166 BANKING THEORIES IN UNITED STATES
The crisis of 1857 did much to bring about a sudden realization
of the significance of New York as a growing financial center, and
the problems of a central reserve city, if not of a central reserve
bank, were now analyzed more deeply than ever before.! But
Nathan Appleton seems to have been the only one to give much
heed to the need of further centralization of control at New York.
Even he did no more than to lament that the power exercised by
the banks of the metropolis of giving the keynote to the whole
country in the matter of expansion and contraction was subdi-
vided among fifty-five directorates, acting independently, anél no
longer under the harmonizing influence of a Gallatin.’
About the same time appeared the noteworthy suggestion that
a central bank of issue be founded at Boston,owned and controlled
by all the banks of New England and New York and enjoying a
monopoly of the privilege of note issue for the district. Its notes
were to be receivable and payable at par by all the subscribing
banks. It was to receive deposits, but, in order that it might not
compete with the subscribing banks, it was to be allowed ‘to
discount only for its stockholders, the local banks.” It could thus
“relieve the temporary pressures to which small banks are so
liable,” jealously preserving a reserve of from 33 to so per cent
for the purpose. The author would have preferred to include the
whole country in his scheme, if Congress could be prevailed upon
to enact it.?
Some slight attention was given to the possible service of a na-
tional bank in bringing interest rates in the several sections of the
country more nearly to an equality by effecting a more advan-
tageous distribution of capital. Thus one proponent of a national
bank observed that seasonal variations in the demand for money
in the different parts of the country would be met by loans to
each other by the branches of the national bank at the direction
of the parent bank.? In general, however, emphasis was placed
! See Chapter XVII, below.
2 Appleton, Letler to Boston Daily Advertiser, Oct. 12, 1857.
3 J.S. Ropes, “The Financial Crisis,” New Englander (Nov., 1857), Xv, 712, 713.
Some of the details given in the text have been taken from a further elaboration by
the same author in Bankers’ Magazine.
¢ John R. Hurd, 4 National Bank, or No Bank (1842), p. 40.
