REMARKS ON SPECIE RESERVES AND BANK DEPOSITS. 371 
through the Clearing House, but in part by presentation or payment at his own 
counter. He is just as sure of this as he is that, if he goes out in the rain without an 
umbrella, he will be wet. And as the undue issue can be made only by discounting 
notes which have some weeks or months to run, while the reflux, taking place within 
twenty-four hours, can be met only out of the ordinary funds, including the specie 
reserve, thus at once crippling his means and endangering his credit, he will take good 
care not to make any such issue, and will even resist the pressing solicitations of his 
best customers, in order to avoid it.* The exceptions to this rule, growing out of the 
irregular and even fraudulent practice of discounting liberally to individuals who, 
doing business at a distance, will send off the bills on a long journey, whence they 
* Extracts from the evidence given to a Committee of the House of Commons, in March, 1858, by James 
Bristow, director of the Northern Banking Company of Belfast, and representing before the Committee all 
the Belfast banks. 
“I have been practically acquainted with the business of issuing [bank] notes upwards of forty years.” 
“Ts it your opinion, from your experience, that your bank, or any other bank, have it in their power to 
increase the issue of notes at their pleasure ? — Certainly not. 
* Any increase of notes beyond that which was absolutely required for the uses of the community would be 
returned as rapidly as they were issued ? — They would. 
* As long as you have deposits payable on demand, and you are issuers of notes, can you, by any action of 
your own, restrict or reduce the quantity of notes in circulation ? — You can restrict it by not discounting bills; 
but you must be prepared to issue something in payment of your deposits. 
“If you were to attempt to restrict by not discounting bills, it would produce an action upon your deposits? 
— Decidedly. 
* And if you were not prepared to meet that action by your notes, you must do so by coin or by some other 
means ? — Yes. | | 
“ You cannot, therefore, influence in any way the actual amount of currency, whether of notes or of coin, 
or the two together, in the hands of the public? — Not in any way, I believe. I never could discover a way 
in which I could do it. 
* And that is the conclusion to which you have come from a long experience, and having thought upon and 
observed the matter ? — It is." 
“ As a banker, would you ever feel justified in making an advance if the person to whom you were going to 
make it were willing to take your notes, which advance you would not be justified in making if he were to 
demand coin? — Never. 
* You would feel that it would be unsafe banking, and contrary to all rule, if you were to make an advance 
in notes which you could not make in sovereigns ? — Decidedly. ; 
“ On the ground that you would know, that if the notes were not required, they would come back upon you 
for payment immediately ?— I look upon all advances as made from capital; they do not increase our 
circulation. ; 
* And practically speaking, whether your advances are large or small, that fact, for the time being, has little 
or no effect upon the amount of your circulation ? — It has not." 
