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Especially it is necessary to notice that the requirement of freedom of bank activity in that
Time was entirely reduced to the requirement to resolve to commercial banks
To let out the banknotes denominated in uniform official national currency.
As far as I know, release possibility commercial banks of the various
Currencies it was never considered. It, of course, followed from representation,
According to which it is possible to use only the banknotes exchanged for gold
And silver. The banknotes which have been not provided with standard quantity of the precious
Metal, would seem simply absolutely useless.
The oldest lawful argument in favour of freedom of bank issue, however, has lost
Force while exchange of let out banknotes began to be carried out not on
Gold or silver, for which maintenance of a stock each separate issue
The bank bore full responsibility, and in units of "lawful means of payment",
Delivered exclusive the central bank of issue which was
Is actually obliged to provide a cash necessary for repayment of banknotes,
Let out by private banks of issue. Occurrence such is perfect
Defective system was it is prevented (at least, regarding issue of banknotes,
But not check deposits) by an interdiction of issue of private banknotes.
The requirement of free bank activity (that is free issue
Banknotes) was based, generally, that banks could thanking
To it to give more extensive and cheap credits. For the same reason
Against it those who understood acted that inflation, though, on will be result
To the smaller measure, one defender of free issue of banknotes defended it on other
To the reason: "... That is called as free bank activity, will lead
To full withdrawal from the reference of banknotes in France. I wish to grant to everyone the right
To let out banknotes that nobody has wanted to accept more than any banknotes"
Action, William Hodge, Edinburgh, 1949; Henry Regnery, Chicago, 1966, the river 446;
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