currency, at periods when the peculiar circumstances of the country, may render such contraction a measure absolutely necessary for the public welfare. In applying this principle to the case of the existing system, it will be seen that the limitation of the country issues to little more than one half the authorized unrepresented issues of the Bank of England, has greatly minimized the evils that would otherwise result from the existence of so great a multitude of issuers. At the same time, by throwing the whole responsibility of the management of the circulation upon the Bank of England, it has practically conferred a very undue advantage on the country banks. And on the other hand, it has confessedly provided no machinery for producing a uniform contraction of the issues, when desirable, in any districts, save the metropolitan, and those where only Bank of England notes circulate. In every other part of England and Wales, it lies completely within the power of some one or two of the local banks to prevent the circulation from contracting, no matter how essential may be such contraction to the general prosperity of the district. The natural inference to which the preceding data directly lead, is, that either a State Bank should be formed for the issue of treasury notes, or that the privilege of issue should be exclusively confined to some one of the existing banks of issue. It may easily be shown that no insuperable obstacles exist to prevent the establishment of a State Bank. The only practical difficulty would arise out of the necessity of paying off the eleven millions due to the Bank of England; and this could readily be effected either by a direct sale of the debt, or by the contraction of a new loan for the same amount, neither of which operations need entail any considerable expense, present or prospective. The management of the issues would demand no greater degree of care than those of the Bank of England. A sufficient portion of the notes issued might be retained for the payment of the dividends, and for making any other necessary disbursements on account of Government; and the remainder might be loaned at their market value to such banks as might have valid securities to offer in exchange; but no advances should be made to private individuals, or in any way that would interfere with the ordinary business of the banks of deposit and discount. The amount of profit that would be derived from the notes advanced to the banks, would necessarily depend on both the number of the notes and the rate at which they were loaned; but there can be little doubt, that if the present issues of England and Wales were entirely replaced, the nett profit would not be less than half a million sterling.