While there is not much use in studying banking from the standpoint of ancient history, or in an antiquarian way, it is of considerable importance to understand how existing banking institutions have developed and what is the practice in regard to banking in other countries of the world. It is by such study that the existing banking problem is properly apprehended and that the foundation is laid for a suitable understanding of what should be done in the way of legislation for the improvement of present methods.

The nineteenth century is a period exceedingly rich in banking experience. During that century a great variety of banking methods were tried, and theory after theory was taken up, applied, and discarded. So also in the matter of practice a great transformation was brought about and banking methods were almost revolutionized. This makes the banking history of the nineteenth century of very great value to the student of the subject from the practical standpoint.

In the United States, a review of banking history will show that many of the numerous schemes and proposals now brought forward from time to time as original have been tried, worked out, and thrown aside. Here and there a good plan or system has been discarded for inadequate reasons, and an outline of past efforts shows why the changes then introduced were unwise and why a return to some methods then abandoned may be beneficial.

1 Material for this chapter has been largely drawn by permission of the publishers (La Salle Extension University, Chicago, Illinois) from the 1916 edition of American Banking, by H. P. Willis.