8

BANKING THEORIES IN UNITED STATES

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gross ignorance all too frequently took their place. Niles and
Gouge and Raguet complained vehemently and often of these
evils. But there was also a growing perception of faults in the
system itself — faults which, quite apart from the delinquencies
of the individual banker, were certain to work mischief. There
was a better analysis of the nature of banking. The new doctrines
 stressed the fluctuations in the value of the monetary
standard and bore fruit in discussions of the business cycle. On
the one hand, they assumed the form of opposition to all banks
of issue; on the other, they took a more promising turn — a groping
 toward sounder principles of banking.

1 The president and directors of the People’s Bank of Roxbury, Massachusetts,
which was accused within three years of its founding in 1833 of practices inviting
forfeiture of charter, pleaded in attenuation of their blame that they were “not
themselves capitalists, nor men of previous experience in banking; and acquired
their first knowledge of its rules and principles in this comparatively humble institution.”