ght to be
under some check and control; and none seems so proper for that purpose,
as that of subjecting the issuers of paper money to the obligation of
paying their notes, either in gold coin or bullion.

A currency is in its most perfect state when it consists wholly of paper
money, but of paper money of an equal value with the gold which it
professes to represent. The use of paper instead of gold substitutes the
cheapest in place of the most expensive medium, and enables the country,
without loss to any individual, to exchange all the gold which it before
used for this purpose, for raw materials, utensils, and food, by the use
of which both its wealth and its enjoyments are increased.

In a national point of view it is of no importance whether the issuers
of this well regulated paper money, be the government or a bank, it will
on the whole be equally productive of riches, whether it be issued by
one or by the other; but it is not so with respect to the interest of
individuals. In a country where the market rate of interest is 7 per
cent., and where the state requires for a particular expense 70,000_l._
per annum, it is a question of importance to the individuals of that
country, whether they must be taxed to pay this 70,000_l._ per annum, or
whether they could raise it without taxes. Suppose that a million of
money should be required to fit out an expedition. If the state issued a
million of paper, and displaced a million of coin, the expedition would
be fitted out without any charge to the people; but if a bank issued a
million of paper, and lent it to Government at 7 per cent., thereby
displacing a million of coin, the country would be charged with a
continual tax of 70,000_l._ per annum: the people would pay the tax, the
bank would receive it, and the society would in either case be as
wealthy as before; the expedition would have been really fitted out by
the improvement of our system, by rendering capital, of the value of a
million, productive in the form of commodities, instead of letting it
remain unproductive in the form of coin; but the advantage would always
be in favour of the issuers of paper; and as the state represents the
people, the people would have saved the tax, if they, and not the bank,
had issued this million.

I have already observed, that if there were perfect security that the
power of issuing paper money would not be abused, it would be of no
importance with respect to the riches of the cou