BANKS CAUSE PRICE FLUCTUATIONS 69 
they do cause temporary price disturbances, and differences of 
opinion were mainly as to the magnitude which the latter can 
assume before correction, called for by dwindling reserves, takes 
place. 
A thesis that received far greater support was that bank notes 
would, indeed, vary in quantity exactly with the needs of trade 
(and usually, although not always, this was taken to mean that 
they would not diverge from the standard of a purely metallic 
currency), if properly issued — that is, if issued only in the dis- 
counting of short, real bills. This doctrine, however, since it begs 
the question whether or not banks do, in actual practice, conform 
to the approved principle, is quite different from asserting that 
banks cannot introduce currency disorders. We have postponed 
its consideration, accordingly, to the pages dealing with matters 
of banking policy.! Not a few accepted the theory, but argued 
that in point of fact the prevalence of accommodation loans and 
other abuses resulted in grave disturbances of prices.? 
lL Infra, Chapter XV. 
* E. g., Thomas Cooper, Lectures on . . . Political Economy (1826), pp. 43, 44, 151.