Upon the whole, it is an unspeakable advantage to a nation to have her foreign debts paid by her bank, rather than to remain exposed to the demands of private foreign creditors; because, when a bank pays them, I suppose her to do it upon a loan in the funding way, where the capital is not demandable by the creditor; whereas when private citizens are debtors to strangers, the capitals are always demandable; and when a call comes suddenly and unexpectedly, the country is distressed. What would become of Great Britain, if all her debts to strangers were demandable at any time? It is the individuals who owe, in effect, all that is due to foreigners; because they pay the interest: but they pay this interest to the public; and the public appears as the debtor to all strangers, who have no right to exact the capital, although the state may set itself free whenever it is convenient. I have said above, that after all the combinations I had been able to form, I could discover but one motive to induce a bank to withhold credit at a time when it was demanded for the use of domestic circulation, viz. jealousy of other banks. What my combinations could not then discover, my inquiries have since unfolded. It is said, that the banks finding so great a propensity in the inhabitants of Scotland to consume foreign manufactures and produce, fell upon this expediency of calling in the old, and of refusing new credits, in order to cut off such branches of hurtful luxury and expence. Could the execution of such a plan prove a remedy against the vice complained of, this circumstance alone would more clearly demonstrate the utility of banks upon mortgage, than all I have been able to say in favour of that establishment. Let us therefore have recourse to our principles, in order to discover what influence a bank can have in this particular. We have distinguished between _necessary_ and _voluntary_ circulation: the _necessary_ has the _payment of debts_; the _voluntary_ has buying for its object. We have said that he who owes is either a bankrupt, or _must pay_, as long as there is a shilling in the country. But he who buys, or inclines to buy, _must have money_, or he can buy nothing; for if he buys on credit, he then falls immediately into the former category, and _must pay_. By withholding money for the uses of circulation, which banks may do for some time, buying _may_ be stopped; paying _never can_.