books



previous page: Bookkeeping: Banking | by George W. Miner
  
page up: Banking Books
  
next page: Modern Banking; Commercial And Credit Paper

The Theory And History Of Banking | by Charles F. Dunbar



The preparation of the following chapters is the result of the need of some convenient statement of ordinary banking operations, felt by the writer when lecturing upon banking to a large class of students in the elements of political economy. To the chapters devoted to such operations it was found useful to add a series of historical chapters on certain of the great banks and banking systems, partly for the easy illustration of theory and partly to supply the want of any good manual of banking history.

TitleThe Theory And History Of Banking
AuthorCharles F. Dunbar
PublisherG. P. Putnam's Sons
Year1922
Copyright1922, G. P. Putnam's Sons
AmazonChapters On The Theory And History Of Banking

By Charles F. Dunbar

Formerly Professor Of Political Economy, Harvard University

With Chapters On Foreign Exchange And Central Banks

By Oliver M. W. Sprague

Professor Of Banking And Finance, Harvard University

With Supplementary Chapter Presenting The Record Of The Federal Reserve System

By Henry Parker Willis

Professor Of Banking, Columbia University Formerly Secretary Federal Reserve Board

Fourth Edition

The Theory And History Of Banking 1
-Preface To The First Edition
The preparation of the following chapters is the result of the need of some convenient statement of ordinary banking operations, felt by the writer when lecturing upon banking to a large class of stud...
-Chapter I. Introductory
The operations of banking, as the system has been developed in the last three centuries, appear at first sight to be singularly complex and difficult of comprehension. This is not due, however, to any...
-Chapter II. Discount, Deposit, And Issue
A BANK may be described, in general terms, as an establishment which makes to individuals such advances of money or other means of payment as may be required and safely made, and to which individuals ...
-Discount, Deposit, And Issue. Part 2
We now have to consider what it is that the bank gives in exchange for the right to demand and receive money at a future time, acquired by it under these circumstances. To return to our first and simp...
-Discount, Deposit, And Issue. Part 3
A little consideration of the manner in which notes are issued by banks will show that in the bank-note we have only another form of liability, differing in appearance, but not in substance, from the ...
-Chapter III. Banking Operations And Accounts
Having thus taken a general view of the nature of banking operations, it is now necessary that we should enter upon the consideration of some of their details. For a bank, as well as for any other ...
-Banking Operations And Accounts. Part 2
Resources Real estate, furniture fixtures, etc. $5.ooo Specie ............. 95,000 $100,000 ...
-Banking Operations And Accounts. Part 3
The results of the process of investment in commercial paper and in other securities are best understood when we trace the effect in the account of the bank. Taking then the account as it stood on pag...
-Banking Operations And Accounts. Part 4
In the management of its reserve the bank itself necessarily feels a strong conflict of interests. On the one hand, it is impelled to increase its securities as far as possible, for it is from them th...
-Banking Operations And Accounts. Part 5
The reduction in liabilities and increase in cash through the payment of maturing loans will not be secured unless the bank refrains from making new loans to an equivalent extent, and this course of a...
-Chapter IV. The Check System
In the preceding chapter reference has been made more than once to the transfer of deposits by one holder to another, and to their consequent use as currency. It is now necessary to examine more close...
-The Check System. Part 2
1 A statement of the working of the check system, under circumstances of different degrees of complexity, is given by Jevons, Money and the Mechanism of Exchange, pp. 252-257. 2 For a further notic...
-The Check System. Part 3
What natural limit is to be found then to the continued circulation of a liability for deposit, when once it is created and set in motion by the process of discount? Plainly, if at any stage the ...
-The Check System. Part 4
NOTE To illustrate the working of the Clearing-House system, we will suppose the case of six banks carrying on business in the same town. On a given morning we will suppose the messengers of these ...
-Chapter V. Bank-Notes
It has already been said that the notes of a bank are a liability distinguishable in form, but not in substance, from its deposits. The creditor of a bank of issue has his choice between taking the ev...
-Bank-Notes. Part 2
That governments have so frequently felt it their duty to take measures for the protection of the holders of bank-notes against the insolvency of the bank, but have so seldom legislated for the protec...
-Bank-Notes. Part 3
1 E. g., see New Hampshire Compiled Statutes of 1853, ch. 148, 30. For objections see Comptroller's Report, 1898, p. xiii. et seqq. The method described in this supposed case, of protecting ...
-Bank-Notes. Part 4
The differences of situation among banks are so great and convenience of intercourse varies so much even in any limited district, that the law would have found it difficult to create and enforce any s...
-Bank-Notes. Part 5
1 Whitney, History of the Suffolk Bank. 1 Graham, The One Pound Note, chs. xv. and xvi. 2 In Scotland there are only ten banks which are authorized to issue notes; in Canada there are twenty-two...
-Chapter VI. Central Banks
It is necessary, as we have seen, for every bank to keep some money on hand to meet counter payments and what are commonly the more considerable requirements of settlements with other banks in the sam...
-Central Banks. Part 2
The special functions of central banks may be grouped under three heads: they serve as fiscal agents of government; they have large powers of control over the currency through the more or less complet...
-Central Banks. Part 3
1 There is, indeed, one kind of loan to which this statement does not apply, - the foreign bills held by many of the Continental central banks; but see p. 93 below. In securing business central ban...
-Central Banks. Part 4
Two specificobjects are in view when the rate of discount is advanced - the diminution of the domestic demand for loans and a modification in foreign exchange rates so that gold exports may be checked...
-Central Banks. Part 5
The foreign trade and financial operations of the leading European countries are of enormous magnitude, both absolutely and relative to the total business of those countries. Many of the great crises ...
-Chapter VII. Foreign Exchange
Foreign Exchange is the business which is concerned with buying and selling in one country of rights to the payment of money in other countries either immediately or in the near future. Payments and c...
-Foreign Exchange. Part 2
A glance at a newspaper will show that in addition to cable transfer and demand rates there are a variety of other rates generally quoted - bankers' bills and various kinds of commercial bills drawn f...
-Foreign Exchange. Part 3
To illustrate the financing of exports, we may take the case of a shipment of goods from the United States to South America. The financing is handled in a number of different ways, but one of them wil...
-Foreign Exchange. Part 4
Foreign short-time loans do not ordinarily occasion movements of money into the borrowing country, but they frequently check gold exports. They are seldom made except when rates for loans are relative...
-Foreign Exchange. Part 5
These two indispensable foreign exchange functions were developed during a long period in which peace had become the normal condition of the world. It is, therefore, no more than was to have been expe...
-Foreign Exchange. Part 6
Through the assistance of the British Government, London was able to resume, toward the end of August, 1914, both the accepting and discounting of bills. But a few months later a new cause of difficul...
-Chapter VIII. The English Banking System
The Bank of England owes its origin to the financial straits to which the government of William and Mary found itself reduced in carrying on the war with Louis the Fourteenth. The revenues of the king...
-The English Banking System. Part 2
No other Bank shall be erected, established, or allowed by Parliament, and that it shall not be lawful 1 6 Anne, ch. 22; 15 George II., ch. 13. It is clear from this language that Parliament und...
-The English Banking System. Part 3
Under this arrangement the Banking Department carries on its business of buying securities and using its credit in the form of deposit accounts, on the same general principles on which any bank of dep...
-The English Banking System. Part 4
Resources Government debt 11. m'ns securities 17.6 Other securities . 7.8 ...
-The English Banking System. Part 5
The most striking fact in the situation of the Bank of England is that the Bank is the center of a great system of joint-stock and private banks, whose aggregate business and liabilities are many time...
-The English Banking System. Part 6
The Bank met this dilemma by raising its rate of discount on the 5th to nine per cent., in the hope of repelling the least necessitous borrowers, and by making in the course of the next week an increa...
-The English Banking System. Part 7
1 This whole subject was reported upon, with evidence, by a select committee, in Parliamentary Documents, 1837-58, vol. v, interrupted, if doubt on the part of buyers prevents sales, or embarrassment ...
-The English Banking System. Part 8
The peculiarities of this position, which sometimes lead to an erroneous classification of the Bank of England as a government bank, have been much emphasized by the manner in which the other constitu...
-Chapter IX. The French Banking System
From 1793 to the latter part of 1796, banking can hardly be said to have existed in France. The government tolerated no issue of paper except its own; the Caisse d'Escompte, which for many years befor...
-The French Banking System. Part 2
1 In 1840 the privilege was extended to 1867, in 1857 to 1897, and in 1897 to the end of 1920. In the closing years of the Empire this subjection of the Bank to the government caused a great increa...
-The French Banking System. Part 3
The charter of 1857 also authorized the issue of notes as small as fifty francs, and the government was empowered after 1867 to require the opening of a branch in every department. The Bank was reluct...
-The French Banking System. Part 4
1 The chief movements in the account of the Bank of France, caused by the war, can be seen in the following table, given in millions and tenths: ...
-The French Banking System. Part 5
The government was able in 1872 to begin its payment to the Bank at the rate of 200,000,000 francs per year; the payment of the indemnity to Germany was completed in August, 1873, and in 1874 the Bank...
-The French Banking System. Part 6
The success of this course of action has been, in part but not mainly, due to the advantage enjoyed by the Bank of France, as a debtor, under the bimetallic system of the Latin Union. Having the le...
-The French Banking System. Part 7
2 The annual reports of the Bank show that the average of bills discounted are for sums under 700 francs, and their average time of maturity about twenty-seven days. The policy of favoring the small t...
-Chapter X. The German Banking System
When the present German Empire was established in 1871, the reform of the legislation upon currency and banking was felt to be a pressing necessity. In their coinage some German states had ranged them...
-The German Banking System. Part 2
Certain general regulations adapted the thirty-two existing independent1 banks of issue to the new system. The exclusive right of issuing bank-notes was then given to them and to the Reichsbank, with ...
-The German Banking System. Part 3
The note-issue,of the Reichsbank, though subject to considerable fluctuation over short periods, has shown a strong upward tendency, the average yearly circulation ranging from 600,000,000 to 800,000,...
-The German Banking System. Part 4
1 In 1895 the tax was paid for three weeks, in 1896 for six weeks, in 1897 for nine weeks, and in 1898 for sixteen weeks. The act of 1909 also made the notes of the Reichsbank a legal tender. This ...
-The German Banking System. Part 5
The specie held by the Bank is not looked upon solely as the banking reserve of the country, but is also regarded as a most important resource for the Empire in time of war. Any loss of its gold is ac...
-Chapter XI. The National Banks Of The United States
The national banking system owes its existence to the Civil War. Although in the majority of the States the banks incorporated under State authority were badly organized and insecure, and although eve...
-The National Banks Of The United States. Part 2
1 In 1870, when the return to specie payments finally seemed to have been postponed indefinitely, an act was passed authorizing the establishment of gold banks, issuing notes redeemable in gold coin, ...
-The National Banks Of The United States. Part 3
The national bank-note when issued is the promise of the issuing bank, and must be punctually met by it, when payment is required, as any other liability must be. The note, however, also carries with ...
-The National Banks Of The United States. Part 4
The experience of these years proved that the expansion or diminution of national-bank currency was powerfully affected by an influence quite distinct from the need of bank currency for use by the pub...
-The National Banks Of The United States. Part 5
Specie . . . . . . . .. . . . .. . . .. . . . . . . $338.6 millions. Other lawful money . . . . . . .. . .. . . . 127.8 Redemp...
-The National Banks Of The United States. Part 6
A plan of operation was therefore settled upon, which should become binding upon all the banks in the Association, when adopted by three fourths of them. By this plan the banks agreed that, for the pu...
-The National Banks Of The United States. Part 7
That the arrangement for equalizing the reserves adopted in 1873 would have availed to prevent suspension on subsequent occasions is highly probable, indeed a practical certainty. In 1893 events prove...
-Chapter XII. Federal Reserve Banks
By Henry Parker Willis The Federal Reserve Act was not, however, a departure from past precedent. Its foundation had been deeply laid in American banking experience. Although opinion was slow in cr...
-Federal Reserve Banks. Part 2
The Federal Reserve Act was essentially a plan for banking cooperation and self-government. It provided for the establishment of not less than eight nor more than twelve institutions to be known as re...
-Federal Reserve Banks. Part 3
While the Organization Committee originally established twelve districts, it did not succeed in drawing the lines between them altogether satisfactorily. Recognizing that such might be the outcome of ...
-Federal Reserve Banks. Part 4
Before proceeding, however, to a brief review of the history of the operations by which the system gradually advanced to the position thus indicated, it is necessary to sketch certain essential aspect...
-Federal Reserve Banks. Part 5
1 Bank of Bay City v. Fellows; Federal Reserve Bulletin, Vol. iii., p. 534. The history of the Federal Reserve System may be roughly divided into three periods, the first extending from shortly aft...
-Federal Reserve Banks. Part 6
This system had for a long time been so unsatisfactory that when the Federal Reserve Act was framed effort was made to relieve the situation by the plan of constituting the reserve banks official depo...
-Federal Reserve Banks. Part 7
When the Federal Reserve System was organized many supposed that it would follow the same plan that had been pursued by the Bank of England. The conditions, however, were found to be such as almost...
-Federal Reserve Banks. Part 8
1 How extensively the banks of the country have used the direct rediscount privilege may be inferred from the following table: able frame=box rules=all border=1> Month 1...
-Federal Reserve Banks. Part 9
Rediscounts and Sales of Discounted and Purchased Paper Between Federal Reserve Banks [In thousands of dollars.] Discounted Bills Purchased Bills T...
-Federal Reserve Banks. Part 10
The measure tended to increase the amount of circulation outstanding and also to keep it out very much longer than would otherwise have been the case, that being the injurious effect always observed u...
-Federal Reserve Banks. Part 11
1 Later deposits were to be made when required through depletion of balances. 2 The facts as to the use of the settlement fund may be briefly reviewed as follows: Daily Average Number and Amount...
-Federal Reserve Banks. Part 12
In these circumstances, as will readily appear, there was offered an unusual opportunity to the member banks of the reserve system to finance not only the trade of the United States but that of the wo...
-Federal Reserve Banks. Part 13
When we ourselves became participants in the war, the Federal Government sold its own bonds to our citizens and lent the proceeds to foreign countries which used them in paying for our goods here, and...
-Federal Reserve Banks. Part 14
During the year 1921 legislation of various kinds was considered by Congress in the attempt to secure application of reserve funds on a freer basis to agricultural and other needs. The demands of farm...
-A History of Modern Banks of Issue
By Charles A. Conant With an Account of the Economic Crises of the Nineteenth Century and the Fourth Edition, Revised and Enlarged. 8vo. No better volume can be recommended to the general re...









TOP
previous page: Bookkeeping: Banking | by George W. Miner
  
page up: Banking Books
  
next page: Modern Banking; Commercial And Credit Paper