<!-- generated: provider=openrouter model=arcee-ai/trinity-large-preview:free date=2026-02-19 source=book-2-chapter-02 -->

# Cash Accounts

## Definition

Credit arrangements where banks allow merchants to borrow money up to a certain limit, repaying and re-borrowing as needed. This system provides merchants with access to capital without maintaining large cash reserves.

## Source Chapter

Book II, Chapter 2

## Context

Smith describes cash accounts as a Scottish banking innovation that allows merchants to operate with less idle capital. He explains how this system increases the efficiency of capital use and enables merchants to carry on larger trades.

## Economic Domain

Exchange

---
