Final answer:
Bank notes were intended to provide a reliable and convenient form of money. They were easily portable, simplified transactions, and reduced the need for heavy coins. Bank notes maintained their value by being exchangeable for specie, thus facilitating trust and widespread acceptance in the economy.
Step-by-step explanation:
The purpose of bank notes was to serve as a more convenient form of money compared to gold or coins. Bank notes were advantageous over gold or coins as they were easier to handle and transport, allowed for more secure and less cumbersome transactions, and could facilitate larger transactions with ease. Moreover, by being exchangeable for specie (gold or silver), these notes were able to retain value and trust among users without the need for direct handling of precious metals, which could be risky and impractical for everyday transactions.
During the era of the Bank of the United States, as proposed by Hamilton in his "Report on a National Bank," the issuance of bank notes by the national bank helped stabilize the currency and regulate state banks, which often issued notes irresponsibly. Hamilton's plan was to ensure that the national bank's notes would be backed by specie, thus creating a trustworthy and universal paper currency. Ultimately, bank notes made day-to-day commerce smoother and helped a growing economy by providing a reliable and universally accepted medium of exchange, contrasting with the multitude of currencies previously issued by individual state banks.