I53
The desirability of tempering the rigidity of laws establishing
reserve minima, in order to provide for periods of abnormal strain,
received attention early in the discussion of such laws. Professor
Tucker urged that a few weeks indulgence be granted whenever a
drain reduced the reserve below the required ratio. The bank
was to forfeit a portion of its profit in the meantime.! Tucker
later proposed that a bank whose specie reserve became deficient
“should be required to restore it by abstaining from all new loans,
by calling in former loans, and by buying specie, under a daily
pecuniary penalty for the delay, to be paid into the public treasury.”
 2 Another writer dismissed as absurd any law requiring a
given reserve minimum, such as fifteen per cent. ‘Of what use,”
he asked, “is it that a bank has the gold and silver if the law
forbids it to part with it? To comply with the terms of the
law, the bank must have at least 30 per cent in specie, 15 per
cent for use, and 15 per cent fo keep according to law.” ® He
commended the Ohio Law, which solved this difficulty by regarding
 demand deposits with sound banks in New -York,
Boston, Philadelphia, and Baltimore as equivalent to gold and
silver on hand.
Others saw that imposing a minimum reserve ratio implied in
fact that a larger percentage had to be maintained, but found no
objection to such regulations on that account. “A legal minimum
of 20 per cent will, it is believed, give a practical minimum of not
less than 23 to 30 per cent,” it was urged, ‘for no prudent bank
will voluntarily occupy a position on the verge of legal death.” *
Samuel Hooper, whose Specie in Banks is significant for the unwonted
 stress it placed upon the importance of preserving an
adequate reserve, also thought that no prudent banker would
fail to keep sufficient reserves in excess of legal requirements to

PRINCIPLES OF NOTE ISSUE

t Tucker, Theory of Money and Banks (1839), p. 208. Cp. South Carolina, Report
 of Special Committee of the General Assembly (1849), p. 16.
' Tucker, “Banks or No Banks,” Hunt's Merchants’ Magazine (Feb., 1858),
xxxviii, 148. See Hooper, Specie in Banks (1860), p. 22, for a like view.
3 T. P. Kettell, “The Money of Commerce,” De Bow’s Review (Oct., 1848), vi,
261. Cp. J. N. C., Southern Quarterly Review (Sept., 1850), xviii, 129.
* Opdyke committee’s Report on the Currency (1858), p. 15.