The third question—“Shall the Bank be allowed to issue notes in such numbers as to cause their depreciation?” has, in effect, been answered in answering the first two. There can be no depreciation of notes so long as they are exchangeable for gold on demand. And so long as the State, in discharge of its duty, insists on the fulfilment of contracts, the alternative of bankruptcy must ever be a restraint on such over-issue of notes as endangers that exchangeability. The bugbear of depreciation is one that would have been unknown but for the sins of governments. In the case of America, where there have been occasional depreciations, the sin has been a sin of omission: the State has not enforced the fulfilment of contracts—has not forthwith bankrupted those who failed to cash their notes; and, if accounts are true, has allowed those to be mobbed who brought back far-wandering notes for payment.[35] In all other cases the sin has been a sin of commission. The depreciated paper-currency in France, during the revolution, was a State-currency. The depreciated paper-currencies of Austria and Russia have been State-currencies. And the only depreciated paper-currency we have known, has been to all intents and purposes a State-currency. It was the State which, in 1795–6, _forced_ upon the Bank of England that excessive issue of notes which led to the suspension of cash-payments. It was the State which, in 1802, _forbad_ the resumption of cash-payments, when the Bank of England wished to resume them. It was the State which, during a quarter of a century, _maintained_ that suspension of cash-payments from which the excessive multiplication and depreciation of notes resulted. The entire corruption {346} was entailed by State-expenditure, and established by State-warrant. Yet now the State affects a virtuous horror of the crime committed at its instigation! Having contrived to shuffle-off the odium on to the shoulders of its tools, the State gravely lectures the banking-community upon its guilt; and with sternest face passes measures to prevent it from sinning! [35] This was written in 1858; when “greenbacks” were unknown.