JB/002/246/001

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3o Note
Abstract
Ch.
5
The defalcation from
wealth in part of
quantity and security
will be several times
the amount of the
money defalcated.

Ch. XII

The defalcation tha made from commercial security,
by the defalcation of a given mass of money (cash
or paper makes to this purpose no difference) would upon examination be found greater than
may bemight have been supposed. The quantity amount of the annual receipts year's income
of the country on the score of income and capital taken together may be (without any error capable of
affecting the argument) be stated as not much over or under three times the amount
of the money of the country, cash and paper
taken together (a) SupposeCall then the The quantity of Bank of (a) Note in
p. 8.157
England paper habitually issued and kept out in circulation, £10 millions:
and of that habitually habitu habitual £10 millions
suppose at a particular time, one million cancelled or kept
back: for instance by reducing the usual discounts toa defalcation in
to that amount from the usual discounts. Here then is produced already by the defalcation
of this single million from the quantity of money
in circulation, a defalcation to the amount of money of 3 millions
from the mass annual receipts of money that should have been received in the course of the year: income and this without any allowance
made from the for the proportion of the money
of both sorts (cash & paper) that willmust always be hoarded and kept out of circulation in the shape of capital
waiting for employment, or the cash that must <add>always</add>be kept up in the same way serving as a fund for answering
of reserve for answering the engagements, contracted by that paper part of
the currency which is in paper

Call the amount of money kept up as above inon both these
accounts in the shape of capital one fourth of the whole, then will
a defalcation as above from the quantitymass of money by a defalcation
to that amount from the quantity of Bank paper issued
and kept out, produce instead of the defalcation above supposed if three
millions, a defalcation of four 4 millions, from the mass
of income money receipts

Suppose again that byfrom reason of the alarm, excited by this
defalcation andfrom Bank paper, and by whatsoever was the cause of that such defalcation
another millions (cash and paper together) is hoarded up, and
kept out of circulation out of the portion which otherwise - millios above spoken
of, to eight millions.]
But
would have continued in the circulation: on this <add>here then</add>supposition then again
in the defalcation from the mass of the years money receipts income from this fourmillions

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