THE NATURE OF BANK DEPOSITS 111 therefore, but consider the aggregate amount of credits payable on demand, standing on the books of the several banks, as being part of the currency of the United States.” ! H. C. Carey contended, with wearisome repetition, that bank deposits are, indeed, the troublesome part of the currency that banks issue. The quantity of bank notes in circulation, being dependent upon the wishes of the public, is relatively stable; it is the book credits of banks that work mischief with their wide variations in quantity.” And Carey criticized Peel’s Act of 1844 for overlooking the major cause of price disturbances.? There were many, on the other hand, who discussed fluctuations in prices, the necessity of keeping large reserves, regulation of banking, and like problems, with reference to bank notes only. In part this marked a failure to perceive that deposits are an element of the currency; in larger degree, it seems to have arisen from a misconception of the nature of bank deposits (whether they be included in the currency or not) — namely, from the tendency to regard them in all cases as credits for money actually brought to the bank. In England the inclusion of such items as bills of exchange in the currency had been urged by some writers, and the merits of the contention received some consideration in this country. Usu- ally the wide circulation of bills of exchange in Lancashire was cited, and the whole discussion was but a frank echo of the Eng- lish one. Professor Dew thought that it was an error, in discuss- ing the currency, to “lose sight of those other items, bills of ex- change, private promissory notes, bonds, stock, etc., which do, in fact, perform, though sluggishly, the functions of a circulating medium.” Their great volume more than offsets their sluggish t Gallatin, Considerations, etc. (1831), p. 31. Gallatin had reached the same conclusion in 1809. See Report to the Senate (March 3, 1809), American State Papers, Finance, ii, 351. * H. C. Carey, Past, Present, and Future (1848), pp. 187-204; Principles of Social Science (1838), ii, 392, 421; etc. Cp. Bank Notes and Specie (Anon., 1856), pp. 5, IO. * H. C. Carey, Past, Present, and Future, p. 180; Principles of Social Science, ii, 303.