Further of the Utility of a Bank
The author admits he does not have exact information on the quantity of money, notes of deposit, and bills of credit are maintained by banks, but he reckons these sums are not quite so large as commonly suspected.
Most of the money in an economy is in circulation, in transit from one hand to the next. Even when profit is earned in the course of exchange, it is generally spent on something else, and seldom amassed by most individuals. In this sense he supposes that the amount of money stored in banks is likely to be less than 10% of the money circulating in a state.
He nonetheless speculates on this for quite some time (EN: I'm not going along for the ride.)
He then presents several scenarios and examples that demonstrate the way in which banks cause more money to be in circulation. He considers Tiberius whose horde of silver coins was so great that money was seldom seen in the streets, to the point where it paralyzed both domestic commerce and foreign trade.
By issuing notes and letters of credit, a banker enables such a miser to retain ownership of silver that is in circulation, and enables trade to occur by use of banknotes, without the use of metal at all.
Coin must remain in circulation for ordinary expenditures of the citizens: food and drink, clothing, household goods, and the like, but for many commercial transactions, paper will readily and more conveniently substitute.