Another banker, it will be said, may take up the Government account.  He may advance, as is so often done in other bank failures, what the Government needs for the moment in order to secure the Government account in future.  But the imperfection of this remedy is that it fails in the very worst case.  In a panic, and at a general collapse of credit, no such banker will probably be found.  The old banker who possesses the Government deposit cannot repay it, and no banker not having that deposit will, at a bad crisis, be able to find the 5,000,000 L. or 6,000,000 L. which the quarter day of a Government such as ours requires.  If a finance Minister, having entrusted his money to a bank, begins to act strictly, and say he will in all cases let the Money Market take care of itself, the reply is that in one case the Money Market will take care of him too, and he will be insolvent.

In the infancy of Banking it is probably much better that a Government should as a rule keep its own money.  If there are not Banks in which it can place secure reliance, it should not seem to rely upon them.  Still less should it give peculiar favour to any one, and by entrusting it with the Government account secure to it a mischievous supremacy above all other banks.  The skill of a financier in such an age is to equalise the receipt of taxation, and the outgoing of expenditure; it should be a principal care with him to make sure that more should not be locked up at a particular moment in the Government coffers than is usually locked up there.  If the amount of dead capital so buried in the Treasury does not at any time much exceed the common average, the evil so caused is inconsiderable:  it is only the loss of interest on a certain sum of money, which would not be much of a burden on the whole nation; the additional taxation it would cause would be inconsiderable.  Such an evil is nothing in comparison with that of losing the money necessary for inevitable expence by entrusting it to a bad Bank, or that of recovering this money by identifying the national credit with the bad Bank and so propping it up and perpetuating it.  So long as the security of the Money Market is not entirely to be relied on, the Goverment of a country had much better leave it to itself and keep its own money.  If the banks are bad, they will certainly continue bad and will probably become worse if the Government sustains and encourages them.  The cardinal maxim is, that any aid to a present bad Bank is the surest mode of preventing the establishment of a future good Bank.

When the trade of Banking began to be better understood, when the Banking system was thoroughly secure, the Government might begin to lend gradually; especially to lend the unusually large sums which even under the most equable system of finance will at times accumulate in the public exchequer.

Under a natural system of banking it would have every facility.  Where there were many banks keeping their own reserve, and each most anxious to keep a sufficient reserve, because its own life and credit depended on it, the risk of the Government in keeping a banker would be reduced to a minimum.  It would have the choice of many bankers, and would not be restricted to any one.