PREFACE.
A brief exposition of the principles of Banking, was all that the writer originally intended to give. In the first draft of the work, the historical sketch was part of a chapter. It has been extended to its present length, from a belief that a tolerably full account of incidents in the History of American Banking would be acceptable to the reader.
If additional illustrations of the nature of the system were wanted, they might be derived from its history in Great Britain. These, our limits will not permit us to introduce. We have, however, room for a sketch of the changes of opinion that have taken place in that country, in regard to paper money.
Mr. Joplin, in his History of the Currency Question, after collating different passages in the treatise on "The Wealth of Nations," gives the following as a summary of the views of Adam Smith.
"1. That he would prefer the circulation between consumers or what may be termed the consumptive circulation, to be metallic: but that he thought it a greater advantage for the circulation between dealer and dealer, to be paper; admitting at the same time,
"2. That if Bankers were subjected to the obligation of an immediate and unconditional payment of their notes in coin on demand, as soon as presented, their trade might, with safety to the public, be rendered in all other respects perfectly free.
"3. That the amount of notes which the country required was an amount equal to the sum of metallic money which would circulate if there were no paper.
"4. That this amount could not be exceeded without producing an immediate demand for gold to be sent abroad previous to its passing into general circulation: by which, of course, no derangement of prices, from excess of issues,
