PRINCIPLES OF NOTE ISSUE 129

be expected to arise in every nation, the suspension of specie
payments by banks, when the circulation consists principally of
bank notes, is one of the evils which ought to be considered as
the inevitable consequence of their establishment.’ Apologists
for the banks were numerous during the suspensions of 18 37-1840.
A select committee of the Michigan legislature made the absurd
report that to require the banks to resume “would seem to imply
the same moral obligation, on the part of the debtors of those
institutions, to pay them in coin, that the banks are under to pay
their debts in a like medium. Your committee can see no reason
why the moral obligation is not strictly reciprocal.” 2
This seemingly lax attitude toward the obligation to maintain
convertibility was often primarily an indifference of hopelessness
— the product not so much of failure to perceive the importance
of uninterrupted convertibility as of despair of achieving it, born
of the wretched conditions that attended our early banking.
On the other hand, there were proposals aplenty for a definitely
inconvertible bank currency. Projects for land banking, for example,
 were by no means lacking long after commercial banks had
been well established in this country. Similar schemes are, to be
sure, advanced to this day by those who, through comfortable
ignorance, mistake the archaic for the novel. Mathew Carey’s
account of the debate in Pennsylvania in 1785 contains several
suggestions that loan offices, to make advances upon land after
the fashion of colonial precedent, be substituted for the Bank of

' Reports of the Secretary of the Treasury on the State of the F inances, ii, 401. Cp.
C. F. Adams, “Theory of Money and Banks,” Hunt's Merchants’ M. agazine (Aug.,
1839), i, 115; E. C. Seaman, “Currency, Commerce, and Debts of the United
States,” Hunt's Merchants’ Magazine (May, 1858), xxxviii, 549, 550.
* Report of Select Committee on Banks ( 1830), in United States House of Representatives,
 26th Congress, First Session, Document 172, p- 1308. Apologists for
the banks at times of suspension of specie payments commonly argued, as did this
committee, for example, that such action was necessary in order that the banks
might continue to furnish an adequate circulating medium. The Committee of
Ways and Means of the House observed that, on the contrary, “the suspension [of
1837] . . . suddenly converted eighty millions of currency into merchandise, and it
was withdrawn from circulation.” The operation of Gresham’s Law, in the committee’s
 opinion, resulted in the first instance in contraction rather than relief of the
pressure. Report (March 5, 1838), p. 3.