credit of the Company is firmly eftablished.

I have, without fuccefs, investigated every principle upon which a paper currency, under the authority, and upon the credit, of the Company, can be established; but the principle upon which this branch of credit is grounded is totally incompatible with fovereign power; it is founded on private utility, and it has even occafion for a fuperior authority to keep it within bounds.

Were the Company to open a bank in Bengal, fuch as the Bank of England; were this bank to become there as the other is in London, the center of all circulation; and were it to get poffeflion of a great part of the coin of Bengal, what fecurity could be given, that, upon a preffing occafion, this treasure might not be spent in the defence of the country? were it made a bank purely of depofit, like the banks of Amfterdam, Venice, Nuremberg, and many others upon the continent, the depofit contained in it would be expofed to the fame danger. Were it established upon the mortgage of land of land property, and upon the

best perfonal fecurity, as the banks established in Scotland are, the former inconvenience would not indeed be so great, befo cause the quantity of the bank treasure never could carry fo high a proportion to the notes in circulation. But, on the other hand, where is there to be found a folid property in land to be mortgaged for fuch an immense quantity of paper as is the un-. avoidable confequence of this plan of banking? and this growing deficient, the powers of fuch a bank would be very limited.

A fyftem of paper credit, fimilar to that established in the Colonies of North America, where the paper is iffued upon no other fecurity than the bare promise of the Colony to make it effectual, with an obligation to receive it in payment of their taxes, but without providing any fund to pay upon demand either the capital contained in the note in fpecific coin, or even an intereft corresponding to the fum during the delay of payment, is fo defective a scheme, and one fo liable to great objections, particularly fo that of gradually debafing

the value of their

money of account, that I never can recommend it to the imitation' of any trading nation.

But although I am of opinion that no bank can be established in Bengal under the authority of the Company, with the fame advantages as in Europe, where governments are better eftablished, and property well fecured, ftill I am far from believing that the circulation of Bengal may not be greatly affifted by the use of paper cur

rency.

I have obferved above, that the lending of money to strangers by the fervants of the Company, who have a redundancy of wealth, contributed not a little to produce a drain of specie from Bengal; I have also hinted, that certain reasons might engage the Company to borrow this money from them upon reasonable terms.

From this circumftance, I think there is an opening for the establishment of paper credit.

Let us then suppose the money borrowed by the Company from their fervants in India to be fufficient to compenfate what the latter now lend to ftrangers.

Were it proposed to them, either to fubfcribe their claims upon the Company into a banking fund, or to receive reimbursement from the Company to the extent of what may be fubfcribed by others for this purpose; this new fund may be divided into shares, of

rupees, transferable as the funds are in England, bearing

per

cent. intereft, irredeemable by the Com

pany for

years; and an exclusive privilege may be granted to the fubfcribers for the fame number of years, for the purpose of carrying on a banking trade; by the iffuing of notes in the discounting of goods, bills payable in days; or in confideration of pledges of treasure, jewels, or precious effects, deposited in the bank; or upon the mortgage of good property, and the best personal fecurity, for fuch length of time as may be judged reasonable and fafe; or in the purchase of gold and filver; or, lastly, for advancing certain fums of

money to the Company, upon the fecurity of their annual revenue, according to the practice of the Bank of England. All thefe articles of credit to be given in confideration of fuch rates of interest as to the Company may feem reasonable, and as the fame may be regulated by the Comin the charter to be by them granted pany to the faid banking company.

But the faid banking company shall be prohibited from launching out into any precarious object of commerce, or from iffuing their paper upon any other fecurities except thofe above fpecified. Under thefe, and fuch other regulations as the Eaft-India Company may think proper to add, this banking company may be laid open to natives as well as Europeans: it may begin to discount bills and notes of hand at fhort dates, which it may renew according to the goodness of the security; and the East-India Company may with safety receive in payments the paper it iffues upon discounting fuch bills and notes, to the extent of the money owing by themfelves; or they may furnish out of their