Thepaperwhichwasissueduponthosecirculatingbillsofexchange，amounted，uponmanyoccasions，tothewholefunddestinedforcarryingonsomevastandextensiveprojectofagriculture，commerce，ormanufactures;andnotmerelytothatpartofitwhich，hadtherebeennopapermoney，theprojectorwouldhavebeenobligedtokeepbyhim，unemployedandinreadymoneyforansweringoccasionaldemands。Thegreaterpartofthispaperwas，consequently，overandabovethevalueofthegoldandsilverwhichwouldhavecirculatedinthecountry，hadtherebeennopapermoney。Itwasoverandabove，therefore，whatthecirculationofthecountrycouldeasilyabsorbandemploy，anduponthataccount，immediatelyreturneduponthebanksinordertobeexchangedforgoldandsilver，whichtheyweretofindastheycould。Itwasacapitalwhichthoseprojectorshadveryartfullycontrivedtodrawfromthosebanks，notonlywithouttheirknowledgeordeliberateconsent，butforsometime，perhaps，withouttheirhavingthemostdistantsuspicionthattheyhadreallyadvancedit。
Whentwopeople，whoarecontinuallydrawingandredrawingupononeanother，discounttheirbillsalwayswiththesamebanker，hemustimmediatelydiscoverwhattheyareabout，andseeclearlythattheyaretrading，notwithanycapitaloftheirown，butwiththecapitalwhichheadvancestothem。Butthisdiscoveryisnotaltogethersoeasywhentheydiscounttheirbillssometimeswithonebanker，andsometimeswithanother，andwhenthesametwopersonsdonotconstantlydrawandredrawupononeanother，butoccasionallyruntheroundofagreatcircleofprojectors，whofinditfortheirinteresttoassistoneanotherinthismethodofraisingmoney，andtorenderit，uponthataccount，asdifficultaspossibletodistinguishbetweenarealandfictitiousbillofexchange;betweenabilldrawnbyarealcreditoruponarealdebtor，andabillforwhichtherewasproperlynorealcreditorbutthebankwhichdiscountedit，noranyrealdebtorbuttheprojectorwhomadeuseofthemoney。Whenabankerhadevenmadethisdiscovery，hemightsometimesmakeittoolate，andmightfindthathehadalreadydiscountedthebillsofthoseprojectorstosogreatanextentthat，byrefusingtodiscountanymore，hewouldnecessarilymakethemallbankrupts，andthus，byruiningthem，mightperhapsruinhimself。Forhisowninterestandsafety，therefore，hemightfinditnecessary，inthisveryperiloussituation，togoonforsometime，endeavouring，however，towithdrawgradually，anduponthataccountmakingeverydaygreaterandgreaterdifficultiesaboutdiscounting，inordertoforcethoseprojectorsbydegreestohaverecourse，eithertootherbankers，ortoothermethodsofraisingmoney;sothathehimselfmight，assoonaspossible，getoutofthecircle。Thedifficulties，accordingly，whichtheBankofEngland，whichtheprincipalbankersinLondon，andwhicheventhemoreprudentScotchbanksbegan，afteracertaintime，andwhenallofthemhadalreadygonetoofar，tomakeaboutdiscounting，notonlyalarmed，butenragedinthehighestdegreethoseprojectors。Theirowndistress，ofwhichthisprudentandnecessaryreserveofthebankswas，nodoubt，theimmediateoccasion，theycalledthedistressofthecountry;andthisdistressofthecountry，theysaid，wasaltogetherowingtotheignorance，pusillanimity，andbadconductofthebanks，whichdidnotgiveasufficientlyliberalaidtothespiritedundertakingsofthosewhoexertedthemselvesinordertobeautify，improve，andenrichthecountry。Itwasthedutyofthebanks，theyseemedtothink，tolendforaslongatime，andtoasgreatanextentastheymightwishtoborrow。Thebanks，however，byrefusinginthismannertogivemorecredittothosetowhomtheyhadalreadygivenagreatdealtoomuch，tooktheonlymethodbywhichitwasnowpossibletosaveeithertheirowncreditorthepubliccreditofthecountry。
Inthemidstofthisclamouranddistress，anewbankwasestablishedinScotlandfortheexpresspurposeofrelievingthedistressofthecountry。Thedesignwasgenerous;buttheexecutionwasimprudent，andthenatureandcausesofthedistresswhichitmeanttorelievewerenot，perhaps，wellunderstood。Thisbankwasmoreliberalthananyotherhadeverbeen，bothingrantingcashaccounts，andindiscountingbillsofexchange。Withregardtothelatter，itseemstohavemadescarceanydistinctionbetweenrealandcirculatingbills，buttohavediscountedallequally。Itwastheavowedprincipleofthisbanktoadvance，uponanyreasonablesecurity，thewholecapitalwhichwastobeemployedinthoseimprovementsofwhichthereturnsarethemostslowanddistant，suchastheimprovementsofland。Topromotesuchimprovementswasevensaidtobethechiefofthepublic—spiritedpurposesforwhichitwasinstituted。Byitsliberalityingrantingcashaccounts，andindiscountingbillsofexchange，it，nodoubt，issuedgreatquantitiesofitsbanknotes。Butthosebanknotesbeing，thegreaterpartofthem，overandabovewhatthecirculationofthecountrycouldeasilyabsorbandemploy，returneduponit，inordertobeexchangedforgoldandsilverasfastastheywereissued。Itscofferswereneverwellfilled。Thecapitalwhichhadbeensubscribedtothisbankattwodifferentsubscriptions，amountedtoonehundredandsixtythousandpounds，ofwhicheightypercentonlywaspaidup。Thissumoughttohavebeenpaidinatseveraldifferentinstalments。
Agreatpartoftheproprietors，whentheypaidintheirfirstinstalment，openedacashaccountwiththebank;andthedirectors，thinkingthemselvesobligedtotreattheirownproprietorswiththesameliberalitywithwhichtheytreatedallothermen，allowedmanyofthemtoborrowuponthiscashaccountwhattheypaidinuponalltheirsubsequentinstalments。Suchpayments，therefore，onlyputintoonecofferwhathadthemomentbeforebeentakenoutofanother。Buthadthecoffersofthisbankbeenfilledeversowell，itsexcessivecirculationmusthaveemptiedthemfasterthantheycouldhavebeenreplenishedbyanyotherexpedientbuttheruinousoneofdrawinguponLondon，andwhenthebillbecamedue，payingit，togetherwithinterestandcommission，byanotherdraftuponthesameplace。Itscoffershavingbeenfilledsoveryill，itissaidtohavebeendriventothisresourcewithinaveryfewmonthsafteritbegantodobusiness。Theestatesoftheproprietorsofthisbankwereworthseveralmillions，andbytheirsubscriptiontotheoriginalbondorcontractofthebank，werereallypledgedforansweringallitsengagements。Bymeansofthegreatcreditwhichsogreatapledgenecessarilygaveit，itwas，notwithstandingitstooliberalconduct，enabledtocarryonbusinessformorethantwoyears。Whenitwasobligedtostop，ithadinthecirculationabouttwohundredthousandpoundsinbanknotes。Inordertosupportthecirculationofthosenoteswhichwerecontinuallyreturninguponitasfasttheywereissued，ithadbeenconstantlyinthepracticeofdrawingbillsofexchangeuponLondon，ofwhichthenumberandvaluewerecontinuallyincreasing，and，whenitstopped，amountedtoupwardsofsixhundredthousandpounds。Thisbank，therefore，had，inlittlemorethanthecourseoftwoyears，advancedtodifferentpeopleupwardsofeighthundredthousandpoundsatfivepercent。Uponthetwohundredthousandpoundswhichitcirculatedinbanknotes，thisfivepercentmight，perhaps，beconsideredascleargain，withoutanyotherdeductionbesidestheexpenseofmanagement。Butuponupwardsofsixhundredthousandpounds，forwhichitwascontinuallydrawingbillsofexchangeuponLondon，itwaspaying，inthewayofinterestandcommission，upwardsofeightpercent，andwasconsequentlylosingmorethanthreepercentuponmorethanthree—fourthsofallitsdealings。
Theoperationsofthisbankseemtohaveproducedeffectsquiteoppositetothosewhichwereintendedbytheparticularpersonswhoplannedanddirectedit。Theyseemtohaveintendedtosupportthespiritedundertakings，forassuchtheyconsideredthem，whichwereatthattimecarryingonindifferentpartsofthecountry;andatthesametime，bydrawingthewholebankingbusinesstothemselves，tosupplantalltheotherScotchbanks，particularlythoseestablishedinEdinburgh，whosebackwardnessindiscountingbillsofexchangehadgivensomeoffence。Thisbank，nodoubt，gavesometemporaryrelieftothoseprojectors，andenabledthemtocarryontheirprojectsforabouttwoyearslongerthantheycouldotherwisehavedone。Butittherebyonlyenabledthemtogetsomuchdeeperintodebt，sothat，whenruincame，itfellsomuchtheheavierbothuponthemandupontheircreditors。Theoperationsofthisbank，therefore，insteadofrelieving，inrealityaggravatedinthelong—runthedistresswhichthoseprojectorshadbroughtbothuponthemselvesandupontheircountry。Itwouldhavebeenmuchbetterforthemselves，theircreditors，andtheircountry，hadthegreaterpartofthembeenobligedtostoptwoyearssoonerthantheyactuallydid。Thetemporaryrelief，however，whichthisbankaffordedtothoseprojectors，provedarealandpermanentrelieftotheotherScotchbanks。Allthedealersincirculatingbillsofexchange，whichthoseotherbankshadbecomesobackwardindiscounting，hadrecoursetothisnewbank，wheretheywerereceivedwithopenarms。Thoseotherbanks，therefore，wereenabledtogetveryeasilyoutofthatfatalcircle，fromwhichtheycouldnototherwisehavedisengagedthemselveswithoutincurringaconsiderableloss，andperhapstooevensomedegreeofdiscredit。