6 BANKING THEORIES IN UNITED STATES
The full significance of their views was often hidden from the
writers themselves. Not merely did they frequently change their
opinions — the notions they held at any one time often embodied
clashing principles. Raguet furnishes a classic example; he was
at once one of the most suggestive and one of the most incon-
sistent of the men with whom we are concerned. A leading con-
tradiction, which was the rule rather than the exception (and it
was shared by English writers), was that involved in asserting
that banks can but distribute the purchasing power that they
receive from stockholders and depositors, while recognizing at the
same time that by expanding their loans banks can raise prices.
Again, after many writers observe the similarity between notes
and deposits as components of the currency, must we regard
their persistent reasoning in terms of notes alone, when discussing
prices and like problems, simply as a shorthand manner of ex-
pression, or as an illustration of the way in which man’s brain
works in water-tight compartments?
The work of several of the writers was marred by what seems
like studied combativeness. Raymond and H. C. Carey showed
this disposition in highest degree. One cannot escape the feeling
that they often opposed generally received views merely because
of the pressure of their pugnacious non-conformist instincts. The
general effect is much like that of the bitter personalities that
characterize the colonial tracts.
The relativity of economic theory to its institutional setting is
too familiar a matter to call for more than casual notice here.
Needless to say, illustrations of it abound in our study. The chief
differences between the characteristics of the American and the
English discussions were due to the different questions which
banking, as practised in each country, raised. American theory
in general did not dig so far below the surface because it was still
largely concerned with the relative utility and disutility of bank-
ing. In England the advantages of fairly orderly banking had
been too long enjoyed to make this a matter of much more than
academic interest. To turn to other examples, the thesis that
1 See Chapter VIII.
