PAPER CURRENCY 191

due to the restriction of issues, were so great, that the renewal
of the charter of the Imperial Bank, in 1899, was made the
occasion for a substantial increase of the fiduciary issue. In
the United States, the resort to notes issued on a deposit of
silver may be traced in part to the inconvenience of a too
inelastic system of issues on other bases. In England itself,
at times of severe financial strain, when the collapse of the
usual credit machinery threw upon the notes of the Bank of
England much of the exchange work ordinarily performed
by other means, the limitation of fiduciary issue, as prescribed
in the Bank Act, has been abandoned, this being the only
available means for promptly remedying the difficulties of
the situation.
It can, indeed, hardly be claimed that the yield of precious
 metal from the mines is an ideal measure of what can
safely be added to the currencies of the world, or of what is
required to be added to them. It is claimed, however, and
with a good deal of justice, that the judgments of men on the
subject of what addition is proper, are likely to be prejudiced
by the advantages which may accrue to special interests
from increase of issues, and that it is safer to restrict issues
by an illogical limitation than to leave them unrestricted
®xcept by the fallible judgment of issuers. Repeated
experience of depreciation through over-issue justifies such a
view, and hence all are agreed that the apparent advantages
offered by a purely paper currency must be sacrificed to the
extent that insistence on adequate provision for redemption,
and a regular practice of redemption, require. If this be
thoroughly secured, the temptation to issue freely in times of
expanding credit will be guarded against, by the need for
making provision to redeem the notes, in such bulk, and
with such promptitude, as may be necessary, when the time
of expanding credit gives place to one of contracting credit.
Thus the stimulation of an inflation of prices by free expansion
 of note-issues will be checked or avoided. In countries
most liable to violent fluctuations of credit, the use of notes,
as a means of supporting the expansion of such credit, is
becoming of subordinate importance, as modern methods of
employing bank deposits to afford a means of payment