56 BANKING THEORIES IN UNITED STATES

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commercial paper. The proffer of such paper for discount, it was
claimed, shows that there has already taken place a bona fide
transaction that makes the issue of notes for its completion desirable.
 In other words, bank notes issued against real commercial
paper can never be excessive, inasmuch as they are put into circulation
 in response to the needs of trade.
These two doctrines are quite distinct, and need not go together.
 The Bullionists of the Restriction Period, for example,
were opposed, not only by writers who believed that convertibility
 is not in itself a sufficient check against overissue, but also
by those — the so-called anti-Bullionists — who regarded convertibility
 as too suppressive a check. These latter urged that
notes issued in the discount of real commercial paper can never
be excessive, and that convertibility is not merely superfluous,
but harmful, in that it prevents banks from meeting all the requirements
 of trade.
Both theses had received the weighty sanction of the Wealih
of Nations. And all the various shades of opinion found in England
 were reflected in the American literature.

The colonial pamphleteers did not, in general, distinguish between
 bank notes and government issues with respect to their
bearing upon prices, nor did they usually contemplate convertible
notes put into circulation by the discounting of short commercial
paper. Their price theories had, accordingly, but little relation to
the later doctrines.!
In the very earliest criticisms of banks after the close of the
colonial period, the question of their influence upon prices played
a curiously inconspicuous part? Much more was heard of the
menace of a “monied aristocracy,” and of the tendency of banks
to drive specie from the country. The charge that banks produce
troublesome changes in prices was not long delayed, however. In
1792 we find a writer asserting that the proprietors of the Bank
of Massachusetts had the power “to govern the medium of commerce
 in and about the metropolis of the state. By emitting

1 See Chapter XII, however, in which inconvertible notes are discussed.
2 See Witherspoon. Essay on Money (1786), pp. 43, 44, for a notable exception.