State Bank Notes. 65 



mixture upon a period of several years as a whole, we may 

 eliminate the causes of complication and find a practical 

 certainty that the note-circulation would show a progres- 

 sive increase. For all the effects upon the coin-supply 

 that the occasional presence of more notes can have are 

 upon one side, in the direction of making the coin-supply 

 less than it would otherwise have been. The issue of more 

 notes at the crop-season will check the rise of short-time 

 interest and make money easier; in fact, that is what it is 

 intended for. Easier money means a better maintenance 

 of prices of goods, and consequently less encouragement 

 of purchases here by foreign buyers and less tendency to 

 start an import of gold or a diminution of its export. In 

 short, the pressure at the crop-season, so far as it is now 

 relieved by any retention or import of gold, would force 

 less relief of that kind because the pressure itself would 

 be less. This, in turn, is only a part of the more general 

 statement that whenever there is any change in our money- 

 stock of gold, the presence of recently added bank notes 

 in the circulation tends to make the increase of gold less 

 or the decrease more than it would otherwise have been; 

 for if any given quantity of these bank notes had been ab- 

 sent, the tightness of the money-market would have been 

 increased or its plethora diminished. Taking any period 

 of years, we may rely upon it that effects of this kind will 

 have happened while the extra bank notes of the crop- 

 season were afloat, in which case bank notes will have taken 

 the place of the coin expelled. And these changes will be 

 cumulative, because the presence of bank notes always acts 

 on that side when it acts at all. 



MEANS Oi ENFORCING CONTRACTION. 



The importance of this practical certainty that the bank 

 note supply will increase from year to year if the checks 

 are so balanced against profit as to permit an easy increase 

 of notes at every maximum of business, and if no special 

 devices are used to force all the new notes back when busi- 

 ness slackens, lies in its strongly commending to us the 

 use of such special devices if we undertake to make an 



