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

PRINCIPLES OF NOTE ISSUE 163 banks would be likely to lead to runs upon their neighbors.! Niles, who at first had given rather little attention to banks, suddenly began to harp upon the necessity of reducing them “to a proper number.” “After the evils entailed upon our country by negro slavery,” he wrote, ‘‘ there are none, in my opinion . . . so fatal to the freedom and prosperity of the people as the multiplication of the banking establishments.” 2 “Under any system of paper money,” Gallatin wrote to the English banker, Horsley Palmer, ““a single bank of issue, such as that of England was sixty years ago, such as that of France [is] now, is to me the beau idéal.” * And H. F. Baker wrote in his history of American banking that, when the number of banks has been sufficiently enlarged to secure to the public the benefit of competition, “it appears to be as unwise to multiply them any farther as it would be to make any unnecessary addition to the number of our colleges.” * Tucker, Raguet, and a number of minor writers agreed that “The increase of banks of issue when the supply of their paper is already equal to the demand, is a loss to the community, in as far as it is an increase of expenditure with- out any increase of utility.” ® There is a certain amount of work for banks to do, and competition is desirable, but as soon as enough banks have been established to accomplish the work and secure competition, further increase in the number of banks only adds to the expense at which the bank services will be furnished. The question of a national bank, which played so prominent a part in our banking discussion, was largely a political issue. The underlying factors were economic, however. In some respects the problem was intimately tied up with that of the most advan- tageous number of banks to have. This was especially true when the establishment of a national bank enjoying a monopoly of note issue was favored. ! Baldwin, Thoughts on the Study of Political Economy (1809), p. 46. ' Niles’ Register (June, 1817), xii, 263. * Gallatin, Letter to Palmer (May 1, 1833), Writings, ii, 462. ! H. F. Baker, “Outline History of Banking in the United States,” Bankers’ Magazine (Oct., 1856), xi, 255. 8 Putnam, Tracts on . . . Political Economy (1834), p. 9. Cp. Tucker, Theory, etc. (1839), pp. 217-219; Raguet, Currency and Banking (1839), p. 79.

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