The Bank of France keeps the money of the State, and the State appoints its governor. But to this there are several objections, some arising from the general nature of the banking trade, and others from the special position of the Bank of England. They believed that so long as they issued ‘notes’ only at 5 per cent, and only on the discount of good bills, those notes could not be depreciated. , the model instance of all evil in business, is a most alarming example of this evil. Further inquiry, however, soon convinced me that they had not the power. All the precautions of the Bank take time to operate. The danger may indeed be surmounted by the continual infusion of new and able partners. The fever of excitement which passed over the nation was strongest in the classes to whom banks lent most, and consequently the losses of even the most careful banks (save of those in rural and sheltered situations) were probably greater than usual. If there were a new issue to such an amount as that contemplated–viz. If, for example, the premium did not last more than three months, it would add to the profits of a temporary deposit of funds for that period as much as an addition of 3 per cent to the discount rate; or, to put it the other way round, there would need to be an additional profit of 3 per cent elsewhere if it were to be worth while to send funds abroad. But we should be making rather a random guess if we were to attempt to say how many. The Parliamentary Under-Secretary–the Deputy-Governor, so to speak, of that office–changes nearly as often. In Austria–Hungary, for example, after the currency reform of 1892, attempts were made to force gold into circulation just as they were in India. Some authorities thought that notes of small denominations (Rs. But any conclusion as to the possible magnitude of the adverse balance at which one can arrive on the basis of them is little better than a guess. But the effect of this is to throw additional business on the Bank of England. Such years alter altogether an important part of the mercantile world: the final question of bill-brokers, ‘which bills will be paid and which will not? which bills are second-rate and which first-rate?’ would be answered very differently at the beginning of the year and at the end. But this policy had no effect, except that of exciting a distrust of ‘Overends’: the credit of the Bank of England was not diminished; Overends had to return the money in a few days, and had the dissatisfaction of feeling that they had in vain attempted to assail the solid basis of everyone’s credit, and that everyone disliked them for doing so. But the effects of the change have been very remarkable. For the first forty years of their existence the Government notes, though always of growing importance, took a very minor place in the currency system of the country. If we refer to history, and examine what in fact has been the conduct of the Bank directors, we find that they have acted exactly as persons of their type, character, and position might have been expected to act.