The old specie paying system (so called) could add to the loanable capital of the country, _only by so much currency as it could keep in circulation, over and above the amount of specie that it was necessary to keep on hand for its redemption_. But the amount of loanable capital which the proposed system can supply, hardly depends at all upon the amount of its currency that can be kept in circulation. It can supply about the same amount of loanable capital, even though its currency should be returned for redemption immediately after it is issued. It can do this, because the banks, _by paying interest on the currency returned for redemption_--or, what is the same thing, by paying dividends on the PRODUCTIVE STOCK transferred in redemption of the currency--can postpone the payment of specie to such time as it shall be convenient for them to pay it. All that would be necessary to make loans practicable on this basis, would be, that the banks should receive a higher rate of interest on their loans than they would have to pay on the currency returned for redemption; that is, on the PRODUCTIVE STOCK transferred in redemption of the currency. The rate of interest _received_ by the banks, on the loans made by them, would need to be so much higher than that _paid_ by them, on currency returned for redemption, as to make it an object for them to loan more of their currency than could be kept in circulation. Subject to this condition, the banks could loan their entire capitals, whether much or little of it could be kept in circulation. For example, suppose the banks should pay _six_ per cent. interest on currency returned for redemption--(or as dividends on the PRODUCTIVE STOCK transferred in redemption of such currency)--they could then loan their currency at _nine_ per cent. and still make _three_ per cent. profits, even though the currency loaned should come back for redemption immediately after it was issued. But this is not all. Even though the banks should _pay_, on currency returned for redemption, precisely the same rate of interest they _received_ on loans--say _six_ per cent.--they could still do business, if their currency should, on an average, continue in circulation _one half the time for which it was loaned_; for then the banks would get three per cent. net on their loans, and this would make their business a paying one. But the banks would probably do much better than this; for bank credits would supersede all private credits; and the diversity and amount of production would be so great that an immense amount of currency would be constantly required to make the necessary exchanges. And whatever amount should be necessary for making these exchanges, would, of course, remain in circulation. However much currency, therefore, should be issued, it is probable that, on an average, it would remain in circulation more than half the time for which it was loaned.