66 BANKING THEORIES IN UNITED STATES
principles, remains to be dealt with. Not only did Stephen
Colwell! deny any appreciable influence upon prices to bank
notes, but he attached little importance to the quantity theory
with respect to metallic money as well. “There is no strict or
determinate relation,” he contended, “between the quantity of
[metallic] money in a country, and its range of prices. They act
and react upon each other in a way, and to an extent, that it 1s
well to mark and study; but these influences are too undefinable,
and too much blended with other causes, to be exactly appreciated.
 Of all the causes which materially affect the range of
prices in a country, the changes in the quantity of money are,
perhaps, the least influential”?
It is too generally taken for granted that prices are the naming
of so many pieces of money, or coins. But the larger payments
are made almost exclusively by means of credit in units of abstract
 money of account. These credits cancel each other at the
bank without the intervention of money, directly or indirectly,
at any stage of the process.® Colwell gave an extended list of
conditions affecting prices through their influence on the market,*
cited statistics of prices to prove that the quantity of metallic
money plays but a minor part in their determination, and concluded
 that no immutable laws can be laid down with respect to
the influence of the currency upon prices, because “that which
depends on the minds, temperaments and passions of men, and
the casual occurrences of life, can never be reduced to laws like
those which govern bees and ants.” °

1 Colwell’s Ways and Means of Payment (18 59), the most impressive single work
on banking produced in America before 1860, stamps him as a writer of the first
rank. He was born in Virginia in 1800, and began the practice of law there. Later
he moved to Philadelphia, and soon left the bar to become an iron merchant. He
acquired considerable wealth and gave liberally of it to endow professorships and
libraries. After the Civil War (in which he was a staunch Unionist, though born a
Southerner) he was appointed special commissioner to study the internal revenue
system, with a view to suggesting revision. He wrote little except his Ways and
Means of Payment, parts of which were forecast in a few articles in Hunt's Merchants’
Magazine.
2 Colwell, 0p. cit., pp. 523, 524.
3 Ibid., pp. 541 fi. 4 Jbid., pp 525-528.
5 Ibid.,p. 535. That prices vary more or Jess directly with the quantity of money,
whether metallic or convertible paper, was denied by very few. Two minor writers