In a previous chapter we saw that under the Act of 1844 the Issue Department was to be separated from the Banking Department, and that it was at liberty to issue £14,000,000 of notes against securities, of which the Government Debt, amounting to £11,015,100, was to form a part. Any issue of notes above this amount of £14,000,000 was to be secured by an equal amount of coin or bullion, with the proviso, however, that the issue of notes against securities might be increased from time to time to the extent of two-thirds of the amount of any lapsed country issue. In the return before us we see the result of nearly sixty years of the working of the Act. The notes issued stand at £51,831,835, and are secured by the Government Debt of £11,015,100 (as at the passing of the Act) and other securities amounting to £7,434,900 (against £2,984,900 in 1844), the balance being made up of gold coin and bullion, no silver being now held. We thus see that advantage has been taken of the lapsing of country bank issues to increase the issue against security by £4,450,000; but it must be remembered that the net profit on this additional issue against securities is credited to the public account. The actual amount of notes issued, as shown in the returns of 1844 and 1903 respectively, as shown on pages 32 and 33, has increased by the sum of £23,480,540; but if we compare what is called the “Active Circulation” now with that of 1844 we see that the increase is only £9,332,690. The Active Circulation is arrived at by deducting the amount of notes held by the Banking Department from the total of notes issued by the Issue Department, and it represents the notes actually in the hands of the public. This increase in the Active Circulation is a fluctuating one, but at any time it is totally out of proportion to the expansion of our trade and financial system which has taken place during the last fifty years. The comparative insignificance of the increase is explained by the fact that during the period under review our manner of effecting payments has changed so vastly, cheques having almost completely taken the place of notes in settling our various transactions, both in business and private affairs. The old idea that a note issue was of vital importance to the life of a bank, and that a mere bank of deposit could not be profitably and usefully conducted, was exploded in the early part of last century, as already explained. The new ideas which then began to prevail, and which led to the formation of our joint-stock banks, have expanded and developed in a manner that was probably not anticipated by the banking pioneers, who successfully assailed the Bank’s presumed monopoly of joint-stock banking. In such a manner have these new ideas and methods expanded, that the use of the bank-note has practically been done away with, except for special reasons and in certain cases.