Issued on bullion £12,000,000 ” at 1 per cent. 11,000,000 ” at 2 per cent. 11,000,000 ” at 4 per cent. 2,000,000 ---------- £36,000,000 the efflux of £12,000,000 of bullion having raised the rate of interest from 4 to suppose 6 or 6½ per cent., and having reduced the total issues of bullion notes and unrepresented notes from £39,000,000 to £36,000,000; that is, by £3,000,000 out of £39,000,000. Now, in order to convey an adequate conception of the advantages derived from such a plan as this, we must contrast it more closely with the operation of the present system in a similar case. We will suppose, therefore, that a drain of £12,000,000 of bullion commences under the present system, at a time when the bullion notes and unrepresented notes of the Bank are both about their ordinary average, viz. £14,000,000 and £8,000,000 respectively, making a total of £22,000,000. Now, bearing in mind that the reserve of unrepresented notes can never practically be reduced below £2,000,000, it will be at once apparent that a drain of £12,000,000 in such a case would produce the following change:-- Issued on gold £2,000,000 ” on securities 12,000,000 ---------- £14,000,000 thereby effecting a reduction in the total circulation of the Bank of £8,000,000 out of £22,000,000, while raising the rate of discount in some fabulous proportion in order to keep down the demand for accommodation, and at the same time placing in imminent jeopardy the convertibility of the issues, if not the solvency of the Bank.