rdingly, the Scottish
bankers have arranged amongst themselves a mutual system of exchange,
as stringent as if it had the force of statute, by means of which an
over-issue of notes becomes a matter of perfect impossibility. _Twice
in every week the whole notes deposited with the different bank
offices in Scotland are regularly interchanged._ Now, with this system
in operation, it is perfectly ludicrous to suppose that any bank would
issue its paper rashly for the sake of an extended circulation. _The
whole notes_ in circulation throughout Scotland return to their
respective banks in a period averaging from ten to eleven days in
urban, and from a fortnight to three weeks in rural districts. In
consequence of the rate of interest allowed by the banks, no person
has any inducement to keep bank paper by him, but the reverse, and the
general practice of the country is to keep the circulation at as low a
rate as possible. The numerous branch banks which are situated up and
down the country, are the means of taking the notes of their
neighbours out of the circle as speedily as possible. In this way it
is not possible for the circulation to be more than what is absolutely
necessary for the transactions of the country.

If, therefore, any bank had been so rash as to grant accommodation
without proper security, merely for the sake of obtaining a
circulation, in ten days, or a fortnight at the furthest, it is
compelled to account with the other banks for every note they have
received. If it does not hold enough of their paper to redeem its own
upon exchange, it is compelled to pay the difference in exchequer
bills, a certain amount of which every bank is bound by mutual
agreement to hold, the fractional parts of each thousand pounds being
payable in Bank of England notes or in gold. In this way over-trading,
in so far as regards the issue of paper, is so effectually guarded and
controlled, that it would puzzle Parliament, with all its conceded
conventional wisdom, to devise any plan alike so simple and
expeditious.

The amount of notes at present in circulation throughout Scotland is
estimated at three millions, or at the very utmost three millions and
a half. At certain times of the year, such as the great legal terms of
Whitsunday and Martinmas, when money is universally paid over and
received, there is, of course, a corresponding increase of issue for
the moment which demands an extra supply of notes. It is never
considered