Intheinfancyofbanking，andincountrieswherethetrueprinciplesofthetradearenotwellunderstood，wefindbankstakingageneralalarm，wheneverawrongbalanceoftradeoccasionsarunuponthem。Thisterrordrivesthemtoexpedientsforsupportingtheircredit，whichwearenowtoexamine，andwhichweshallfindtohaveaquitecontrarytendency。
Thebettertoexplainthiscombination，wemustrecalltomind，thatthepaymentofthegrandbalanceincoinorbillsisunavoidabletobanks。Wehavesaidthatthisbalanceiscommonlypaidbyexchangers，whopickupthecoinincirculation；athingthebankcannotprevent。ThiswehavecalledexhaustingapartofB。theconsequenceofthisis，tomaketheproprietorsofC
comeuponthebank，anddemandcoinforfillingupB:tothisthebankmustalsoagree。ButbytheseoperationsCcomestobediminished，belowthelevelnecessaryforcarryingontrade，industry，andalienation:uponwhichIhavesaidtherecommonlycomesanapplicationtothebanktogivemorecredit，inordertosupportdomesticcirculation，whichifcompliedwith，moresolidpropertyisconsequentlymelteddown。
Thisswellsthemassofsecurities，andraisesAtoitsformerlevel。Butherethebankhasachoice，andmayrefusetograntmorecredit:intheformeroperationsithadnone。Nowifthebank，fromaterrorofbeingdrainedofcoin，shouldrefusetoissuenotesuponnewcredits，forthedemandsofdomesticcirculation；inthiscase，Isay，theyfailintheirdutytothenation，asbanks，andhurttheirowninterest。Astotheirdutytothenation，Ishallnotinsistuponit；butIthinkIcandemonstratethattheyfailintheirmannerofreasoning，withrespecttotheirowninterest，andthatisenough。
Isay，then，thataslongasthereisonesinglenoteincirculation，andanypartofagrandbalanceowing，thisnotewillcomeuponthebankforpayment，withoutapossibilityofitsavoidingthedemand。Refusingthereforecredit，whileanynotesremaininthehandsofthepublic，isrefusinganinterestwhichmayhelptomakeupthepastlosses:butofthismorehereafter。