“So long as bank directors conform, in this respect, to the rules of prudence, their notes obtain such a degree of confidence, on account of the readiness with which they are handled and circulated, that cash is often brought for the purpose of buying notes on their treasury. If, on the contrary, abusing this confidence, and desirous of extending their transactions and their profits, they allow themselves at any time to alienate a portion of their funds, to such an amount as might subject them to the risk of being applied to for more cash than they possess, in that case there is at once an end of confidence. Thenceforward, their notes are looked upon only as paper, of which the payment is uncertain; and, as the business relations of the _Banque de Secours_ connect its directors with all the bankers of the capital, and with almost all the branches of circulation in the kingdom, there arises a feeling of great distrust at home, and still greater abroad, which rapidly turns the exchange to our disadvantage, and leads to a restriction of the currency and all the evils resulting therefrom. “What, then, should be the conduct of the directors of such an establishment at periods when confidence is shaken? Their course is very simple. They ought to know that at those times they may be applied to for payment of a portion of their notes, perhaps of all. They ought, therefore, to use only an unimportant portion, or even none, of the funds in their treasury destined to redeem their notes. “It would be absurd, therefore, for the directors of a _Banque de Secours_ to pretend there was nothing wrong in its management so long as they should maintain in their treasury an amount of cash equivalent to the _third_ or _fourth_ part of the amount of their notes in circulation. In this respect, it is impossible to fix any absolute proportion. It is necessary that the directors of a bank should possess a sufficient degree of foresight to provide themselves, not with a fourth or a third, but with a half, or three fourths, or even the whole amount of the funds representing the notes, whenever any corresponding number of notes are likely to be presented for payment. “But, it may be said, the bank would in that case make no profit. To this I reply, that the chief object of the protection which the government or the nation may grant to a _Banque de Secours_, is not to enable those holding an interest in the bank to make, under all possible circumstances, considerable and uninterrupted profits. Undoubtedly the nation should desire to see the bank prosper, because it is by profit alone that the interested parties can be induced to maintain an establishment of the sort, and because the existence of such an establishment is useful in a state; but the nation has no interest in desiring more than that the shareholders should make such profits as are sufficient to induce them to carry on the bank.” * * * * *