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so superficial critics jump to the conclusion post hoc ergo propter hoc. Nothing could be more mistaken. Even quite apart from the proceedings of the central bank-of-issue, the private banks and others who issue money have to adjust their interest policy to the rate of interest ruling in the world market. Sums could be withdrawn from them for the purposes of interest arbitrage, just as from the central bank. In fact, so long as the mobility of capital is not restricted it remains impossible for the credit-issuing banks of any single country to follow an independent credit policy.

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[1] [Some of the problems that have arisen since are referred to on pp. 14-22 H.E.B.]

[2] [See editor's Introduction, p. 13, above. H.E.B.]

[3] See Torrens, The Principles and Practical Operation of Sir Robert Peel's Act of 1844 Explained and Defended, 2d ed. (London, 1857), pp. 8 ff.

[4] See Tooke, An Inquiry into the Currency Principle (London, 1844), pp. 23 ff.

[5] See Wagner, "Banknote," in Rentzsch, Handwörterbuch der Volkswirtschaftslehre (Leipzig, 1866), p. 91.

[6] See Wagner, "Kredit," ibid., p. 201.

[7] See Schumacher's criticism of this contradiction, Weltwirtschaftliche Studien (Leipzig, 1911), pp. 62 ff.

[8] See Cannon, Clearinghouses: Their History, Methods and Administration (New York, 1900), pp. 79 ff.

[9] The Federal Reserve Act has since provided the United States with a basis for issuing notes in order to allay a panic.

[10] See Sartorious von Waltershausen, Das volkswirtschaftliche System der Kapitalanlage im Auslande (Berlin, 1907), pp. 126 ff.

[11] [See p. 13 above. H.E.B.]

[12] See Rosendorff, "Die Goldprämienpolitik der Banque de France und ihre deutschen Lobredner," Jahrbücher für Nationalökonomie und Statistik 21 (191): 632 ff.; Dunbar, Chapters on the Theory and History of Banking, 2d ed. (New York, 1907), pp. 147 ff.

[13] See Kaufmann, Das französische Bankwesen (Tübingen, 1911), pp. 35 ff.

[14] On this, see Rosendorff, op. cit., pp. 640 ff., and passages cited in the essay "Die neue Richtung in der Goldpolitik der Bank von Frankreich," Bank-Archiv. 7 (1907): (72) ff., taken from the statements of account of the Bank of France, in which the raising of the discount rate is spoken of as the "seul moyen connu de défendre l'encaisse."

[15] See Landesberger, Währungssystem und Relation (Vienna, 1891), p. 104.

[16] Ibid., p. 105, and Über die Goldprämienpolitik der Zettelbanken (Vienna, 1892), p. 28.

[17] Even at the time when the thaler was still unlimited legal tender and so occupied position analogous to that of the French five-franc piece, the German Reichsbank never followed a gold-premium policy on the French pattern, although it was often advised to do so. This is probably to be ascribed not so much to the circumstance that the number of thalers was relatively small as to the influence of Bamberger's ideas throughout the Reich. An open break with the principles of the banking and currency reform of the period after 1870-71 was, in view of the prevailing opinion, out of the question.

[18] See Koch, Der Londoner Goldverkehr (Stuttgart, 1905), p. 708.

[19] Ibid., pp. 81 f.

[20] See Clare, A Money Market Primer and Key to the Exchanges, 2d ed. (London, 1893), p. 22.

[21] Rosendorff ("Die Goldprämienpolitik der Banque de France," p. 636) would appear to be mistaken in thinking it possible to detect a difference of principle between the procedure of the Bank of England and the Reichsbank in paying out gold and the gold-premium policy of the Bank of France. He bases his view on the argument that, whereas the latter refuses altogether to pay out French gold coins and is thus theoretically able to raise the amount of the premium indefinitely, the Bank of England and the Reichsbank, which in contrast to the Bank of France always redeem their notes at their full value in current gold coin and have never attempted to refuse to pay out gold, are able to raise the selling price of bullion only by the amount of the cost of minting and an allowance for wear and tear. Rosendorff, in arguing from the