Why does Macbeth fear Banquo in Act 3 of Macbeth?

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Macbeth fears Banquo in act 3 of Macbeth because he has certain kingly qualities that make him a potential threat to Macbeth's throne. It's one thing to be king, but it is something else entirely to be safe as king. And so long as Banquo's around, Macbeth knows that he'll never be completely safe.

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In case we didn't know it already, Macbeth is a deeply insecure individual. Even though he's reached the pinnacle of his ambition by becoming king of Scotland, he still doesn't feel safe on the throne. Becoming ever more paranoid, he suspects just about everyone around him of harboring ambitions of their own, ambitions that involve deposing Macbeth from the Scottish throne.

In this regard, Macbeth is particularly afraid of Banquo. As he admits to himself, this is a man with “royalty of nature,” that is to say, something noble about him that makes him ideal king material.

Even though he's not a king, Banquo certainly acts like one, taking risks—“'Tis much he dares”—and constantly keeping his mind working—“[T]hat dauntless temper of his mind.” In addition to these kingly qualities, Banquo also has “wisdom that doth guide his valor / To act in safety.”

Given this rare combination of qualities, it's no wonder that Macbeth is so scared of Banquo. In fact, as he frankly admits, he fears no one but Banquo:

There is none but he

Whose being I do fear.
(act 3, scene 1, lines 56–57)

Even Macbeth's “genius,” his guardian angel, is scared of Banquo, just as Mark Antony's was by Caesar.

Mindful of the witches' prophecy, Macbeth knows that Banquo has been named father to a line of kings. Macbeth ruefully reflects that, if this prophecy turns out to be true, then he will have killed Duncan for the benefit of Banquo's sons and their descendants.

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In act 3, scene 1, Macbeth acknowledges that his "fears in Banquo / Stick deep." At this point, he lists several reasons to account for this fear. Firstly, he says that Banquo has a "royalty of nature," or in other words, something noble about him that makes Macbeth afraid. Banquo also has a "dauntless temper," meaning a willingness to take risks, and also "a wisdom that doth guide his valor." In summary, Macbeth is afraid that Banquo is intelligent enough and brave enough to expose and defeat him.

The first of Macbeth's reasons, that Banquo has something royal and noble about him, links back to a prophecy that the three witches made, namely that Banquo would one day be a "father to a line of kings." Macbeth is, therefore, afraid that all the risks he has taken, and all the immoral acts he has committed to become king, might all be for the ultimate benefit of Banquo and Banquo's sons. Macbeth is afraid that he is essentially damning his own soul more for Banquo's benefit, and more for Banquo's legacy, than for his own.

In act 3, scene 4, after Macbeth has had Banquo murdered, Banquo's ghost appears to Macbeth and the latter's fear increases. He starts to fear that all of his murders might have been for nothing, if "charnel houses and our graves must send / Those that we bury back." Up to this point, Macbeth has been secure in the knowledge that those he has murdered, and those that he is still to murder, have been and can be disposed of forever. Now he is faced with the possibility that the likes of King Duncan will not stay buried but may return to haunt him. Essentially, Macbeth here is afraid that his guilt cannot be buried. This is the terror that Banquo's ghost suggests to him.

Banquo's ghost also makes Macbeth afraid that he shall be punished. He says to Lady Macbeth that "blood will have blood" and that the dead will, from beyond the grave, expose "the secret'st man of blood." In other words, the dead will get their revenge, and the guilty, like Macbeth, will be exposed and brought to justice. When one realizes that these are the thoughts that scare Macbeth, it becomes clear that he has become a coward in a moral sense, afraid to face up to the consequences of his own actions.

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Macbeth has every reason to fear Banquo because Banquo represents an end to Macbeth's rise to power.  First of all, Banquo was with Macbeth when the witches delivered their prophecies.  In fact,  the witches reveal that Banquo's sons will be kings. Even though Macbeth is prophesied to be king himself, his children will not follow him in the reign; Banquo's will.  

The problem is that while the witches give prophecy, they do not reveal how the prophecies will come to be real.  Readers can infer that had Macbeth simply waited, he would have become king eventually.  However, his ambition would not allow for a wait, and Macbeth surges forth and kills Duncan.

Banquo knows that Duncan's death was suspicious.  He notes "Thou hast it now, King, Cawdor, Glamis, all, / As the weird women promised, and I fear, / Thou play'dst most foully for it: ..." (III,i).  Macbeth clues into Banquo's changed demeanor and realizes "... For Banquo's issue have I filed my mind; / For them the gracious Duncan have I murder'd; ..." (III, i).  

Macbeth feels he has no choice but to murder his friend in order to keep his throne.

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