ry reserve of the banks was no doubt the immediate occasion, they
called the distress of the country; and this distress of the country,
they said, was altogether owing to the ignorance, pusillanimity, and bad
conduct of the banks, which did not give a sufficiently liberal aid to
the spirited undertakings of those who exerted themselves in order to
beautify, improve, and enrich the country. It was the duty of the banks,
they seemed to think, to lend for as long a time, and to as great an
extent, as they might wish to borrow.' It is, probably, the good paper
of these projectors, which, the memorial says, the banks being unable to
discount, goes into the hands of brokers, who (knowing the risk of this
good paper) discount it at a much higher rate than legal interest, to
the great distress of the enterprising adventurers, who had rather try
trade on borrowed capital, than go to the plough or other laborious
calling. Smith again says, (page 478,) 'That the industry of Scotland
languished for want of money to employ it, was the opinion of the famous
Mr. Law. By establishing a bank of a particular kind, which he seems to
have imagined might issue paper to the amount of the whole value of all
the lands in the country, he proposed to remedy this want of money. It
was afterwards adopted, with some variations, by the Duke of Orleans, at
that time Regent of France. The idea of the possibility of multiplying
paper to almost any extent, was the real foundation of what is called
the Mississippi scheme, the most extravagant project both of banking and
stockjobbing, that perhaps the world ever saw. The principles upon
which it was founded are explained by Mr. Law himself, in a discourse
concerning money and trade, which he published in Scotland when he first
proposed his project. The splendid but visionary ideas which are set
forth in that and some other works upon the same principles, still
continue to make an impression upon many people, and have perhaps,
in part, contributed to that excess of banking which has of late been
complained of both in Scotland and in other places.' The Mississippi
scheme, it is well known, ended in France in the bankruptcy of the
public treasury, the crush of thousands and thousands of private
fortunes, and scenes of desolation and distress equal to those of an
invading army, burning and laying waste all before it.

At the time we were funding our national debt, we heard much about 'a
public debt being a pub