railways (if he could have understood what a railway meant), for you
would not have been able to collect the capital with which to make
them. At this moment, in colonies and all rude countries, there is
no large sum of transferable money; there is no fund from which you
can borrow, and out of which you can make immense works. Taking the
world as a whole--either now or in the past--it is certain that in poor
states there is no spare money for new and great undertakings, and
that in most rich states the money is too scattered, and clings too
close to the hands of the owners, to be often obtainable in large
quantities for new purposes. A place like Lombard Street, where in
all but the rarest times money can be always obtained upon good
security or upon decent prospects of probable gain, is a luxury
which no country has ever enjoyed with even comparable equality
before.

But though these occasional loans to new enterprises and foreign
States are the most conspicuous instances of the power of Lombard
Street, they are not by any means the most remarkable or the most
important use of that power. English trade is carried on upon
borrowed capital to an extent of which few foreigners have an idea,
and none of our ancestors could have conceived. In every district
small traders have arisen, who 'discount their bills' largely, and
with the capital so borrowed, harass and press upon, if they do not
eradicate, the old capitalist. The new trader has obviously an
immense advantage in the struggle of trade. If a merchant have
50,000 L. all his own, to gain 10 per cent on it he must make 5,000
l. a year, and must charge for his goods accordingly; but if another
has only 10,000 L., and borrows 40,000 L. by discounts (no extreme
instance in our modem trade), he has the same capital of 50,000 L.
to use, and can sell much cheaper. If the rate at which he borrows