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THE POPULAR SCIENCE MONTHLY. 



fore been met by extending the bank's powers, nor is it obvious how 

 any could be given except through the agency of the bank. 



Extending the comparison between the English system and that of 

 the United States, with the national-bank notes retired, the legal tend- 

 ers, although much greater in volume, might be likened to the seventy- 

 five million dollars that the Bank of England issues against its securi- 

 ties, while the bank's specie-secured issues would find their parallel in 

 the gold and silver certificates. These now amount to something more 

 than two hundred and fifty million dollai's. They have not very far 

 to go before they would equal the national-bank notes outstanding, and 

 the expediency of largely increasing the issue is freely discussed. 



But in the workings of the two systems here compared there would 

 be an important difference. 



When the act of 1844 was being urged, its advocates recognized 

 that in extreme cases a rigid adherence to its provisions might be 

 mischievous, and special governmental interference be found neces- 

 sary. Experience has shown that such compelling emergencies do 

 arise. Warned by this, Mr. Lowe, Chancellor of the Exchequer, 

 introduced into the House of Commons in 1873 a bill providing for 

 automatic suspension, so to speak. He proposed that the Government 

 might lawfully suspend the bank act when certain conditions obtained, 

 conditions presumed to be indicative of a panic ; but the bill was not 

 received with favor, and was withdrawn. AVhat the effect of a strict 

 adherence to the act in time of panic would be, it is difficult to pre- 

 dict it has never been tried. 



It is not easy to see how, even if it were made lawful, relief could 

 be given in the case of a strictly governmental issue, consisting, for 

 example, of specie certificates and legal tenders. If additional issues 

 of the latter were authorized, how, in time of peace, would they be put 

 .dioat ? Certainly few would be willing to have the Treasury Depart- 

 ment take up the business of banking and make advances on miscella- 

 neous securities. But the time would certainly come when the tem- 

 porary relief given by clearing-house certificates would be found to 

 be, or at least be thought to be, inadequate, and an increase of currency 

 be demanded. Could there be any assurance that the power to make 

 such increase resting in Government officials would be exercised with 

 the caution shown by the Governor and Company of the Bank of Eng- 

 land, who are restrained by considerations both of prudence and profit ? 

 An illustration of the course likely to be pursued was furnished in 

 1872-73, when forty-four million dollars of legal tenders, which had 

 been retired by Secretary McCulloch, were dubbed a reserve, the re- 

 issue of which was demanded and granted to the extent of twenty-six 

 million dollars. There are ample grounds for the fear that any sys- 

 tem under which the Government should furnish, in whatever form, 

 the whole supply of the paper money of the country, would keep 

 us constantly on the lee -shore of an inconvertible paper currency, 



