PAPER CURRENCY 183

The fact of non-redeemability in coin does not, of itself,
imply depreciation, but the removal of the check which the
necessity of redemption imposes on excessive issues involves
a danger. In practice, the power of issue has been, sooner
or later, abused wherever it has not been restrained by the
obligation of current redemption. Prices, as expressed in
the paper currency, have risen. In some cases the rise has
been violent and irregular, The French assignats were
depreciated, before they were withdrawn, to such an extent
that a thousand francs in paper were needed to purchase
what a single franc in coin would have bought. Innocent
holders of such currency suffered loss. The poorest of the
people, because their ignorance deprived them of the
knowledge which might have warded off the worst of the
effects of the depreciation, suffered most. Though less in
degree, the depreciation of irredeemable paper, in other
countries which have tried it, has had similar evil results.
The recognition of the unsoundness of such a currency has
led to its general abandonment, though the re-establishment
of redemption has necessarily involved serious difficulties,
and some inequity. In Spain the convenience of a resort to
issues of this character has been once more recently illustrated.
 In South America the obstacles to resumption of
specie payments are illustrated in the struggles of some of
the nations of that continent to get their currencies back to
a metallic basis,
In regard to redeemable paper currency, the point of
importance is to determine what regulations, if any, shall
be imposed on issuers in order to compel the provision of
ample funds for redemption. Provided that redemption is
maintained, over-issue need not be feared, for all notes not
required for circulation will be returned to the issuers and
retired. Yet a limit of issue may be judged advisable, as a
safeguard against excessive confidence, and a mistaken
judgment on the subject of reserves. If the issues are made
by banks, and several banks are empowered to circulate
notes in the same district, a limitation of the privilege of
each issuer may be necessary, to prevent the adoption of
undesirable means, on the part of some issuers, to secure an