But such has been the operation of this complicated machine, the funding system, that it has produced, unperceived, a second generation of creditors, more numerous and far more formidable and withal more real than the first generation; for every holder of a bank note is a creditor, and a real creditor, and the debt due to him is made payable on demand. The debt therefore which the government owes to individuals is composed of two parts; the one about four hundred millions bearing interest, the other about sixty millions payable on demand. The one is called the funded debt, the other is the debt due in bank notes. The second debt (that contained in the bank notes) has, in a great measure, been incurred to pay the interest of the first debt; so that in fact little or no real interest has been paid by government. The whole has been delusion and fraud. Government first contracted a debt, in the form of loans, with one class of people, and then run clandestinely into debt with another class, by means of bank notes, to pay the interest. Government acted of itself in contracting the first debt, and made a machine of the bank to contract the second. It is this second debt that changes the seat of power and the order of things; for it puts it in the power of even a small part of the holders of bank notes (had they no other motives than disgust at Pitt and Grenville's sedition bills,) to control any measure of government they found to be injurious to their interest; and that not by popular meetings, or popular societies, but by the simple and easy opera-tion of withholding their credit from that government; that is, by individually demanding payment at the bank for every bank note that comes into their hands. Why should Pitt and Grenville expect that the very men whom they insult and injure, should, at the same time, continue to support the measures of Pitt and Grenville, by giving credit to their promissory notes of payment? No new emissions of bank notes could go on while payment was demanding on the old, and the cash in the bank wasting daily away; nor any new advances be made to government, or to the emperor, to carry on the war; nor any new emission be made on exchequer bills. "_The bank_" says Smith, (book ii. chap. 2) "_is a great engine of state_." And in the same paragraph he says, "_The stability of the bank is equal to that of the British government_;" which is the same as to say that the stability of the government is equal to that of the bank, and no more. If then the bank cannot pay, the _arch-treasurer_ of the holy Roman empire (S. R. I. A.*) is a bankrupt. When Folly invented titles, she did not attend to their application; forever since the government of England has been in the hands of _arch-treasurers_, it has been running into bankruptcy; and as to the arch-treasurer _apparent_, he has been a bankrupt long ago. What a miserable prospect has England before its eyes! * Put of the inscription on an English guinea.--_Author_.