It was this 'routine' that caused their moderation.

They believed that so long as they issued 'notes' only at 5 per cent, and only on the discount of good bills, those notes could not be depreciated.

And as the number of 'good' bills--bills which sound merchants know to be good--does not rapidly increase, and as the market rate of interest was often less than 5 per cent, these checks on over-issue were very effective.

They failed in time, and the theory upon which they were defended was nonsense; but for a time their operation was powerful and excellent.
Unluckily, in the management of the matter before us--the management of the Bank reserve--the directors of the Bank of England were neither acquainted with right principles, nor were they protected by a judicious routine.

They could not be expected themselves to discover such principles.