Banking theories in the United States before 1860

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Multivolume work

Identifikator:: 1780159447

Document type:: Multivolume work

Author:: Marx, Karl http://d-nb.info/gnd/118578537

Title:: Das Kapital

Place of publication:: Berlin

Publisher:: J. H. W. Dietz Nachf., G. m. b. H.

Year of publication:: 1926-

Collection:: Economics Books

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Volume

Identifikator:: 1780159595

URN:: urn:nbn:de:zbw-retromon-188277

Document type:: Volume

Author:: Marx, Karl http://d-nb.info/gnd/118578537

Title:: Der Produktionsprozeß des Kapitals

Volume count:: 1.1928

Place of publication:: Berlin

Publisher:: J. H. W. Dietz Nachf., G. m. b. H.

Year of publication:: 1928

Scope:: XLVIII, 768 Seiten

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Multivolume work

Structure type:: Chapter

Title:: Erster Abschnitt. Ware und Geld

Collection:: Economics Books

CHAPTER XI THE NATURE OF BANK DEPOSITS Early recognition that deposits constitute part of the currency. — Failure generally to realize that deposits may be created by the banks. — A few instances in which this was understood. — Conclusion. IN reviewing the theories that prevailed before 1860 with respect to the nature and utility of banks, we have inquired merely whether it was believed that banks, in making loans with their notes, lent only what they had in turn received from shareholders and depositors; and whether it was thought that by the opera- tions of banking any capital was created, prices disturbed, or specie driven from the country; but we have so far avoided raising the correlative question how far bank deposits were held to share these several characteristics with notes. We now turn to this other problem.! Two questions arose here: are deposits to be regarded as a part of the currency? and are they ever created by the banks them- selves? That demand deposits subject to withdrawal by check constitute a part of the currency on an equal footing with notes was apparently recognized by American writers somewhat in ! The practice of drawing checks upon demand deposits came in with the begin- nings of banking in this country. In 1786 Pelatiah Webster commented upon it as so convenient that “it is almost universally adopted by people who keep their cash in our present bank” (the Bank of North America). See Political Essays, P- 434. The volume of notes exceeded that of deposits in the aggregative balance state- ments for all the banks of the country until 18 55, although in Massachusetts the total amount of deposits passed that of notes (not, to be sure, permanently) as early as 1806. (See Report of the Comptroller of the Currency (1876), pp. 95, 98, 99 and passim.) The relative sparseness of population, and, no doubt, the less complete development of the banking habit, told against the use of checks, with its implica- tion of frequent visits to the banks. The greater attention accorded to notes can hardly be accounted for on the ground that deposits were as yet little used; the explanation seems to lie rather in a misapprehension of the nature of deposits, dis- cussed in the text, and in the fact that the more spectacular evils of banking were connected with the function of note issue.

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