OF THE BALANCE OF TRADE.

below its level but those institutions of banks, funds, and paper-credit which are so much practised in this kingdom. These render paper equivalent to money, circulate it through the whole state, make it supply the place of gold and silver, raise proportionally the price of labour and commodities, and by that means either banish a great part of those precious metals, or prevent their further increase. What can be more short-sighted than our reasonings on this head? We fancy, because an individual would be much richer were his stock of money doubled, that the same good effect would follow were the money of every one increased, not considering that this would raise as much the price of every commodity, and reduce every man in time to the same condition as before. It is only in our public negotiations and transactions with foreigners that a greater stock of money is advantageous; and as our paper is there absolutely insignificant, we feel, by its means, all the ill effects arising from a great abundance of money without reaping any of the advantages.​¹⁹