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# Drawing and Redrawing

## Definition

A practice where merchants draw bills on each other in a circular pattern to raise money through repeated discounting, often involving accumulated interest and commission. This creates artificial credit that can be very expensive.

## Source Chapter

Book II, Chapter 2

## Context

Smith criticises drawing and redrawing as an expensive method of raising money that often leads to over-trading and eventual bankruptcy. He describes it as a practice that emerged when banks refused to extend excessive credit.

## Economic Domain

Exchange

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