Banking theories in the United States before 1860

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Monograph

Identifikator:: 1755492553

URN:: urn:nbn:de:zbw-retromon-133529

Document type:: Monograph

Author:: Miller, Harry Edward http://d-nb.info/gnd/1055250875

Title:: Banking theories in the United States before 1860

Place of publication:: Cambridge

Publisher:: Harvard University Press

Year of publication:: 1927

Scope:: XI, 240 S.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Part III. Bank notes and bank deposits

Collection:: Economics Books

156 BANKING THEORIES IN UNITED STATES 293 Ant Le her from all parts of New England.! In reply it was pointed out that the flow of notes toward Boston was the effect of her growth, not the cause of it; that the adoption of the system and the choice of Boston as the redeeming center were based on this very ten- dency of notes to be drawn into that city.? As to the contention that the arrangement prevented the country banks from issuing as many notes as formerly, with the result that these outlying banks were forced to curtail their accom- modations to local tradesmen, advocates of the system main- tained that the reduction in country note circulation represented notes which had been issued, not by ordinary local bank loans, but “by the artifices of brokers and bank agents’ at Boston.’ One of the chief purposes of the system, several writers argued, was to make the circulation of interior banks more sensitive to changes in the state of the currency in the larger mercantile cities. With country bank notcs at a discount in the cities, in the absence of provisions for redeeming them there, it was upon the city banks, whose notes were at par, that a drain for gold fell whenever an unfavorable balance of trade occurred. Meanwhile the country banks, scarcely affected by the export of gold, might continue to expand their issues, obstructing correction of the redundant currency.* Provision for redemption at a commercial center, it was also asserted, enabled banks to operate on a smaller reserve ratio.’ A nation-wide clearing system for notes, subdivided into per- haps eight or ten districts, was proposed by a number of writers. Each district was to have a clearing house of its own, with an interdistrict clearing house to complete the system.’ Sponsors 1 Smith, “The Suffolk Bank System,” Hunt's Merchants’ Magazine (March, 1851), xxiv, 319, 320. 2 Foster, “The Suffolk Bank System,” Hunt's Merchants’ Magazine (May, 1851), xxiv, 573. 3 Anon., Remarks on the Banks and Currency of the New England States (1826), p- 37 t+ “Theory of Banking,” by a Merchant of Boston, Hunt's Merchants’ M agazine (July, 1841), v, 31; Wilkes, “Banking and the Currency,” Hunt's Merchants’ Magazine (Aug., 1858), xxxix, 1094. 5 Bankers’ Magazine (Dec., 1850), Vv, 514. 6 “Theory of Banking,” Hunt's Merchants’ Magazine (1841), v, 32-37; Wilkes, «Banking and the Currency,” Hunt's Merchants Magazine (1858), xxxix, 198;

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