“ It is not by augmenting the capital of the country, but by rendering a greater part of that capital active and productive than would otherwise be so, that the most judicious operations of banking can increase the industry of the country. ”
Adam Smith, The Wealth of Nations (1776). copy citation
| Author | Adam Smith |
|---|---|
| Source | The Wealth of Nations |
| Topic | capital industry banking |
| Date | 1776 |
| Language | English |
| Reference | An Inquiry into the Nature and Causes of the Wealth of Nations |
| Note | |
| Weblink | http://www.gutenberg.org/files/3300/3300-h/3300-h.htm |
Context
“I do not, however, pretend to warrant either the greatness of the sum, or the shortness of the time. Upon other occasions, this great company has been reduced to the necessity of paying in sixpences.
It is not by augmenting the capital of the country, but by rendering a greater part of that capital active and productive than would otherwise be so, that the most judicious operations of banking can increase the industry of the country. That part of his capital which a dealer is obliged to keep by him unemployed and in ready money, for answering occasional demands, is so much dead stock, which, so long as it remains in this situation, produces nothing, either to him or to his country.” source
It is not by augmenting the capital of the country, but by rendering a greater part of that capital active and productive than would otherwise be so, that the most judicious operations of banking can increase the industry of the country. That part of his capital which a dealer is obliged to keep by him unemployed and in ready money, for answering occasional demands, is so much dead stock, which, so long as it remains in this situation, produces nothing, either to him or to his country.” source
Meaning and analysis
