nt altogether
the expense of the Bank."

On the principle above stated, it appears to me most clear, that by not
re-issuing the paper thus brought in, the value of the whole currency,
of the degraded as well as the new gold coin, would have been raised;
when all demands on the Bank would have ceased.

Mr. Buchanan, however, is not of this opinion, for he says, "that the
great expense to which the Bank was at this time exposed, was
occasioned, not, as Dr. Smith seems to imagine, by any imprudent issue
of paper, but by the debased state of the currency, and the consequent
high price of bullion. The Bank, it will be observed, having no other
way of procuring[47] guineas but by sending bullion to the mint to be
coined, was always forced to issue new coined guineas, in exchange for
its returned notes; and when the currency was generally deficient in
weight, and the price of bullion high in proportion, it became
profitable to draw these heavy guineas from the Bank in exchange for its
paper; to convert them into bullion, and to sell them with a profit for
bank paper, to be again returned to the Bank for a new supply of
guineas, which were again melted and sold. To this drain of specie, the
Bank must always be exposed while the currency is deficient in weight,
as both an easy and a certain profit then arises from the constant
interchange of paper for specie. It may be remarked, however, that to
whatever inconvenience and expense the Bank was then exposed by the
drain of its specie, it never was imagined necessary to rescind the
obligation to pay money for its notes."

Mr. Buchanan evidently thinks that the whole currency must, necessarily,
be brought down to the level of the value of the debased pieces; but
surely by a diminution of the quantity of the currency, the whole that
remains can be elevated to the value of the best pieces.

Dr. Smith appears to have forgotten his own principle, in his argument
on colony currency. Instead of ascribing the depreciation of that paper
to its too great abundance, he asks whether, allowing the colony
security to be perfectly good, a hundred pounds, payable fifteen years
hence, would be equally valuable with a hundred pounds to be paid
immediately? I answer yes, if it be not too abundant.

Experience however shews, that neither a state nor a bank ever have had
the unrestricted power of issuing paper money, without abusing that
power: in all states, therefore, the issue of paper money ou