INTRODUCTION 
bank notes can never be overissued so long as they remain con- 
vertible on demand scarcely took root in this country because 
the poor homing power of our notes forbade. Again, the English 
discussion differed from our own because of the peculiar signifi- 
cance of Bank of England notes as cash reserves of the other 
banks. The question of a national bank, which occupied so much 
attention in this country, raised essentially different issues. And, 
finally, in England criticism of a central bank led to detailed dis- 
cussion of bank policies in their relation to the price level, whereas 
in America, with its decentralized banking, lack of a suitable 
mechanism for putting the more refined notions into effect made 
the legal safeguarding of note issue a more practical problem. 
Reversing the relationship, the influence which the developing 
principles of banking exerted upon banking practice is no less 
obvious. As the crass doctrines of the early inflationists began 
to be abandoned, legislation became more intelligent. With the 
growing realization of the essential part played by specie reserves, 
a sounder policy was adopted, whether voluntarily or by legal 
compulsion. Better understanding of the nature of deposits called 
a halt to the practice of limiting the volume of notes by that of 
deposits. And legal reserve minima began to be related to de- 
posits as well as to notes. 
There are few men who stand out as meriting attention by 
reason of definite original contributions. With the exception of 
an occasional Raguet or Colwell, most of those who contributed 
to the discussion are significant chiefly as reflecting the general 
state of banking theory at the time. Our study is decidedly one 
of doctrines and not of men. The questions asked are, “What 
was known about this matter or that?” rather than what a certain 
writer thought.! And with respect to the former type of inquiry 
a study of the period is fruitful. There was, almost to the end, 
much criticism, richly merited, of the practices of individual 
bankers as such. Fraud and artifice constituted a large chapter 
in the history of our early banking; and when they were lacking, 
! It is pleasing, withal, to find interspersed among the gamut of merchants and 
bankers, physicians and statesmen, a goodly number of writers who were scholars 
of no mean distinction.