f they had the means of paying
for it, in the same manner neither would there be any deficiency of
money to be lent, if the borrowers offered good security, and were
willing to pay the market rate of interest for it.

In another part of this work, I have endeavoured to shew, that the real
value of a commodity is regulated, not by the accidental advantages
which may be enjoyed by some of its producers, but by the real
difficulties encountered by that producer who is least favoured. It is
so with respect to the interest for money; it is not regulated by the
rate at which the Bank will lend, whether it be 5, 4, or 3 per cent.,
but by the rate of profits, which can be made by the employment of
capital, and which is totally independent of the quantity, or of the
value of money. Whether a bank lent one million, ten millions, or a
hundred millions, they would not permanently alter the market rate of
interest; they would alter only the value of the money which they thus
issued. In one case 10 or 20 times more money might be required to carry
on the same business, than what might be required in the other. The
applications to the Bank for money, then, depend on the comparison
between the rate of profits that may be made by the employment of it,
and the rate at which they are willing to lend it. If they charge less
than the market rate of interest, there is no amount of money which they
might not lend,--if they charge more than that rate, none but
spendthrifts and prodigals would be found to borrow of them. We
accordingly find, that when the market rate of interest exceeds the rate
of 5 per cent. at which the Bank uniformly lend, the discount office is
besieged with applicants for money; and, on the contrary, when the
market rate is even temporarily under 5 per cent. the clerks of that
office have no employment.

The reason then why for the last twenty years, the Bank is said to have
given so much aid to commerce, by assisting the merchants with money,
is, because they have, during that whole period, lent money below the
market rate of interest; below that rate at which the merchants could
have borrowed elsewhere; but I confess that to me this seems rather an
objection to their establishment, than an argument in favour of it.

What should we say of an establishment which should regularly supply
half the clothiers with their wool under the market price? Of what
benefit would it be to the community? It would not extend our trade,