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 I. The utility of banks as a source of media of payment

Collection:: Economics Books

12 BANKING THEORIES IN UNITED STATES whenever the province issued a considerable quantity of its bills of credit.’ The tendency to identify banking operations with the issue of notes for circulation persisted in theory long after the develop- ment of modern commercial banking belied it in practice.” As late as 1839, Daniel Webster made note issue the distinctive feature of a bank. “What is that, then,” he asked, “without which any institution is not a bank, and with which it is a bank? It is a power to issue promissory notes with a view to their circu- lation as money.” ? And those who did not so completely confuse banking with the issue of circulating notes frequently made the latter the prin- cipal function of a bank. Here American practice bore them out. It is a commonplace of our banking history that many early banks were established in remote parts of the country for the sole purpose of issuing notes — notes which, being put into cir- culation through travelling agents and like resorts, would seldom be returned for redemption because of the inaccessibility of the issuer’s location. One must guard, however, against attaching too much signifi- cance to the apparent overemphasis of note issue. While some, like Webster, made the exercise of that power the sine qua non of banking, not a few of those who seemed to share this position had reference simply to the facts of American practice, and would have answered in the negative a direct question whether 1 «A colonial bank was not at all like that of modern days, —a convenient in- stitution for receiving deposits, making discounts, and negotiating drafts,—it was, as Francis A. Walker tersely defined it, ‘simply a batch of paper money,” whether organized by private individuals or by public authorities.” Dewey, Financial His- tory of the United States, p. 24. Cp. Walker, Money in its Relation to Trade and Industry (1879), p- 267- 2 Tn discussing the Bank of North America, Pelatiah Webster refers to the use of demand deposits subject to check as so convenient that “it is almost universally adopted by people who keep their cash in our present banks.” Essay on Credit (1786), in Political Essays, p- 434- 3 Works, vi, 127. For further examples, see An Enquiry into the . . . Tendency of Public Measures (1794), p. 77; Putnam, Tracts on Political Economy (1834), pp- 9, 10; etc. It was apparently in the belief that the two were synonymous that the first constitution of Towa (1846) prohibited any person or corporation “from exer- cising the privilege of banking, or creating paper to circulate as money.”

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