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

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.

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