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POLITICAL  ECONOMY

the  promise  to  provide  an  article  serves
the  purpose  of  the  article.  The  promise  of
a  loaf  of  bread  will  not  satisfy  hunger,  but
the  promise  of  so  many  sovereigns  in  the
documentary  form  of  a  cheque  or  a  note  may
satisfy  the  requirements  of  people  as  completely ­
  as  sovereigns,  and  consequently  enable
exchanges  to  be  made.  It  is  essential,  of
course,  that  the  public  should  place  implicit
trust  in  those  who  make  the  promises,  that  is
in  the  persons  or  institutions  issuing  the  paper
money.  Were  such  undertakings  not  met
when  their  fulfilment  was  asked  for,  this
trust  would  be  destroyed.  Consequently  it  is
essential,  if  bank-notes  are  to  circulate  freely,
that  the  bankers  responsible  for  them  should
hold  such  reserves  of  bullion  that  nobody  who
wanted  a  note  changed  into  gold  would  find  his
request  refused.
How  much  these  reserves  should  be  at  any
given  time  it  is  not  easy  to  say,  but  bankers
know  from  their  experience  what  is  the  safe
limit  ;  and  it  is  possible  to  point  to  the
influences  whereby  the  normal  ratio  of  credit
money  to  standard  money  (that  is,  coins
of  the  money  commodity)  circulating  in  the
country  is  determined.  When  the  public
is  entirely  without  doubt  as  to  their  safety
in  accepting  paper  in  payment  of  debts,  paper