MR. MANUFACTURER: I am quite sure that we all agree that not only should the bank notes be currently redeemed in gold coin, but to make them doubly safe, safe beyond any peradventure, they ought also to be a first lien upon the assets of the bank issuing them. During the week I read somewhere that the Scotch Banks had been in operation 217 years, and that they did not start the deposit and checking system until they had been in operation for 140 years. During all that time they simply exchanged their notes for the notes of the farmers, the shopkeepers, the manufacturers and anybody who was entitled to credit. MR. BANKER: Now, if you will allow me, I will produce some further historical evidence. The greatest financial genius that the United States has produced, and one of the greatest the world has produced, drew the charter of the first United States Bank upon which the second was modeled. Both of these banks were pure credit currency banks, and were founded upon the very soundest banking principles; but both of them were the victims of political strife and party feud. No man who has ever lived more clearly comprehended the principle of credit than did Alexander Hamilton. The highest note issue of the first United States Bank was $5,900,000, and deposits were $5,000,000. The highest note issue of the second United States Bank was $23,000,000, and the deposits were $2,600,000. In 1800, under the inspiration of Napoleon Bonaparte, undoubtedly as great an economist as soldier, the Bank of France was organized, and is the most striking single example in all history of the bank credit currency principle. It has to all intents and purposes always had the right of unlimited note issue, as the limit is always fixed far beyond the requirements of trade. The amount of the notes outstanding are usually ten times as large as the deposits. The notes now exceed $1,000,000,000, while the deposits are only about $100,000,000. In a single week there has been a conversion of $75,000,000 of deposits into notes, and a reconversion of a corresponding amount of notes into deposits. As a result of the destruction of the second United States Bank by a veto of President Jackson, there were established in various states of the Union banking institutions, largely modeled upon the work of Hamilton. These institutions showed remarkable strength and rendered most significant service to those sections of the country where located.