ABSTRACT
Now, what I wish to show by this is, that if the exchanges were at par, and you have only one bank of issue, when you had issued those notes, if the trade was to decline, so that you did not want the notes, those notes could not be returned to the issuing bank, because, being issued upon what are called currency principles, not banking principles, you could only return those notes to the bank in exchange for gold; and if you returned them in exchange for gold, and put the gold in circulation,your currency would be just as much in excess as before; consequently, during some months of the year you must have a great abundance of money, which would reduce the rate of interest, excite speculation, and lead to foreign investments; and if, by those means, the exchanges were turned, and a portion of the gold was then taken away, being given out by the Bank in exchange for notes,
the exchanges might be turned against you at the very time when the revolutions of trade required the currency to be increased.
