Sunday, September 21st, 2014
Facebook / Twitter / Tumblr / Podcast

1790 / Philadelphia

Livestock

Tags:
,
,
,

Gold and silver, where they are employed merely as the instruments of exchange and alienation, have been not improperly denominated dead stock; but when deposited in banks to become the basis of a paper circulation, which takes their character and place as the signs or representatives of value, they then acquire life, or, in other words, an active and productive quality. This idea, which appears rather subtle and abstract in a general form, may be made obvious and palpable by entering into a few particulars. It is evident, for instance, that the money which a merchant keeps in his chest, waiting for a favorable opportunity to employ it, produces nothing till that opportunity arrives. But if, instead of locking it up in this manner, he either deposits it in a bank or invests it in the stock of a bank, it yields a profit during the interval in which he partakes, or not, according to the choice he may have made of being a depositor or a proprietor; and when any advantageous speculation offers, in order to be able to embrace it, he has only to withdraw his money if a depositor or, if a proprietor, to obtain a loan from the bank, or to dispose of his stock; an alternative seldom or never attended with difficulty when the affairs of the institution are in a prosperous train. His money, thus deposited or invested, is a fund upon which himself and others can borrow to a much larger amount. It is a well established fact that banks in good credit can circulate a far greater sum than the actual quantum of their capital in gold and silver.

Bookmark and Share
Love this? Subscribe to Lapham's Quarterly today.

Post a Comment

Note: Several minutes will pass while the system is processing and posting your comment. Do not resubmit during this time or your comment will post multiple times.

Published In
About Money
About the Text

Alexander Hamilton, from his "Report on a National Bank," delivered to the U.S. Congress. Hamilton served in the first cabinet of the United States as George Washington's Secretary of the Treasury.

The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of hissing.
Jean-Baptiste Colbert
Visual Aids
Rites of Passage Coming-of-age rituals from around the world.
Art, Photography, & Illustrations View a selection of art from our latest issue.
Charts & Graphs All of our charts and graphs, pulled from the pages of Lapham’s Quarterly.
Events & News
June 2 / Tickets for the DECADES BALL are available now. Join us at our yearly gala to celebrate the 1870s with readings from the Quarterly with stars of stage and screen. More
Apropos

Vague Premonitions

The Great Beyond

Subscribe
Current Issue Youth Summer 2014
Blogs

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Audio & Video
LQ Podcast:
Robert Weide
Robert B. Weide talks about his decades-long production of a documentary on Kurt Vonnegut due to be released in 2015.
Eponym
Lewis H. Lapham is Editor of Lapham's Quarterly. He also serves as editor emeritus and national correspondent for Harper's magazine.
Recent Issues