192 ECONOMIC PRINCIPLES
become general. Thus the question becomes less one of
danger from a possible stimulation of price-inflation, than
one of convenience, especially in dealing with seasonal
fluctuations in the need for exchange media. The prolonged
circulation of paper currency, issued to meet a seasonal need,
must be guarded against; and a requirement for constant
redemption, and redemption at places not remote from the
localities in which the notes circulate, is the means employed
to ensure the retirement of notes issued at the discretion of
a banker.
A question arises as to the relative advantages of issue by
bankers and by Government, and, if by bankers, whether by
one or by many. The consideration, that the close contact
with the business for which the notes are needed, which
comes about in the ordinary course of business of a bank of
commerce, affords the surest available guidance as to the
quantity of notes needed, and the surest guarantee that the
notes, when no longer needed, will return to the issuer, is
decisive. As a lender of credit, the banker can judge of
the purposes to which the credit he supplies in the form
of notes is likely to be applied, and whether it is sound
business to grant it. As a receiver of deposits, the banker
finds the notes, issued by himself or others, returning to his
hands when they are no longer needed in circulation. If the
notes be issued by Government, bankers may hold them,
when thus returned, as reserve, and the Government authorities
 will be less able than bankers to gauge the amount of
reserve needed to meet demands for redemption, when
bankers or others find that their purposes are no longer as
well served by the holding of the Government notes as
by their equivalent in coin. In the issue, too, the lack of
intimate contact between Government offices and business
interests and conditions almost compels the adoption of
mechanical rules, to govern the amount of issues, and thus
prevents the requisite close adaptation to the needs of trade.
When the issue is entrusted to a single bank, there is a
considerable risk that the policy of the bank may be influenced
 rather by political exigencies than by commerical
requirements. In some cases. the bank which is accorded