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    Of the Multiplicity of Banks

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    What is touched at in the foregoing part of this chapter refers to one bank royal to preside, as it were, over the whole cash of the kingdom: but because some people do suppose this work fitter for many banks than for one, I must a little consider that head. And first, allowing those many banks could, without clashing, maintain a constant correspondence with one another, in passing each other's bills as current from one to another, I know not but it might be better performed by many than by one; for as harmony makes music in sound, so it produces success in business.

    A civil war among merchants is always the rain of trade: I cannot think a multitude of banks could so consist with one another in England as to join interests and uphold one another's credit, without joining stocks too; I confess, if it could be done, the convenience to trade would be visible.

    If I were to propose which way these banks should be established, I answer, allowing a due regard to some gentlemen who have had thoughts of the same (whose methods I shall not so much as touch upon, much less discover; my thoughts run upon quite different methods, both for the fund and the establishment).

    Every principal town in England is a corporation, upon which the fund may be settled, which will sufficiently answer the difficult and chargeable work of suing for a corporation by patent or Act of Parliament.

    A general subscription of stock being made, and by deeds of settlement placed in the mayor and aldermen of the city or corporation for the time being, in trust, to be declared by deeds of uses, some of the directors being always made members of the said corporation, and joined in the trust; the bank hereby becomes the public stock of the town (something like what they call the rentes of the town-house in France), and is managed in the name of the said corporation, to whom the directors are accountable, and they back again to the general court.

    For example: suppose the gentlemen or tradesmen of the county of Norfolk, by a subscription of cash, design to establish a bank. The subscriptions being made, the stock is paid into the chamber of the city of Norwich, and managed by a court of directors, as all banks are, and chosen out of the subscribers, the mayor only of the city to be always one; to be managed in the name of the corporation of the city of Norwich, but for the uses in a deed of trust to be made by the subscribers, and mayor and aldermen, at large mentioned. I make no question but a bank thus settled would have as firm a foundation as any bank need to have, and every way answer the ends of a corporation.

    Of these sorts of banks England might very well establish fifteen, at the several towns hereafter mentioned. Some of which, though they are not the capital towns of the counties, yet are more the centre of trade, which in England runs in veins, like mines of metal in the earth:

    Canterbury. Salisbury. Exeter. Bristol. Worcester. Shrewsbury. Manchester. Newcastle-upon-Tyne. Leeds, or Halifax, or York. Warwick or Birmingham. Oxford or Reading. Bedford. Norwich. Colchester.

    Every one of these banks to have a cashier in London, unless they could all have a general correspondence and credit with the bank royal.

    These banks in their respective counties should be a general staple and factory for the manufactures of the said county, where every man that had goods made, might have money at a small interest for advance, the goods in the meantime being sent forward to market, to a warehouse for that purpose erected in London, where they should be disposed of to all the advantages the owner could expect, paying only 1 per cent. commission. Or if the maker wanted credit in London either for Spanish wool, cotton, oil, or any goods, while his goods were in the warehouse of the said bank, his bill should be paid by the bank to the full value of his goods, or at least within a small matter. These banks, either by correspondence with each other, or an order to their cashier in London, might with ease so pass each other's bills that a man who has cash at Plymouth, and wants money at Berwick, may transfer his cash at Plymouth to Newcastle in half-an-hour's time, without either hazard, or charge, or time, allowing only 0.5 per cent. exchange; and so of all the most distant parts of the kingdom. Or if he wants money at Newcastle, and has goods at Worcester or at any other clothing town, sending his goods to be sold by the factory of the bank of Worcester, he may remit by the bank to Newcastle, or anywhere else, as readily as if his goods were sold and paid for and no exactions made upon him for the convenience he enjoys.

    This discourse of banks, the reader is to understand, to have no relation to the present posture of affairs, with respect to the scarcity of current money, which seems to have put a stop to that part of a stock we call credit, which always is, and indeed must be, the most essential part of a bank, and without which no bank can pretend to subsist--at least, to advantage.

    A bank is only a great stock of money put together, to be employed by some of the subscribers, in the name of the rest, for the benefit of the whole. This stock of money subsists not barely on the profits of its own stock (for that would be inconsiderable), but upon the contingencies and accidents which multiplicity of business occasions. As, for instance, a man that comes for money, and knows he may have it to-morrow; perhaps he is in haste, and won't take it to-day: only, that he may be sure of it to-morrow, he takes a memorandum under the hand of the officer, that he shall have it whenever he calls for it, and this memorandum we call a bill. To- morrow, when he intended to fetch his money, comes a man to him for money, and, to save himself the labour of telling, he gives him the memorandum or bill aforesaid for his money; this second man does as the first, and a third does as he did, and so the bill runs about a mouth, two or three. And this is that we call credit, for by the circulation of a quantity of these bills, the bank enjoys the full benefit of as much stock in real value as the suppositious value of the bills amounts to; and wherever this credit fails, this advantage fails; for immediately all men come for their money, and the bank must die of itself: for I am sure no bank, by the simple improvement of their single stock, can ever make any considerable advantage.

    I confess, a bank who can lay a fund for the security of their bills, which shall produce first an annual profit to the owner, and yet make good the passant bill, may stand, and be advantageous, too, because there is a real and a suppositious value both, and the real always ready to make good the suppositious: and this I know no way to bring to pass but by land, which, at the same time that it lies transferred to secure the value of every bill given out, brings in a separate profit to the owner; and this way no question but the whole kingdom might be a bank to itself, though no ready money were to be found in it.

    I had gone on in some sheets with my notion of land being the best bottom for public banks, and the easiness of bringing it to answer all the ends of money deposited with double advantage, but I find myself happily prevented by a gentleman who has published the very same, though since this was wrote; and I was always master of so much wit as to hold my tongue while they spoke who understood the thing better than myself.

    Mr. John Asgill, of Lincoln's Inn, in a small tract entitled, "Several Assertions proved, in order to create another Species of Money than Gold and Silver," has so distinctly handled this very case, with such strength of argument, such clearness of reason, such a judgment, and such a style, as all the ingenious part of the world must acknowledge themselves extremely obliged to him for that piece.

    At the sight of which book I laid by all that had been written by me on that subject, for I had much rather confess myself incapable of handling that point like him, than have convinced the world of it by my impertinence.
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