourage the fprit of pride, foppery
and oltentaton In fact where is the inftitu-
ic iufbp e., al =