60 BANKING THEORIES IN UNITED STATES
certainly does not bear out the assertion of the committee as to
the prevalence of such a view.
After 1825 a number of writers began to contend that bank
notes cannot influence prices so long as convertibility is maintained!
 The historian, George Bancroft, in a forceful criticism
of the McDuffie Report of 1830, regarded as ridiculous the assertion
 of the report that banks can cause great fluctuations in
prices through expansion and contraction of their note issue. “A
redundancy of convertible paper is a contradiction in terms — if it
were redundant, it would be converted.” > The notion that convertible
 bank notes can depreciate the monetary standard was to
him pure ‘‘sophistry.”
On the whole, however, the theory that convertibility of bank
notes is a complete guarantee against their being issued in excess
received no great support in this country. As in England, the
most common objection was that convertibility does, indeed,
prevent a permanent excess of currency, but that it cannot prevent
 temporary overissue.® It operates as a curative, rather than
as a preventive; “its effect is consequential, not immediate and
direct.” ¢ The familiar criteria of the state of the currency — the
foreign exchanges, the price of bullion, and the export of specie —
each received a little attention, and Eleazar Lord, a scholar whose
writings and reform activities embraced the rather curious combination
 of religious and economic interests, made the significant
suggestion that the “fact of an excess or deficiency of currency in
a country is to be proved by a comparison of the cash prices of
exportable commodities in that and other countries.” ® Samuel
Hooper, also, attached particular importance to the prices of
articles that enter into foreign trade.’

1 Porter, Review of Cardozo’s “Notes on Political Economy,” North American
Review (1827), xxiv, 184-186; Phillips, M anual of Political Economy (1828), pp.
263, 266; “On Currency,” Free Trade Advocate (July 25, 1829), ii, 56; [David Henshaw],
 Remarks on the Bank of the United States (1831), pp. 10-21; Bowen, Principles
of Political Economy (1856), pp. 318, 300.
2 Bancroft, in North American Review (z331), xxii, 20.
3 Publicola, Letter to Gallatin (1815), PP. 33, 34; Eleazar Lord, Principles of
Currency and Banking (1829), pp- 49-51.
¢ Lord, zbid., p. 50. 8 Ibid., p. 24.
6 Hooper. Currency or Money (1835), p- 59. passim.