There is a very exaggerated idea in the mind of the public as to the amount of notes that are lost or destroyed, and never presented to the banks for redemption.

So far as the banks themselves are concerned, the amount is immaterial; they cannot profit by it in any way, except in so far as the notes form part of their general outstanding circulation. In case of the failure of a bank, the liquidator, at the end of three years, pays to the government an amount sufficient to redeem all outstanding notes; in this way the government eventually gets the benefit of any notes not presented for redemption.

Very few people can give instances within their personal knowledge of notes destroyed beyond recovery, either by fire or other agencies. When such accidents do occur the banks always stand prepared to consider a refund of the amount lost, provided satisfactory affidavits and bonds are submitted.

No bank is able to give any figures as to the amount of destroyed notes represented in its circulation; notes issued forty or fifty years ago are still being presented for payment.

A study of the course of redemption of the Sovereign Bank circulation is interesting. This bank failed at the beginning of 1908 with an outstanding circulation of $1,988,585; at the end of six years (January 1, 1914) there remained $23,520 unredeemed or only 1.18 per cent of the amount outstanding on January 1, 1908. On January 1, 1917, this amount had been further reduced to $15,270 or .61 per cent. During 1916 redemption averaged over $100 monthly. The outstanding balance consists entirely of fives and tens, all larger denominations having been redeemed.