Mr. Mill’s statement, that, if paper be not issued of as low a denomination as the lowest coin, “as much will remain as convenience requires for the smaller payments,” will not hold true. During our recent experiment of depreciated paper, the depreciation was such as to drive out the subsidiary silver coins, by July, 1862, and we were forced to supply their place by a fractional paper currency. By an amendment inserted June 17, 1862, into the act authorizing a second issue of $150,000,000 of greenbacks, it was ordered “that no note shall be issued for the fractional part of a dollar, and not more than $35,000,000 shall be of lower denominations than five dollars” (act, finally passed July 11, 1862). Although there were no fractional notes, yet one-dollar notes drove out subsidiary silver, simply because the paper had depreciated to a value below that of the 345.6 grains of silver in two halves or four quarters of a dollar. By July 2d the disappearance of small coin was distinctly noted. Let the value of gold be represented by 100; and a dollar of small silver coin (345.6 grains), relatively to a gold dollar, by 96. Now, if paper depreciates to 90, relatively to gold, it will drive out the subsidiary silver at 96, in accordance with Gresham’s law. Up to this point the effects of a paper currency are substantially the same, whether it is convertible into specie or not. It is when the metals have been completely superseded and driven from circulation that the difference between convertible and inconvertible paper begins to be operative. When the gold or silver has all gone from circulation, and an equal amount of paper has taken its place, suppose that a still further issue is superadded. The same series of phenomena recommences: prices rise, among the rest the prices of gold and silver articles, and it becomes an object, as before, to procure coin, in order to convert it into bullion. There is no longer any coin in circulation; but, if the paper currency is convertible, coin may still be obtained from the issuers in exchange for notes. All additional notes, therefore, which are attempted to be forced into circulation after the metals have been completely superseded, will return upon the issuers in exchange for coin; and they will not be able to maintain in circulation such a quantity of convertible paper as to sink its value below the metal which it represents. It is not so, however, with an inconvertible currency. To the increase of that (if permitted by law) there is no check. The issuers may add to it indefinitely, lowering its value and raising prices in proportion; they may, in other words, depreciate the currency without limit.