Each bank would thus put into circulation as many notes as it could, and as they would constantly be returned for redemption when not needed as money their volume would expand and contract with the needs of business.
It may be conceded that there is much truth in this view, but not the whole truth.

For, in reality, when bank notes are in common use, every one is compelled to take the money that is current.

This offers a constant temptation to the reckless and unscrupulous promotion of banking enterprises, as has been repeatedly shown (notably in America in the days of "wild-cat" banking before 1860).

The average citizen cannot know the credit of distant banks, and thus has not the same power of judging wisely in taking bank notes that he has even in making deposits in the bank of his own neighborhood.

Between bank notes and ordinary promissory notes there are other differences.