Previous
Bank Money
Banknotes, the most common kind of bank money, are paper bills on which a bank promises to pay the bearer a specified amount of money. Modern paper currency actually just consists of banknotes issued by a country’s central bank.
Get the entire The Wealth of Nations LitChart as a printable PDF.
Banknote Term Timeline in The Wealth of Nations
The timeline below shows where the term Banknote appears in The Wealth of Nations. The colored dots and icons indicate which themes are associated with that appearance.
Book 2, Chapter 2
...is a better alternative to gold and silver coins, which are unduly costly to obtain. Banknotes are the best kind of paper money because people’s confidence in banks is as strong...
(full context)
...taken almost half of the country’s gold and silver out of circulation. Banks typically create banknotes by discounting, or issuing people credit in exchange for a later repayment with interest. But...
(full context)
...to lend merchants more than the amount their operations required them to hold in cash. Banknote issuance cannot cross this threshold as long as the notes are tied to real-world debts,...
(full context)
...become bankers—and many of them go bankrupt, harming the poor people who were using their banknotes. It’s better to limit banknotes to higher values, which ensures that gold and silver continue...
(full context)
...grow, and only two restrictions should be placed on it: there should be no small banknotes, and banks should be required to pay back all notes on demand.
(full context)
Book 5, Chapter 2
...states, while Hamburg runs a public pawn shop and Pennsylvania issues paper credit similar to banknotes, using land as collateral. But stock and credit are too “unstable and perishable” to fund...
(full context)
