Page:The wealth of nations, volume 3.djvu/225

 A State may sometimes derive some part of its public revenue from the interest of money, as well as from the profits of stock. If it has amassed a treasure, it may lend a part of that treasure, either to foreign States, or to its own subjects.

The canton of Berne derives a considerable revenue by lending a part of its treasure to foreign States; that is, by placing it in the public funds of the different indebted nations of Europe, chiefly in those of France and England. The security of this revenue must depend, first, upon the security of the funds in which it is placed, or upon the good faith of the government which has the management of them; and, secondly, upon the certainty or probability of the continuance of peace with the debtor nation. In the case of a war, the very first act of hostility, on the part of the debtor nation, might be the forfeiture of the funds of its creditor. This policy of lending money to foreign States is, so far as I know, peculiar to the canton of Berne.

The city of Hamburg has established a sort of public pawnshop, which lends money to the subjects of the State upon pledges at six per cent interest. This pawnshop or Lombard, as it is called, affords a revenue, it is pretended, to the State of a hundred and fifty thousand crowns, which, at four-and-sixpence the crown, amounts to £33,750 sterling.

The government of Pennsylvania, without amassing any treasure, invented a method of lending, not money indeed, but what is equivalent to money, to its subjects. By advancing to private people, at interest, and upon land security to double the value, paper bills of credit to be redeemed fifteen years after their date, and in the meantime made