But there is another principle, not hitherto propounded, to which such a system, as well as that at present in existence, would be just as forcibly opposed as to those which have already been advanced. For if it is clearly demonstrable, that the issue of paper money should be a function of the State, and should be exercised exclusively with a view to public interests, it is no less rigidly deducible from the best established data of monetary science, and no less agreeable to the spontaneous conclusions of common sense, that there should only be a single bank of issue. If no other reason for this could be adduced, save that already intimated, viz. that the existence of various descriptions of paper money has the direct tendency to lead to forgeries, this consideration alone would have sufficient weight to prove our proposition. But indeed its truth has long been fully proved on other grounds. It is a well known fact, that in the course of trade there are certain periods when it is desirable that the currency should expand to meet unusual requirements, and certain other periods when it should contract, in order to prevent undue speculation. The former case in general presents but little difficulty. At such times the rate of interest is usually high; and as it is for the pecuniary advantage of the banks of issue to enlarge their circulation as much as possible, the desire to increase their profits will induce them to extend their issues to the highest limits. In this case, therefore, the operation of a plurality of issuing banks may not be injurious. But in the opposite circumstances, when it is expedient that the circulation should contract, the effect is precisely the reverse. During such periods the rate of interest is generally low, and the profits made by the banks proportionally small; so that it is only by retaining as large a number of notes as they possibly can in circulation, that the banks of issue can obtain their ordinary amount of profits. Whenever a contingency of this sort arises, the momentary advantage of the banks of issue, and the permanent interests of the community at large, are brought into direct collision. For should some of the issuing banks postpone their own advantage to that of the public, and contract their issues, there will always be found some other banks, which, instead of following their example, will embrace so favourable an opportunity of enlarging their transactions at the expense of their more conscientious rivals, and fill up the vacancy by an increased issue of their own notes. And the ultimate effect of this course, is to compel the former, in self defence, to again expand their issues in order to retain their customers, who would otherwise transfer their accounts to the bank which would make the largest advances at the lowest rate of interest. Thus the existence of a plurality of issuers has the inevitable tendency to throw obstacles in the way of a contraction of the