A History of American Currency A History of American Currency: With Chapters on The English Bank Restriction and Austrian Paper Money
By William G. Sumner
2000/12 - Beard Books
1587980045 - Paperback - Reprint - 397 pp.

A fascinating glimpse of the history of American paper currency and the rise of banks.

Publisher Comments

Categories: Banking & Finance | History

Of Interest:

A Legal History of Money in the United States

This is an absorbing historical sketch of the history of American paper currency from the American colonies through the Civil War.  Included are the development of some of the earlier major banks, as well as the financial crises of 1819 and 1825. A discussion of currency and tariffs as a political issue is included.  The English Bank restriction of 1797 and the Bullion Report of 1810 are examined in detail in discussing the question of how to regulate convertible currency. A chapter on Austrian paper money is an interesting addition. An important glimpse of history to delight all economists, bankers, and historians.

Author's Preface

In the autumn of 1873 I published in the "Financier," four or five short sketches of those portions of history which are most instructive in regard to doctrines of currency. The plan was to leave the historical facts to tell their own story without comment. It succeeded so far that many persons who do not believe that financial laws vary with the period, the climate, or the continent, read them with interest, and drew the inferences of which it seemed to be important that we should all be convinced. I was asked to re-publish the sketches in permanent form. In acceding to this request, however, I desired to present these chapters of history more completely, and I determined also to incorporate with this project another plan which I had formed, viz., to edit the Bullion Report. Two of the articles referred to treated of the paper money in the American colonies, and the crisis of 1819. These have been expanded here into an outline sketch of the history of American currency. I regard the history of American finance and politics as a most important department which lies as yet almost untouched. The materials ever are all in the rough, and it would require very long time and extensive research to do any justice to the subject. I hope, at some future time, to treat it as it deserves, and I should not now have published anything in regard to it, if I had not felt that it had, at this juncture, great practical importance, and that even a sketch might be more useful perhaps than an elaborate treatise. It follows from this account of the origin and motive of the present work, that it does not aim at any particular unity, but consists of three distinct historical sketches, united only by their tendency to establish two or three fundamental doctrines in regard to currency.

Yale College, March 1874

From Bob Shippee

William G. Sumner, a professor of Political & Social Sciences at Yale, wrote his history of American currency in 1874. The full title of his treatise is A History of American Currency with Chapters on The English Bank Restriction and Austrian Paper Money. He covers everything from American Indian Wampumpeag currency (which traded at an exchange rate of 6 white beads or three black beads to an English penny) to the then-recent Panic of 1873

William Graham Sumner was born in Paterson, New Jersey on October 30, 1840. An American sociologist and political economist, he was schooled in Hartford's public school, entering Yale in 1859. Between 1863 and 1866 Sumner studied theology at Göttingen and at Oxford, before returning to Yale for almost three years as a classics tutor. 

He was ordained an Episcopal minister and from 1872 was professor of political and social science at Yale. In economics he advocated a policy of extreme laissez-faire, strongly opposing any government measures that he thought interfered with the natural economics of trade.

In A History of American Currency (1874), his first book, Sumner focused on the money issue, then agitated by calls for the retirement of the Civil War "greenbacks" and later the establishment of a "bimetal" standard of gold and silver. Although he paid little attention to the demonetarization of silver in 1873 (a move critics later called the "Crime of '73) he was distressed to see leading classical economists support international bimetallism, among them his Yale colleague Francis Amasa Walker. Holding his fire, he initially called only for a sound currency, but in 1878 finally attacked bimetallism publicly.

As a sociologist he did valuable work in charting the evolution of human customs—folkways and mores. He concluded that the power of these forces, developed in the course of human evolution, rendered useless any attempts at social reform. He also originated the concept of ethnocentrism, a term now commonly used, to designate attitudes of superiority about one’s own group in comparison with others. His major work was Folkways (1907). 

In 1890 Sumner fell victim to what was termed a "nervous illness," the result of a punishing work schedule that had resulted in sixty articles and two books in the previous three years.  Although he resumed his duties at Yale in the fall of 1892, the collapse took a permanent toll on his energies and output. Between 1876 and 1890, he had published some 108 articles and seven books. In the five years following his breakdown, he wrote "only" four articles and two books. Although in 1896 he added another dozen articles and a book, he averaged but two articles a year during the rest of his career.

Whatever his intellectual shortcomings, Sumner's hardheaded honesty and bold address of underlying issues has kept alive interest in his thought and career in recent decades. 

He died in April 10, 1910.

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