130 BANKING THEORIES IN UNITED STATES
North America, whose short loans were largely unavailable to the
farmer in particular.
“Let us then,” urged a contemporary pamphleteer, ‘coin our
lands and thereby obtain from those most valuable of all mines,
a sufficient circulating medium of commerce. For this purpose
let loan-offices be instituted in the several states, on principles
similar to those whereon the loan-office of Pennsylvania was established
 for many years.” 2
Alexander Hamilton had subscribed to the fallacies of land
banking in two letters written to Morris in 1779 and 1781. He
proposed a bank which was to issue notes against landed security,
and among its advantages he included the stock attraction of all
land-bank schemes — that the proprietors could at the same time
have the use of their land and of a cash representative of its
value? Later, however, Hamilton saw that land was an improper
basis for a bank of issue, and in 1784 he opposed a project (attributed
 to Chancellor Livingston) to found such a bank in New
York. Six years afterwards, in his Report on a National Bank, he
again explained the defects of landed security as the basis of
banking.
In the eighteen-thirties a number of the southern and western
states established “property banks,” which sought to aid the
farmer by combining mortgage loans with the issue of circulating
notes and met with varying degrees of disaster.” A committee of
the Florida legislature, in rueful contemplation of the results of
the experiment by that state along this line, harked back to the
Massachusetts episode of 1740 and found that the outcome bore
«a remarkable similarity to that of the same system in Mississippi,
and in Florida, and other parts of the Union, within the last few

1 Carey, Debates and Proceedings (1786), p. 25, passim.
2 [William Barton], “True Interest of the United States’ (1786), American
Museum, ii, 31. The loan office of colonial Pennsylvania was, of course, notably
successful. (Cp. D. R. Dewey, Financial History of the United States, pp. 20,
27.)
3 Hamilton, Works (Lodge edition), iii, 61, 82.
4 Report on a National Bank (1790), American State Papers, Finance, i, 73.
5 See Sumner, History of Banking in the United States, pp. 244 ff., 390, and
Knox. History of Banking in the United States, pp. 604, 612, passim.