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What a bank can with propriety advance to a merchant or

undertaker of any kind, is not either the whole capital with

which he trades, or even any considerable part of that capital;

but that part of it only which he would otherwise be obliged to

keep by him unemployed and in ready money, for answering

occasional demands. If the paper money which the bank advances

never exceeds this value, it can never exceed the value of the

gold and silver which would necessarily circulate in the country

if there was no paper money; it can never exceed the quantity

which the circulation of the country can easily absorb and

employ.