a
creditor, and a real creditor, and the debt due to him is made payable
on demand. The debt therefore which the government owes to individuals
is composed of two parts; the one about four hundred millions bearing
interest, the other about sixty millions payable on demand. The one is
called the funded debt, the other is the debt due in bank notes.

The second debt (that contained in the bank notes) has, in a great
measure, been incurred to pay the interest of the first debt; so that in
fact little or no real interest has been paid by government. The whole
has been delusion and fraud. Government first contracted a debt, in the
form of loans, with one class of people, and then run clandestinely into
debt with another class, by means of bank notes, to pay the interest.
Government acted of itself in contracting the first debt, and made a
machine of the bank to contract the second. It is this second debt that
changes the seat of power and the order of things; for it puts it in
the power of even a small part of the holders of bank notes (had they no
other motives than disgust at Pitt and Grenville's sedition bills,) to
control any measure of government they found to be injurious to their
interest; and that not by popular meetings, or popular societies, but
by the simple and easy opera-tion of withholding their credit from that
government; that is, by individually demanding payment at the bank
for every bank note that comes into their hands. Why should Pitt and
Grenville expect that the very men whom they insult and injure,
should, at the same time, continue to support the measures of Pitt and
Grenville, by giving credit to their promissory notes of payment? No new
emissions of bank notes could go on while payment was demanding on the
old, and the cash in the bank wasting daily away; nor any new advances
be made to government, or to the emperor, to carry on the war; nor any
new emission be made on exchequer bills.

"_The bank_" says Smith, (book ii. chap. 2) "_is a great engine of
state_." And in the same paragraph he says, "_The stability of the bank
is equal to that of the British government_;" which is the same as to
say that the stability of the government is equal to that of the bank,
and no more. If then the bank cannot pay, the _arch-treasurer_ of the
holy Roman empire (S. R. I. A.*) is a bankrupt. When Folly invented
titles, she did not attend to their application; forever since the
government of England has been in t