04 BANKING THEORIES IN UNITED STATES
i
such returns as to permit borrowing money at the rates that went
to make up the high dividends that banks were paying.!
That bank loans are peculiarly adapted to the needs of the
speculator was the opinion of many. In 1803 the governor and
council of Vermont vetoed the grant of two bank charters by the
legislature on the ground that such institutions, “by facilitating
enterprises both hazardous and unjustifiable, are natural sources
of all that class of vices which arise from the gambling system,
and which cannot fail to act as sure and fatal, though slow
poisons, to the republic in which they exist.” > A contributor to
Niles’ Weekly Register wrote that “the facility of borrowing
money of the banks, has multiplied the race of merchants to such
an extent that the business is not worth following,” and many
merchants have become ‘brokers, shavers, speculators — in
other words, blood-suckers of the community.” Commerce,
manufacture, and agriculture, Raymond believed, do not yield
such profits as to warrant their pursuit with money borrowed at
the banks. “Speculation is the only business that can be fol-
lowed with money loaned of banks, and hence we always find
that speculation is most rife, where banks are the most abun-
dant.” * “Those who maintain that banks enrich a community,
are bound to prove that speculation creates wealth,” was the
verdict of a committee of citizens of Philadelphia (including
Raguet and Gouge in its membership) that was appointed in 1829
to report on the growing menace of banking.’ And twenty-five
years later Samuel Hooper wrote that the “effect of too much
bank capital upon the industry of the country is injurious, by
encouraging the investment of money in temporary loans for
purposes of speculation, instead of inducing permanent and pro-
ductive investments.” ¢ Banks put the spare cash of individuals
to work, but too frequently it is speculative work.
1 Anon., pp. 81, 82. 2 Knox, History of Banking, p. 345.
3 “The Paper System,” Niles’ Register (May 2, 1818). xiv, 154, 155. See also,
3bid. xv, 217.
+ Raymond, Elements of Political Economy (182 3), 11, 746,147.
5 Report of the committee appointed by a Meeting of Citizens (March 25,
1829), Free Trade Advocate, i, 315.
¢ Hooper, Currency or Money (1855), p- 02.
