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

24 BANKING THEORIES IN UNITED STATES ri Be or Ey ERAN A Ri Ia 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, some- what 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 at- tention of a great banking house. Hence these institutions tend to make the rich richer, and the poor poorer and more depend- ent.” 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. Jack- son’s opposition to the second Bank of the United States placed the bank question in politics, and for a while the monetary sys- tem 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.

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