A measure for further increasing the safety of the provincial public, was that which limited the circulation of provincial bank-notes. At the same time that it established {350} a sliding-scale for the issues of the Bank of England, the Act of 1844 fixed the maximum circulation of every provincial bank-of-issue; and forbad any further banks-of-issue. We have not space to discuss at length the effects of this restriction; which must have fallen rather hardly on those especially-careful bankers who had, during the twelve weeks preceding the 27th April, 1844, narrowed their issues to meet any incidental contingencies; while it gave a perennial license to such as had been incautious during that period. All which we can notice is, that this rigorous limitation of provincial issues to a low maximum (and a low maximum was purposely fixed) effectually prevents those local expansions of bank-note circulation which, as we have shown, _ought_ to take place in periods of commercial difficulty. And further, that by transferring all local demands to the Bank of England, as the only place from which extra accommodation can be had, the tendency is to concentrate a pressure which would else be diffused, and so to create panic. Saying nothing more, however, respecting the impolicy of the measure, let us mark its futility. As a means of preserving the convertibility of the provincial bank-note, it is useless unless it acts as some safeguard against bank-failures; and that it does not do this is demonstrable. While it diminishes the likelihood of failures caused by over-issue of notes, it increases the likelihood of failures from other causes. For what will be done by a provincial banker whose issues are restricted by the Act of 1844, to a level lower than that to which he would otherwise have let them rise? If he would, but for the law, have issued more notes than he now does—if his reserve is greater than, in his judgment, is needful for the security of his notes; is it not clear that he will simply extend his operations in other directions? Will not the excess of his available capital be to him a warrant either for entering into larger speculations himself, or for allowing his customers to draw on {351} him beyond the limit he would else have fixed? If, in the absence of restriction, his rashness would have led him to risk bankruptcy by over-issue, will it not now equally lead him to risk bankruptcy by over-banking? And is not the one kind of bankruptcy as fatal to the convertibility of notes as the other?