Experience dictates differently the average size of deposit accounts for different banks according to the general character and amount of their business. For every bank there is a normal ratio and hence for a whole community there is also a normal ratio--an average of the ratios for the different banks. No absolute numerical rule can be given. Arbitrary rules are often imposed by law. National banks in the United States, for instance, are required to keep a reserve for their deposits, varying according as they are or are not situated in certain cities designated by law as "reserve" cities, _i. e._, cities where national banks hold deposits of banks elsewhere. These reserves are all in defense of deposits. In defense of notes, on the other hand, no cash reserve is required--that is, of national banks. True, the same economic principles apply to both bank notes and deposits, but the law treats them differently. The Government itself chooses to undertake to redeem the national bank notes on demand. The state banks are subject to varying restrictions. Thus the requirement as to the ratio of reserve to deposits varies from 12-1/2 per cent. to 22-1/2 per cent., being usually between 15 per cent. and 20 per cent. Of the reserve, the part which must be cash varies from 10 per cent. (of the reserve) to 50 per cent., usually 40 per cent. Such legal regulation of banking reserves, however, is not a necessary development of banking.... THE ROLE OF A SPECIE RESERVE ILLUSTRATED BY THE INCONVERTIBLE NOTES OF THE BANK OF ENGLAND ISSUED DURING THE OPERATION OF THE RESTRICTION ACT[37] [38]... Your Committee proceeded, in the first instance, to ascertain what the price of gold bullion [in terms of Bank of England notes] had been, as well as the rates of the foreign exchanges, for some time past; particularly during the last year. Your Committee have found that the price of gold bullion, which, by the regulations of his Majesty's Mint, is L3 17_s._ 10-1/2_d._ per ounce of standard fineness, was, during the years 1806, 1807, and 1808, as high as L4 in the market. Towards the end of 1808 it began to advance very rapidly, and continued very high during the whole year 1809; the market price of standard gold in bars fluctuating from L4 9_s._ to L4 12_s._ per ounce. The market price at L4 10_s._ is about 15-1/2 per cent. above the Mint price....