Publisher's Synopsis
This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1915 edition. Excerpt: ...system, it is a security which has followed the ups and downs of government paper money. There was neither purpose nor pretence of maintaining the notes of national banks at parity with coin while the notes of the government itself and the bonds by which bank-notes were secured were depreciated. Banknotes remained from 1864 to 1879 at par with government obligations because those obligations themselves were far below par in coin. If the banks issuing circulation upon securities were the model for the national banks of to-day, the banks of State which existed before the war were the models and the prototypes of the Federal treasury management under the rtgime of legal tender paper. Their issues were not banknotes in the sense in which banking currency is opposed to a government paper currency, but they were simply the bills of credit of the State resting upon the credit of the State as completely as the paper roubles of the Bank of Russia. The fact that they were hardly ever maintained at par in coin, in spite of the great wealth and undoubted honesty and good faith of the people of the various commonwealths, is a practical demonstration of the folly of attempting to do a banking business upon general credit without quick assets. The lesson of the history of the State banking systems, reduced to its simplest terms, is the success of the systems based upon the banking principle and the failure of the systems based upon the deposit of securities, like the national banking system, or based simply upon the public credit, like the government currency system of the United States. One of the essential errors of early banking in the United States was the undue expansion of credit upon slender resources. It is an error common in a new country and...
