The second question—“Shall the Bank have permission to let its reserve of gold diminish so greatly as to risk the convertibility of its notes?” is not more profound than the first. It may fitly be answered by the more general question—“Shall the merchant, the manufacturer, or the shopkeeper, be allowed so to invest his capital as to risk the fulfilment of his engagements?” If the answer to the first be “No,” it must be “No” to the second. If to the {344} second it be “Yes,” it must be “Yes” to the first. Any one who proposed that the State should oversee the transactions of every trader, so as to insure his ability to cash all demands as they fell due, might with consistency argue that bankers should be under like control. But while no one has the folly to contend for the one, nearly all contend for the other. One would think that the banker acquired, in virtue of his occupation, some abnormal desire to ruin himself—that while traders in other things are restrained by a wholesome dread of bankruptcy, traders in capital have a longing to appear in the _Gazette_, which law alone can prevent them from gratifying! Surely the moral checks which act on other men will act on bankers. And if these moral checks do not suffice to produce perfect security, we have ample proof that no cunning legislative checks will supply their place. The current notion that bankers can, and will, if allowed, issue notes to any extent, is one of the absurdest illusions—an illusion, however, which would never have arisen but for the vicious over-issues induced by law. The truth is that, in the first place, a banker _cannot_ increase his issue of notes at will. It has been proved by the unanimous testimony of all bankers who have been examined before successive parliamentary committees, that “the amount of their issues is exclusively regulated by the extent of local dealings and expenditure in their respective districts;” and that any notes issued in excess of the demand are “immediately returned to them.” And the truth is, in the second place, that a banker _will not_, on the average of cases, issue more notes than in his judgment it is safe to issue; seeing that if his promises-to-pay in circulation, are much in excess of his available means of paying them, he runs a great risk of having to stop payment—a result of which he has no less a horror than other men. If facts are needed in proof of this, they are furnished by the history of both the Bank of England and the Bank of Ireland; which, {345} before they were debauched by the State, habitually regulated their issues according to their stock of bullion, and would probably always have been still more careful but for the consciousness that there was the State-credit to fall back upon.