22 BANKING THEORIES IN UNITED STATES 
(2) offer the government a potential source of loans in times of 
war, or in other emergencies; (3) supply places where valuables 
may be deposited for safety; (4) furnish a convenient and inex- 
pensive currency; (5) gather surplus funds lying idle in their 
owners’ possession and give them employment by lending them 
to men in need of borrowed capital. The last two of these argu- 
ments — that banks provide an inexpensive currency, and that 
they give activity to what would otherwise be idle surpluses of 
capital — have a long and important development, which must 
be traced at length elsewhere. 
The importance of habits of punctuality in meeting one’s obli- 
gations was frequently emphasized by writers who urged it as 
one of the merits of banks that they foster such habits. Gallatin 
refers to it, adding that punctual fulfillment of engagements was 
not common in the several sections of the country until banking 
developed in them.! And that banks, through loans, give the 
government valuable aid, especially during wars, was a frequent 
and obvious observation. Hamilton made considerable of it in 
his report of 1790,2 and the influence that it had at the time of 
the passage of the National Bank Act, during the Civil War, is, 
of course, well known. 
The value of banks as places of safe deposit for money and other 
valuables was frequently urged in the colonial period, and con- 
cerns us but little. The colonists also made much of the conven- 
ience of bank notes as currency, because of their lightness and of 
the ease with which they are counted. A few urged also the con- 
1 Gallatin, “Suggestions on the Banks and Currency” (1841), Writings, iii, 370. 
A writer in the Southern Quarterly Review of 1854 (xxvi, 223) remarked that by 
inducing punctuality in business affairs, banks economize the use of money, enabling 
each dollar to serve in twenty payments in the same interval in which it could 
otherwise effect but one or two. 
2 Banks help the government, said Hamilton, by large direct loans, rendered 
possible by the concentration of the loanable funds in a single place and under 
unified control. They also aid in the collection of taxes, by “the increasing of the 
quantity of circulating medium, and the quickening of circulation,” thereby making 
it easier for the citizen to acquire the money that he needs for the payment of taxes. 
Also by loans to individuals for the payment of taxes. Report on a National Bank, 
American State Papers, Finance, i, 68. See also Hamilton’s Works. ii, 443.