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nearly so bad as that of sovereigns refused continually, at 

 their nominal value, for want of weight. It is, however, de- 

 sirable not to offend this prejudice against small notes, if 

 possible, and, therefore, to reserve no more of represented and 

 free gold and silver than would be necessary, and sufficient, 

 being freely exported when recpiired, to keep the notes at par 

 with the standard price of gold, and to adjust the foreign 

 exchanges. As a portion of the mass of money would be 

 paper not representing gold, but resting on all the wealth of 

 the nation, through the government securities ; this portion 

 could not be converted into gold, neither should it be pro- 

 mised. But it should be promised that all the gold should be 

 exchanged for notes ; and this should be done as long as gold 

 was recpiired, even though it should trench on the coined por- 

 tion. And that the gold might not be taken of mere caprice, 

 it should be exchanged in a form such as would not circulate 

 as cash in the country. Gold should then be regarded not as 

 the chief basis of the currency of the country, but chiefly re- 

 tained, at a great expense indeed, for a secondary international 

 convenience. And the paper should be clearly understood to 

 be practically, but not absolutely, convertible, and only con- 

 nected with gold to define their mutual value ; but itself, in 

 reality, resting on all the wealth of the country. 



"With this arrangement, while things were plentiful and 

 prices moderate, the gold reserved in the banks of issue might 

 remain imtouched, and the notes circulating and representing 

 it would pay the interest. In a time of need the gold would 

 be required, and then it must be paid out for notes as it was 

 bought in. But, instead of allowing a defalcation of the 

 money and making it scarce, the notes should immediately 

 re-issue upon government securities. The securities would be 

 bought in or exchanged for notes, and the interest saved for 

 the nation. When the tide of gold returned, they would 

 have to be sold out to make room for it, and the interest paid 

 as usual. Nor is it likely they would be bought and sold at 



