In 1826,
the banking capital of Scotland was L4,900,000; in 1840, it was
about L10,000,000; yet with all this progress in industry and
wealth, the circulation of notes, which in 1825 varied from
L3,400,000 to L4,700,000, was in 1839 from L2,960,000 to
L3,670,000, and in the first three months of 1840, L2,940,000."

We are induced to dwell the more strongly upon these facts, because we
have strong suspicions that our opponents will endeavour to get at our
monetary system by raising the senseless cry of over-issue--senseless
at any time as a political maxim, it being the grossest fallacy to
maintain that an increased issue is the cause of national distress,
unless, indeed, it were possible to suppose that bankers were madmen
enough to dispense their paper without receiving a proper
equivalent--not only senseless, but positively nefarious, when the
clear broad fact stares them in the face, that Scotland has in fifteen
years thrown double the amount of capital into its banking
establishments, increased its productions in a threefold, and in some
cases a sevenfold ratio, augmented its population by nearly half a
million, (one-fifth part of the whole,) and yet kept its circulation
so low as to exhibit an actual decrease.

If we were called upon to state the cause of this certainly singular
fact, we should, without any hesitation, attribute it to the great
increase of the bank branches. The establishment of a branch in a
remote locality, has invariably, from the thrifty habits of the
Scottish people, absorbed all the paper which otherwise would have
been hoarded for a time, and left in the hands of the holders without
any interest. It would thus seem, from practice, that the doctrines of
the political economists upon this head are absolutely fallacious;
that the increase of banks, supposing these banks to issue paper and
to give interest on deposits, has a direct tendency to check
over-circulation, and in fact does partially supersede it.

With these facts before us, we consider that the measure of last
session, prohibiting any further issue of notes beyond those already
taken out by the banks, is almost a dead letter. We have not the least
fear, that under any circumstances there can be a call for a larger
circulation; at the same time, we demur to the policy which ties our
hands needlessly, and we object to all restriction where no case for
restriction has been shown. We look upon that measure as