Let the history of the late United States Bank aid us in answering this
inquiry.

For several years after the establishment of that institution it dealt
almost exclusively in local discounts, and during that period the
country was for the most part disappointed in the consequences
anticipated from its incorporation. A uniform currency was not provided,
exchanges were not regulated, and little or nothing was added to the
general circulation, and in 1820 its embarrassments had become so great
that the directors petitioned Congress to repeal that article of the
charter which made its notes receivable everywhere in payment of the
public dues. It had up to that period dealt to but a very small extent
in exchanges, either foreign or domestic, and as late as 1823 its
operations in that line amounted to a little more than $7,000,000 per
annum. A very rapid augmentation soon after occurred, and in 1833 its
dealings in the exchanges amounted to upward of $100,000,000, including
the sales of its own drafts; and all these immense transactions were
effected without the employment of extraordinary means. The currency of
the country became sound, and the negotiations in the exchanges were
carried on at the lowest possible rates. The circulation was increased
to more than $22,000,000 and the notes of the bank were regarded as
equal to specie all over the country, thus showing almost conclusively
that it was the capacity to deal in exchanges, and not in local
discounts, which furnished these facilities and advantages. It may be
remarked, too, that notwithstanding the immense transactions of the bank
in the purchase of exchange, the losses sustained were merely nominal,
while in the line of discounts the suspended debt was enormous and
proved most disastrous to the bank and the country. Its power of local
discount has in fact proved to be a fruitful source of favoritism and
corruption, alike destructive to the public morals and to the general