But this system is nearly the opposite to that which the law and
circumstances have created for us in England. The English
Government, far from keeping cash from the money market till the
position of that market was reasonably secure, at a very early
moment, and while credit of all kinds was most insecure, for its own
interests entered into the Money Market. In order to effect loans
better, it gave the custody and profit of its own money (along with
other privileges) to a single bank, and therefore practically and in
fact it is identified with the Bank of this hour. It cannot let the
money market take care of itself because it has deposited much money
in that market, and it cannot pay its way if it loses that money.

Nor would any English statesman propose to 'wind up' the Bank of
England. A theorist might put such a suggestion on paper, but no
responsible government would think of it. At the worst crisis and in
the worst misconduct of the Bank, no such plea has been thought of:
in 1825 when its till was empty, in 1837 when it had to ask aid from
the Bank of France, no such idea was suggested. By irresistible
tradition the English Government was obliged to deposit its money in
the money market and to deposit with this particular Bank.

And this system has plain and grave evils.

1st. Because being created by state aid, it is more likely than a
natural system to require state help.

2ndly. Because, being a one-reserve system, it reduces the spare
cash of the Money Market to a smaller amount than any other system,
and so makes that market more delicate. There being a less hoard to