984 REMARKS ON SPECIE RESERVES AND BANK DEPOSITS. 
and counting of bank-bills would be obviated. Bank labor would thus probably be as 
much economized by the proposed institution, as it has been by the establishment of a 
Clearing-House. 
It is, perhaps, difficult to understand how the individual banks in which the deposits 
are actually lodged should have the full use and benefit of the funds so intrusted to 
them, and at the same time, the Great Bank should be able to use these deposits over 
again, this latter use not at all interfering with the former one. But this is only the 
same phenomenon which presents itself in the relation between one of the individual 
banks and the private depositors in it. A trader certainly does not lose the use of his 
surplus funds when he deposits them in a bank, but can still pay his debts with them, 
or draw them out by a check whenever wanted. Yet the bank also has the full benefit 
of them, as it employs every dollar of the average amount of its deposits in discounting 
notes for its own profit, experience showing that the aggregate amount of these depos- 
ited funds continues with little fluctuation, the daily withdrawals being constantly made 
up by fresh deposits. The private trader cannot safely put his surplus funds out of his 
own control for a single day, and therefore lodges them in a bank where they are pay- 
able on demand. The bank, then, could not safely use them if it had but one depositor ; 
but having many, the stream which is constantly pouring into it from many sources 
compensates the occasional outgoes, and leaves the amount within the bank standing 
always at about the same level. In like manner, the Great Bank, resting on the aggre- 
gate deposits made in many individual banks, can safely make such use of the enormous 
fund thus placed at its disposal as no single bank could make of any fraction of it. For 
the deposit which is paid out of any individual bank may be paid into any other bank, 
and thereby so cripple the former as to compel it to stint its accommodations even to 
its regular customers. But, as already stated, the deposit which is paid out of the ag- 
gregate in the Great Bank must be immediately paid back into the same aggregate, thus 
leaving the institution just as strong as before. The only exception will be the com- 
paratively rare one already noticed, a deposit being drawn down to enable the depositor 
to remit specie abroad or to other cities. The amount of such remittances must always 
be trifling in comparison with the whole amount of the deposits. Almost the sole func- 
tion, at present, of the specie reserve, is to provide for such remittances; and experience 
has shown, that an aggregate specie reserve of five millions is amply sufficient for this 
end for all the Boston banks, while the aggregate deposits amount to eighteen millions. 
Indeed, when it is remembered that immediate bank debt is the currency which 
affords the means of paying off private debts, it becomes evident that the arrangement 
here proposed will just double the amount of this currency. At present, for instance, 
