384 Jones—Belation of Economic Crises to Legislation . 
mous paper currency is erected upon an uncertain balance of de¬ 
posits. The end of this progression is always a financial 
crises.' Then to the growing inequality in the distribution of 
business profits, a total break-down of the credit system is 
added. 1 
Under a system of free banking these evils are avoided. 
Every attempt to realize undue profits in the issue of credit 
will attract new capital and increase competition until the same 
level of profits is reached for money and talent invested in this 
as in any other branch of competitive industry. 2 The circulation 
of notes of private issue is dependent upon the extent to which 
they will be received by other bankers. Each institution, 
therefore, must keep watch upon the others. 3 The motive of 
self-interest will lead to the immediate exclusion of the notes of 
such institutions as depart from the true principles of trade, 
and attempt to introduce dishonest and dangerous methods. 4 
1 Coquelin, op. cit. pp. 447-457. 
2 Coquelin, op. cit. pp. 457-470. Precisely the same theory and explan¬ 
ations are to be found in H. C. Carey, “ Credit Systems,” pp. 57-58 and 
66. Coquelin recognizes Carey’s work and recommends it very highly. 
3 The report of the “ Banque Enquete” of 1866 advances this. Cf. Leon 
Smith in Say’s “ Dictionnaire,” Tome I, p. 159; also Gamier “Traite d’ 
Economic Politique.” 
4 Courcelle-Seneuil though by no means extreme in his views (see 
“ Journ. des Econ.,” Tome 43, p. 163), has thus described the advantage¬ 
ous working of competition: “On peut supposer, il estvrai, 1’ existance 
d’ un banquier de fantaisie, leger, sans prevoyance et sans scrupule, dis¬ 
pose a user pour ses depenses personnelles du credit qu’ il obtinent du 
public. Ce banquier pourra abuser sans doute des Emissions de billets 
comme de toutes les autres formes du credit; mais il sera surveille dans 
ce cas comme dans tous les autres, par la pefiance des interessSs. Or, 
quels seront les plus interesses a ne pas prendre de mouvais billets? 
Justement les autres banquiers qui sont, ainsi que lui, les caissiers gen- 
draux du commerce, et se trouvent parfaitement plac pur etre ren- 
seignes sur la nature de ses operations, et, en definitive, sur la solvabil- 
ite. On comprend, en effet, que le jour du les banquiers cessent de rece- 
voir les billets d ’une banque, ces billets ne peuvent plus resters en cir¬ 
culation, parce qu’ils remplacent la monnaie et que le mouvement 
naturel des echanges amene sans cesse la monnaie de toute sorte dan- 
la caisse des banquiers. Le public a done, quant aux emissions de bil¬ 
lets dont a contre-valuer aurait, ete consommee, des garanties au 
