Small Notes

in the absence of any usury law, might be drawn into bank in a crisis. At the same time, this restriction goes far to make convertibility genuine. Convertibility in the currency is like conscientiousness in a man—it has many grades, and is valuable in proportion as it is strict and pure. The prohibition of small notes does more than any other arbitrary rule to ensure convertibility. It also secures to the poor the use of a value currency for their exchanges, and to the whole community the same currency for the exchanges which are made for consumption. These principles were recognized in England in 1827,* when the notes under ^5 were abolished, and President Jackson's administration sought to put them in operation here. The Scotch banks still issue £1 and £2 notes, but they manage them, very conservatively, and their example furnishes no argument. They seem to be such sagacious bankers as to need no limitations ; therefore they do not need this one ; but when limitations are needed, this is the simplest and most efficacious.

Such were the movements up to 1835, to * See page 302.