Page:The Real Cause of the High Price of Gold Bullion.djvu/42

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issues to individuals, and never makes advances to Government but upon parliamentary securities.

4. Its advances to individuals is by discount on bills of short dates, which there is just reason to believe represent actual value and real commodities.

5. Its Notes being in themselves of no intrinsic value, and only of value in the act of parting with them, when not wanted for the purpose of circulation, are of course immediately withdrawn from it.

6. The Bank has tests to shew whether the quantity of circulating medium is too defective or too abundant.

For a numerous demand for the discount of good bills, is a test that money is scarce, and the market wants a fresh supply—whilst the paucity of demand, is a test that there is plenty of money in the market, and that discounts can be more easily and cheaply procured elsewhere than at the Bank: so also the cessation of demand from Government for advances upon parliamentary securities, is another proof that money is plentiful, and that Government can easily dispose of their securities in the market.

7. Whenever the return of Notes upon the Bank is greater than the demand for new issues.

8. The Bank has every possible inducement to prevent every excess of issue, for excess of issue, as it would depreciate their Paper, would also depreciate their profits proportionably, and would, ultimately, lead to the discredit, and by the discredit, to the extinction of the system.

Such are the guards by which the present system of currency is ensured from excess, which are formed on three principles—the private interest of the purchaser of the Notes not to call far any advance he is not obliged to demand—the private interest of the Bank not to compromise their institution, by an excess of