24 BANKING THEORIES IN UNITED STATES

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Banks were also said to share with Hamilton's funding system
(with which critics frequently associated them) the evil of tending
to increase inequalities in the distribution of wealth.! This they
were thought to do not only by virtue of the advantages, somewhat
 mystical, which their owners were thought to enjoy, but
also through favoritism in making their loans. As late as 1833,
Thomas Cooper, president of South Carolina College, regarded it
a very serious defect of banks, that they “tend mainly to create
a money aristocracy.” He explained that banking “affords its
facilities never to the poor, but as much as possible to the rich.
The poor deal in small and insignificant sums, not worth the attention
 of a great banking house. Hence these institutions tend
to make the rich richer, and the poor poorer and more dependent.”
 2
These considerations were political rather than economic.
Their significance lies not so much in their influence on theory
as in the evidence they give of the state of knowledge of the time
with respect to banking. Moreover, similar arguments played no
small part at a later date in determining practical policies. Jackson’s
 opposition to the second Bank of the United States placed
the bank question in politics, and for a while the monetary system
 of the country could scarcely be discussed on its merits.
Curiously enough, with Jefferson and Jackson bitterly opposing
the banking system in the introduction of which Hamilton had
played so prominent a role, it was the political forefathers of
William Jennings Bryan who were the ““sound-money”’ men of
our earlier days. The opposition was at first to a national bank
only, and was accompanied by approval of state banks. The

Cp. Hamilton, Report on a National Bank (1790), American State Papers, Finance,
i, 60; and Report of Virginia Committee on Banks (1816), Niles’ Register, ix, (Sup.)
156. See Jackson’s Veto Message (183 2), in Richardson’s Messages of the Presidents,
ii, 570-531.
1 Morris, Address on the Bank of North America (1785), Sparks’s Life, iii, 441;
Enquiry into the . . . Tendency of Certain Public Measures (1794), p. 47; George
Logan, Letters to the United States Yeomanry (1793), p- 8; “The Paper System,”
Niles’ Register (1818), xiv, 242.
2 Cooper, Manual of Political Economy (1833), p. 83.