e one. At
the adoption of the last charter of the bank (1844) the Government
allowed the country banks to maintain from that time forward the
circulation then outstanding, which was not to be increased; and as fast
as the banks failed or were wound up voluntarily, their circulation was
retired and the vacuum became filled by the notes of the Bank of
England. The latter was forbidden by its new charter to exceed certain
prescribed limits in its issues. They could issue to the amount of their
capital, L14,000,000, and beyond that to the extent of gold in the
vaults. Thus the bank circulation of England, Scotland, and Ireland is
less now than in 1844, when the new principle was established, viz.:

BANK CIRCULATION.

Bank of England. Country Banks. Ireland. Scotland. TOTAL.

1844, L22,015,000 L7,797,000 L7,716,000 L3,804,000 L41,325,000
1862, 20,190,000 5,680,000 5,519,000 4,053,000 35,442,000

Had this principle been adopted in the United States at the same
period, the excesses and extravagance of 1856-'7 might have been
obviated, as well as the revulsion of the latter year, and the distress
which followed.

Let us recur to the eventful history of the bank. Although a private
institution, owned and controlled by private capital, its large profits
accruing for the benefit of its own shareholders, yet it became so
closely interwoven with the commerce, manufactures, trade, and the
public finances of the nation, that it may be considered as in reality a
national institution. At its inception its whole capital was swallowed
by the treasury. This was a part of the contract of charter. Its
subsequent accumulations of capital, from L1,200,000, have likewise been
absorbed by the Government, until now the bank reports the Government
debt to them to be L11,015,100, and the Government securities held, to
be L11,064,000. Without the aid of the bank, the national treasury could
not, probably, have made the enormous disbursements which were actually
made between the commencement of the American Revolution in 1776, and
the termination of the continental war of 1815. The bank here furnished,
almost alone, 'the sinews of war.'

During this eventful period there were large numbers of provincial banks
of issue created in England and Ireland. These were managed mainly with
a view to private profit, while the public interests have suffered
severely from the frequent expansions and contractions of the volum