142 BANKING THEORIES IN UNITED STATES
were far more numerous than supporters. Carey, in 1848, and,
at a later date, Carroll, criticized Peel’s Act on the ground that it
made no attempt to regulate deposits, which are quite as variable
in volume at the discretion of the banks, and which influence
prices as much as do bank notes.! Amasa Walker thought that
the act constituted a step in the right direction, but felt that it
did not go far enough. ‘That any such exigency as that which
existed in England in 1847 could have occurred,” he wrote, ‘if its
bank had not promised to pay specie for fourteen millions of
notes without the specie to pay with, we presume that neither
Lord Overstone, nor Lord Monteagle, nor any other English-
man — nobleman or commoner — will for a moment pretend.” ?
Walker seems to have profited none at all from the contention of
Carey, Carroll, and others, that deposits represent an equal source
of danger.
2. SHOULD NOTES OF SMALL DENOMINATIONS BE
PROHIBITED ?
The desirability of permitting banks to issue small notes had
been seriously questioned in England before we had our first ex-
perience with modern banking. The relatively high denomina-
tion below which the Bank of England could not issue notes was
reduced to £1 during the Restriction Period, and the problem of
small notes received a great deal of attention until the act of 1829
established a £5 minimum. The controversy in England had its
counterpart in the United States.
Smith had stated the principal objections to small notes in the
Wealth of Nations. Such notes are received with less caution, and
a person who does not enjoy a sufficient degree of credit to give
had rejected the principle in 1849, on the ground that it presupposed the restriction
of the power of issue to one, or a few, banks, which savored too much of monopo-
listic privileges. South Carolina, Report of Special Committee, pp. 11-13. See also,
Dwight, “The Progressing Expansion,” Hunt's Merchants’ Magazine (Aug., 1851),
xxv, 151; W. G. Hunt, “Banking and Currency,” Bankers’ Magazine (July, 1858),
viii. 2.
1 See supra, Chapter XI.
2 A. Walker, “Lord Overstone on Metallic and Paper Currency,” Hunt's Mer-
chants’ Magazine (Feb., 1830), xi, 155.
