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 dividends; but it does not appear that these arguments had any effect on public opinion. He also laid down the doctrine, which may be called the kernel of the "credit system," which was made the subject of so much debate and eloquence in the next fifty years,—namely: that banks help honest, industrious, and enterprising men by furnishing them the capital, which is the only thing they need to become very efficient producers, and that they help the same class of men's when they have met with misfortune, to recover. As to the abundance or lack of the precious metals, that seems to him to depend on the balance of trade; and he is quite sure that each state ought to have a supply of "the money of the world," and of the metals which are a "species of the most effective wealth." "Notwithstanding some hypotheses to the contrary, there are many things to induce a suspicion that the precious metals will not abound in any country which has not mines or variety of manufactures."

He condemns State issues. "Though paper emissions under a general authority [i.e., federal] might have some advantages not applicable, and be free from some disadvantages which are applicable, to the like emissions by the States separately, yet they are of a nature so liable to abuse, and, it may even be affirmed, so certain of being abused, that the wisdom of the government will be shown in never trusting itself with the use of so seducing and dangerous an expedient." He next points out the exact difficulty and danger of such issues, although at the same time his argument exposes the fallacy of the doctrine which he had just stated, that banks could increase the amount of circulating medium. "Among other material differences between the paper currency issued by the mere authority of government and one issued by a bank payable in coin is this: that in the first case there is no standard to which an appeal can be made as to the quantity which will only satisfy, or which will surcharge the circulation; in the last, that standard results from the demand. If more should be issued than is necessary, it will return upon the bank."

That is so, how can a bank "enhance the quantity of circulating money?" If his reasoning is correct, (and it is that which is accepted by all the best authorities), it is far more certain that there can be no deficiency below the "standard" set by the "demand;" for it would be satisfied by obtaining specie. In short, the reasoning, in order to be thrown into correct and productive order, must begin with and proceed from the notion of the requirement as the predominant and coordinating conception.

We are not without a verdict of history upon these notions of Hamilton about bank currency. The keynote of his doctrine, and the keynote of the banking system of the next fifty years is in the following passage: "Gold and silver, when they are employed merely as the instruments of exchange and alienation, have been, not improperly, denominated dead stock; but when deposited in banks to become the basis of a paper circulation, which takes their character and place as the signs or representatives of value, they then acquire life, or in other words, an active and productive quality. "The