“A plan has been proposed for supplying the place of this multiplicity of banks, by admitting the existence of one general bank alone, having in most of the provincial towns branch establishments, where the notes of the bank would be paid on presentation. This idea is the most impracticable of all. With the inconveniences of the preceding plan, it combines a still greater inconvenience of its own; for it is evident that the bank, instead of merely holding in its principal treasury such portion of its capital as prudence might show to be necessary, would at the same time require to hold a similar portion in each of its branch establishments. But for this precaution, it would be in the power of evil-disposed persons to convey a considerable number of notes into any particular town in which there was a branch bank; even chance, or some circumstance impossible to foresee, might draw a great quantity of notes at one time into some particular branch bank, which might not be in a condition to honour them. If there were but fifty of these branch offices dispersed in different towns of the kingdom, the probability is, that there would be a failure of the bank in different places almost every day of the year, though the sums it held in cash, distributed among its different treasuries, might, in the aggregate, be very much beyond the whole demands made upon it.” * * * * * “As to the banking plan which has been proposed to you by the Minister of Finance, and which, on that account, merits your deepest attention, I shall add little to the observations which have already been made in opposition to it. I shall confine myself to a single remark, which, however, I must confess, appears to me decisive. This plan is founded on the creation of a paper circulation _not convertible into money at will_, consequently, on the creation of a paper-money. Now, there do not exist, at least in my opinion, two ideas more opposed to each other than the existence of paper-money and of a bank: the one bears the character of constraint and authority, whilst the other, on the contrary, can be maintained only by the most free and unlimited confidence. “Although I have thus shown, or at least mentioned, the inconveniences of most of the banking systems which have been proposed, it is not my intention to submit to you any plan of my own. I will, however, add a few observations bearing on the questions now under consideration. They may perhaps throw some light on principles which seem to me not sufficiently understood. “The fundamental law of any bank whatever, is to fulfil its engagements when they fall due: I know of no other. If the particular position of the bank is such as to enable it to undertake engagements at sight, and payable at any moment, then this bank should be so regulated as to be at all times fully prepared to pay its engagements on presentation. Such is the rule which common sense would dictate.