The use of a bank, then, is not only to take care of people's money, but to give them something for the use of it. It would, no doubt, seem natural when society was not so respectful to the laws of the country, and people were not characterised by such a high degree of honesty and integrity, that capitalists were glad to have their gains safely taken care of by persons who had iron safes and strong rooms built for the express purpose, and perhaps, in some cases, were not unwilling to pay for the secure custody. Neither the Bank of England nor the Bank of France allows interest for deposits.

In the most enlightened seats of commerce money fluctuates in price like any other article that is in general use, that is influenced by the laws of supply and demand, and those who have any of it can obtain a price according to the market rate. Banks are the institutions which buy and sell money, and, like corn, or iron, or coal merchants, know the current rate when you apply to them. If you wish to leave money with them, they give you a higher or lower rate of interest per cent. according to circumstances. As a rule, more is allowed for long periods of fixed deposit than short. There are, however, many different circumstances which influence the price of money, and there are always agencies at work which tend to raise or lower it. The use of banks is to go hand in hand with commerce. They take the money of those who do not know how to employ it, and lend it to those who do, to the advantage of all three classes, and so what before remained idle is now made profitable. Like a thousand little rivulets which run into one mighty stream, and float the commercial navy of England from London, Liverpool, etc, to the sea and distant climes, the small depositors make one mighty sum, that can be employed in agriculture, railways, and a hundred different enterprises by which all classes are benefited, and the poor man can approach nearer to the privileges enjoyed by the rich. The profession of a banker, then, is to employ the money of other people, to the advantage of those more immediately interested, and for the benefit of the community generally.

The next great function of a bank, after properly utilising the metallic currency of a country, is to provide a cheaper and more agreeable form of currency in the shape of bank notes. The great power for good or for evil which is placed in the hands of banks by allowing them a paper issue, demonstrates the necessity of some impartial supervision, and we naturally look to the State-as the highest in authority, and therefore carrying the greatest weight, both moral and physical-to control the amount of paper currency which may be put in circulation by banks. Mr. Ricardo says, p. 214, "After the establishment of banks, the State has not the sole power of coining or issuing money. The currency may as effectually be increased by paper as by coin; so that if a State were to debase its money and limit its quantity, it could not support its value, because the banks would have an equal power of adding to the whole quantity of circulation." Again, farther on, Mr. Ricardo's opinion of the importance of banks as regards their office as paper-issuers to the public is conveyed in the following paragraph:-" A currency is in its most perfect state when it consists wholly of paper money, but of paper money of an equal value with the gold which it professes to represent. The use of paper instead of gold substitutes the cheapest in place of the most expensive medium, and enables the country, without loss to any individual, to exchange all the gold which it before used for this purpose for raw materials, utensils, and food, by the use of which both its wealth and its enjoyments are increased." Whether he would still have entertained this extreme opinion after he had seen Germany, the Scandinavian, and other kingdoms substituting the precious metals for paper money, which had long been in use, we will not venture to predict; but it is evident, whether from motives of pride or any other, that paper money for small sums is going out of use in those countries which can afford to put metal in circulation instead. If illicit coining could only be prevented, there is no doubt that the fall in the value of silver would enable that metal to be universally used as token money, not only on account of its being much more convenient than any form of paper, but because it is more pleasant to the eye and the touch, and when spurious is more easily detected by the public. There are many who object to the State having anything to do with controlling the operation of banks or their paper issues; but it must be borne in mind that there is a wide difference between the State being the issuer and the State controlling the issues of others. The State is the highest power that exercises control over public affairs, and is the motive power-so to speak-of the empire, acting in obedience to the people's will. It is, therefore, reasonable to suppose that the Government, who are furnished with every assistance in the shape of legal advice, etc, should be the most competent power to control the operations of those institutions which are intrusted to an unlimited extent by the people.

Mr. M'Culloch, in his 'Commercial Dictionary,' p. 67, in speaking of the "necessity of insuring the conversion of bank-notes into coin," says, " The taking of measures to insure the convertibility of bank-notes into coin is a matter which cannot be safely left to the discretion or judgment of individuals, but which must be settled by Government. No bank-notes should be permitted to circulate about the equivalency of which to the coins they profess to represent there can be the smallest room for doubt. It is alleged, indeed, that in this, as in most other things, we may safely trust to the prudence and sagacity of those who deal with banks; and that, if left to themselves, the public will very rarely be deceived. But the widest experience shows that but little if any dependence can be placed on this doctrine. The public is very apt to be misled, in the first instance, in giving confidence to or taking the paper of individuals or associations; and though that were not the case, the condition of an individual or company may change, from bad or expensive management, improvident speculation, unavoidable losses, and fifty other things of which the public know nothing, or nothing certain. The fact that any particular banker who issues paper enjoys the public confidence is at best a presumption merely, and no proof that he really deserves it. There have unfortunately been innumerable instances in which it has turned out that bankers who have long been in the highest credit, and whose notes had been unhesitatingly accepted by the public, have been found to be, on the occurrence of anything to excite suspicion, quite unable to meet their engagements." From a report on the ' Extension of the Privilege of the Bank of France,' in 1840, we find the following:-" Le droit d'emettre des billets est tres avantageux; mais aussi il est si dangereux que l'Etat doit ou s'en reserver Pexercice ou le regler de maniere a en prevenir les abus." Mr. Ricardo, at p. 408, remarks, "But if the public require protection against the inferior money which might be imposed upon them by an undue mixture of alloy, and which is obtained by means of the Government stamp when metallic money is used, how much more necessary is such protection when paper money forms the whole, or almost the whole, of the circulating medium of the country ? Is it not inconsistent that Government should use its power to protect the community from the loss of one shilling in a guinea, but does not interfere to protect them from the loss of the whole twenty shillings in a one-pound note? In the case of the Bank of England notes, a guarantee is taken by the Government for the notes which the bank issues, and the whole capital of the bank, amounting to more than eleven and a half millions, must be lost before the holders of their notes can be sufferers from any imprudence they may commit," etc. etc. And again, "Though I am by no means disposed to judge uncharitably of those who have occasioned so much ruin and distress to the middle and lower classes of the people, yet it must be allowed by the most indulgent, that the true business of banking must be very much abused before it can be necessary for any bank possessing the most moderate funds, to fail in their engagements; and I believe it will be found, in by far the major part of these failures, that the parties can be charged with offences much more grave than those of mere imprudence and want of caution." M. J. B. Say also agrees that the interference of Government is justifiable in two cases-first, to prevent fraud, and secondly, to certify a fact. ('Economie Politique,' Book I, chap. xvii.-See also Sir I. B. Byles on the 'Law of Bills of Exchange,' etc, Preface, p. xi.)