Internationale Konvention zum gegenseitigen Schutz privater Vermögensrechte im Ausland

Banking theories in the United States before 1860

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Monograph

Identifikator:: 1756995737

URN:: urn:nbn:de:zbw-retromon-141075

Document type:: Monograph

Title:: Internationale Konvention zum gegenseitigen Schutz privater Vermögensrechte im Ausland

Edition:: Als Ms. gedr

Place of publication:: Köln

Year of publication:: [ca. 1927]

Scope:: 70 Bl

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: A. Einleitender Teil

Collection:: Economics Books

146 BANKING THEORIES IN UNITED STATES crease the circulation of coins, and regarded the small-note ques- tion as unimportant.! In more recent discussions no little stress has been laid on the fact that the privilege of issuing small notes, by providing an in- expensive ill money, makes possible the extension of banking into small villages that could not support it otherwise.? This argu- ment played no part in the discussion that we have reviewed. Nor is this surprising. A bank can use its own notes as till money, affording a relief to its reserve to that extent, only in meeting an internal drain on its deposits. It cannot, obviously, utilize notes in meeting the demands of note-holders; nor in meeting the de- mand of depositors for means of foreign remittance. But de- posits were far less important, relatively, in the earlier half of the preceding century than they are to-day. The problem of an in- ternal drain, moreover, was one to which little consideration was given before 1857.3 Again, in order that notes may be acceptable to depositors in times of pressure, it is necessary that the banks issuing them enjoy a high degree of confidence, and this condition was not frequently present. 3. NoTE ISSUE SECURED BY PUBLIC STOCKS In the preceding chapter we had occasion to note a plan that received considerable attention after 1815, proposing the issue of bank notes redeemable in government stocks instead of in specie. This had not a great deal in common with the bond- secured system of issue embodied in the free banking laws of New York (1838) and other states and in the National Bank Act, al- though it did, like the latter, contemplate a paper currency to be given national circulation by being based upon United States 1 Colwell, Ways and Means of Payment (1859), pp. 428, 508. * E. g., Withers, English Banking System, pp. 43, 44. 3 Cp. Report of the Superintendent of the Banking Department, New York (1857), Bankers’ Magazine, xii, 622. Money markets were quite largely localized before the middle of the century and heavy demands for specie were generally in- duced either by adverse balances of trade, or by misgivings concerning the solvency of particular banks. The rise of New York as a financial center introduced the phenomenon, especially emphasized in 1857, of an internal drain of major magni- tude.

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