186 BANKING THEORIES IN UNITED STATES

wrote a critic of Bentham’s views on usury, ‘it will hardly apply
to such a state of things as exists in the United States, where the
lending of money is principally by irresponsible corporations,
which have the privilege of making the money they lend.” Bentham’s
 thesis assumes ‘‘that the money lent is real money, and
that the lenders are private individuals in the enjoyment of no
privileges.” !
And, finally, Tucker, commenting upon the variable discount
rate of the Bank of England, doubted its efficacy in arresting a
drain of specie. Requiring banks to lend at six per cent when the
market rate is ten per cent enhances the likelihood of partiality
in making loans. But he questioned the wisdom of permitting the
banks to alter their rates freely

until the habits of prudence and good management are more settled, and
more command the public confidence. ... The desire to increase their
profits which now prompts them to excessive discounts, might then tempt
them to raise the rate of interest; and the alternations from a low to a high
interest, and from high to low, would give a new spring to gambling speculations
 with the funds of the bank, which is already sufficiently strong. Such
a power, which may one day be safe and salutary would certainly be, at this
time, premature and mischievous.?

1 [Gouge?)], Journal of Banking (1841), p. 52.
2 Tucker, “Banks or No Banks,” Hunt's Merchants’ Magazine (Feb., 1858),
XXxviii, 153.