From eight to thirty-five millions then being our proper circulation,
and two hundred millions the actual one, the memorial proposes to issue
ninety millions more, because, it says, a great scarcity of money is
proved by the numerous applications for banks; to wit, New York for
eighteen millions, Pennsylvania ten millions, &c. The answer to this
shall be quoted, from Adam Smith (B. 2, c. 2, page 462), where speaking
of the complaints of the traders against the Scotch bankers, who had
already gone too far in their issues of paper, he says, 'Those traders
and other undertakers having got so much assistance from banks, wished
to get still more. The banks, they seem to have thought, could extend
their credits to whatever sum might be wanted, without incurring any
other expense besides that of a few reams of paper. They complained
of the contracted views and dastardly spirit of the directors of those
banks, which did not, they said, extend their credits in proportion to
the extension of the trade of the country; meaning, no doubt, by the
extension of that trade, the extension of their own projects beyond what
they could carry on, either with their own capital, or with what they
had credit to borrow of private people in the usual way of bond or
mortgage. The banks, they seem to have thought, were in honor bound to
supply the deficiency, and to provide them with all the capital
which they wanted to trade with.
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