70 Colorado College Studies. 



able. All that can be done is to vary the nature of the 

 checks; and wherever that can be done by the state gov- 

 ernments it can be done by the national government. If 

 it is desired to increase the note-circulation, that end is 

 reached as certainly by removing taxes from national bank 

 circulation as by removing them from state bank circula- 

 tion. If it is desired to make temporary contractions easier, 

 by reducing the expense and trouble of withdrawing de- 

 posited bonds and redeeming the notes, or to adopt the Knox 

 I)lan or the second plan described in this article, every 

 detail of the improved process can be apj)lied by the na- 

 tional government as easily as by the state governments, 

 and indeed with less expense. Anything that would be 

 dangerous in a national bank note system would be as 

 dangerous (and usually more dangerous) in a state bank 

 note system. And any imaginable gain under state super- 

 vision can be had as well or better under national super- 

 vision. 



The difficulty of framing a good system of bank note 

 law and supervision by forty-four distinct legislatures needs 

 no detailed discussion, unless by a competent humorist. 

 There is no hojie that a jumble of various state-systems 

 would " average up" into a good bank-note circulation. If 

 in ten states, five states, one state, the system is bad, 

 there will appear bank notes imperfectly guarded by secu- 

 rities or dependent upon too small a reserve, in which case 

 it is only a question of time when some bank will let its 

 notes go to protest; to say nothing of the moral certainty 

 that the wish of the legislatures to see the new system well 

 started would cause the checks upon profits to be set too 

 low, so that (taking the country through) there would be 

 a large unnecessary original issue of notes, coming before 

 any need of trade called for them, and merely crowding 

 out better money.* In whatever states the notes were 

 insecure, those states would suffer annoyance and occa- 

 sional loss by circulation of such notes; some of the notes 



*This point has not received the attention it deserves. Its practical impor- 

 tance is great. 



