214 BANKING THEORIES IN UNITED STATES
needed; the banks of New York simply “went out of business as
banks of loan and discount.” Dwight urged the adoption of a
new customary reserve ratio and its enforcement by a board of
the associated banks of the city.
A special committee of the New York Clearing House gave
ready support to Dwight’s insistence upon more adequate re-
serves at the financial center? Two years later the editor of the
Bankers’ Magazine renewed the agitation in an aggressive criti-
cism of the complacent annual report of the New York banking
department? Samuel Hooper, a prominent Boston merchant who
was a keen participant in the banking discussion of the day,* also
urged the necessity of larger reserves at New York, and empha-
sized that such minor money centers as Boston should likewise
keep surplus reserves in behalf of their respective districts.
Hooper, Dwight, and Nathan Appleton showed some recog-
nition of the evil of decentralized responsibility at New York.®
1 Dwight, xxxviii, 162. 2 Bankers’ Magazine (April, 1858), xii, 823 ff.
3 Ibid., (March, 1860), xiv, 673-678. Despite the incisive criticism to which the
whole situation at New York had been subjected since the panic of two years be-
fore, the superintendent of the New York banking department in his report of 1859
saw fit to congratulate the legislature upon the condition of the banks, adding:
“While the disasters of 1857 were not a consequence of our present system of bank-
ing, yet he [the superintendent] firmly believes that that system was the fulcrum
which enabled the banks of this State so speedily and successfully to resume their
corporate obligations, after their suspension in 1857.” He warned against meddling
with the banking laws that gave such excellent results. Report, 1859, Bankers’
Magazine, xiv, 653. It helps one to take present-day comments of a similar nature
more philosophically to read that there were defenders of the New York banks after
the catastrophe of 1857, who urged that, “having burned their fingers once, they
are now too wise and shrewd to hazard again, at any future time, the risks of undue
expansion.” Bankers’ Magazine (June, 18509), xiii, 931.
4 Hooper, after acquiring wealth in business, served in Congress continuously
from 1860 to the time of his death in 1875. He was a leading spokesman for the
financial program of the administration during the Civil War. In a letter of 1869,
Chief Justice Chase attributed the success of the bill establishing a national banking
system to Hooper’s efforts.
5 Hooper, Specie in Banks (1860), p. 46.
6 Ibid., p. 43; Dwight, “The Financial Revulsion,” Hunt's Merchants’ Magazine
(Feb., 1858), xxxviii, 162. For Appleton’s views see Boston Daily Advertiser,
October 12, 1857.
A measure suggestive of the use of clearing-house loan certificates (the origin of
which has usually been placed in 1857, or 1860) seems to have been adopted by an
association of Boston banks formed soon after the suspension of specie payments in
