that the payment of interest is certain, the profits of trade are uncertain; the tradesman runs hazards of many kinds in his business; and if his profits sink at all by those hazards, the interest of money, which bears no share in the hazard, immediately breaks so far into his capital; and if any man will cast up the hazards, and value them in due proportions, as nice gamesters do the chances of the dice, they shall find, that if a tradesman, suppose him to have no stock but such as he borrows upon interest, was to gain twenty per cent. by his sale of goods, and pay but five per cent. interest for the money, yet that five per cent. shall, in the end, be his ruin, unless he can be supposed to trade under two qualifications:

1. To give no credit.

2. To sustain no losses.

Which are two circumstances hardly to be found anywhere in trade. Borrowing money upon interest may, in any accidental distress, deliver a tradesman from a present difficulty, supply an exigence, and answer the end just then before him; and would the man that borrows be immediately careful, as before said, to pay off the loan and the interest with all possible speed, looking on it as a loss sustained merely for present relief, he would be so far in the right; for nothing in this discourse is meant to persuade a tradesman not to borrow in an exigence.

But to borrow in the exigence and not use the loan to free him from it entirely, but to be prompted by it to run further in, and to launch into more business, when he has embarrassed himself too much by the same inadvertence before, this is nothing but going to work immediately to deprive himself

of the benefit which the loan might have been of to him, and effectually securing to himself the return of that very calamity, which the loan would, had it been rightly applied, have saved him from.

Let every tradesman then be cautious how he increases his trade upon a borrowed stock; if he has a capital stock of his own, yet he ought to be careful, and keep within bounds; but to launch out upon a borrowed fund, is, in short, putting to sea in a storm, and quitting a safe harbour for a hazardous voyage; it is, in trade, just what a seaman is on a lee-shore; if his anchor come home, and he cannot ride out the storm, he is infallibly lost; nothing can save him from running ashore among the rocks, where he must be dashed to pieces without remedy.

There is a very unhappy practice lately grown into use among the more necessitous part of tradesmen, and which is infallibly ruinous and destructive to them in the end, or at least as far as it goes; this is passing and repassing promissory notes, or bills, endorsed by one another reciprocally, and drawn upon themselves (so it may be called), for the present supply of cash and support of their affairs, and in which they are, indeed, extortioners upon themselves. But this shall be the subject of another chapter.

CHAP. XXX.

Of discounting and endorsing bills, and of the scandalous practice of passing promissory notes, on purpose to borrow money by discount. Its ruinous consequences exemplified in the ruin of a club of tradesmen, who joined in coining money, as they called it. The discounters to be deemed as birds of prey, which are to be shunned by all tradesmen. This ruinous practice owing chiefly to overtrading.

THERE is still another kind of trading usury, not included in that of borrowing money upon interest, and which eats out the heart of a tradesman's prosperity as much, if not more, than the other, especially when it is carried on to any height; and this, as it is become a more fashionable part of self-mischief in trade than usual, and is more practised than ever was known before, merits to be exposed; and the young tradesman should be warned of it as of a secret fire, that burning privately, is most dangerous in itself, as it is not thought so destructive by the tradesman as it generally proves.

This is what they call discounting of bills. There is a great variety in the thing, and more than is generally thought of; but it is one of the cases of which it may be said it consists of abundance of bad particulars, and not one good one. I will name some of the cases which are most important; the rest may be judged of by a few, and the tradesman will learn from those how to avoid the mischievous part of all the rest, and will especially know which

are the most dangerous; which are so in particular to his substance, which to his reputation, and which to both.

I have mentioned before the tradesman's giving long credit, which, as I have described it, is in many particular circumstances, very prejudicial to him, and sometimes ruinous; that is, in particular when he trusts for large sums, and the persons whom he sells to are not punctual to the times of payment agreed for.

Now the retailer or shopkeeper (who is the essential standard-man between the consumer and the maker), suppose he be a mercer, comes and buys of a weaver, who gives him credit, suppose three to four or six months' time, according as they agree.

The weaver having occasion to make payment to the silkman, or throwster, or merchant of whom he buys his silk, takes a note or promissory bill of his customer for the money, payable at the time agreed for payment when the goods were sold.

This in itself is fair and just dealing on both sides; for the buyer knows the terms of his agreement, and it is no injury to him to give bills for the money, and it is some advantage to the weaver, if he makes a right use of them; for he can go to the silkman, or throwster, or merchant, and buy more goods, giving those bills in payment; and so he takes credit, even where, perhaps, he had no credit before, the mercer's note being given as a kind of security for the money.

But this is the best and brightest part of the story; for perhaps the mercer, being what they call a little long-winded, when the time of payment comes, puts off the weaver for a month, or perhaps two months longer, pleading badness of trade, want of money, and the like; then the weaver, who, on the other hand, wants money to pay his journeymen,

or his silkman, throwsters, and merchant, tells the mercer that he is straitened for money too, as well as he, and therefore cannot stay as he proposes, but that if he cannot pay him yet he must give him a bill or promissory note, perhaps at a month, or two months or more, as he can get him to do it.

This the mercer cannot refuse, the money being, as I said, already due. Now, did the weaver, as above, only go and deliver those bills to his dealers in payment, where his debt was already due, there was no harm in it, and he only transferred the mercer's delay to the damage of the silkman, and made him stay for his money, as the mercer had obliged him, the weaver, to do before.

But the weaver, wanting the money immediately, perhaps to pay his journeymen, who cannot stay, or his silkman, throwster, and merchant, who, their money being already due, will not stay, and whom he must pay, or ruin his credit; away he goes to another kind of market, the very worst he can go to, I mean the discounter's; and there, paying an intolerable extortion of ten to fifteen or twenty per cent. premium, he gets money lent him upon these bills.

Here you must also observe, that he must endorse the bills, so that all the while they run, or are unpaid by the mercer, he stands the risk of them; and that is sometimes long beyond the time of payment; if it is too long, sometimes he is obliged to make an additional allowance to the first premium to the discounter.

Nor does the oppression or the expense of it end here; but sometimes, nay, very often, the exorbitant discounter, not content with his endorsement of the bill, requires another man to endorse also; every endorser being liable to make good the money, in case the mercer should prove insolvent.