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A history of the national banking system of the United States
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A history of the national banking system of the United States
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H .>II-/ y I I ~ ... s T u t O? .I .!. T.VE . 0 I T t - ' 1 -y--.,. .. '.I 1 9 .... • Contents Chapter .age T .... Conditions leading to the JTational Banki ng SJstem: Introduction. . • . • • • • • . • • • • . • . • . • • . . . . • . . . . • . . . . 1 Secretar: .Chase calls representative bankers ... 2 The den1e. nd notes • • . • . . . . . . • . . . . . . . . . . . . . . . . • . . . 4 Genera l opinions of c ondit ions ••••..•.........• 7 c t her conditi ons der-iand t e - .tt t ion _ S ste . . . . 9 I I. The fo 1 mdat i o principle and e rlJ pl n ~ fr the III. The n e '"' s ~ rs t e r_ 1 • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 12 ri gin of the nrinciple ........................ 13 ~1ans submit t ed by renresentative en .......... 15 Secretary ~hase sets for t h to Conrress I .. .. r. Pott or's plan . • . • . • • . . . • • . . . . . . . . • . . . . . . . . . 16 bill • Con i n F'r. Ho o1 er .J.. The de1 ate The clebate res s ..•........ • • • • • • • • • • · • • · • · · · · · · introduces c 1 lrre1 C 11 T b i 11 ••••..•.•.•• , • the Senate ..•.................... in • tl1e T 1n .i. O US e ••... • . • • • • • • • • • • • • • • • • • 1 18 21 1 Change s i n the b i 11 • • • • • • • • • • • • • • • • • • • • • • • • • . • • 2 3 _ he bi 11 bee or:ie s la v1 . • • • • • • • • • • • • • • • • • • • • • • • • • • 24 SW- !lEl. ry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 5 IV. So11rces of the nevv system ...•.........•............. 27 V • The f" i rs t ear o f t he n e 1 - T S~/ s t em . . • . . . . • . . • . • . . . • . • . 0 anke first enterine...... . • . . . • . . . . • . . . . . . . . . . 0 ., ta t e b ~ nlr s ob j ec t t o t n e s st em . . • . . • . • • . • . . . . 1 Chapter VI. II a e Discus~ions leadi to reenact ent................ 34 Debate in the House ..••.• ......... •.•.•......•.. 34 The bi 11 b e f o re t h S e na t e . • . • . . . • • . . . . . . . . . . • . . 4 5 Conference report ..••.•....•...............•••.• 52 Summar of legislation •...•.•....... ....... ..•.• 54 VII . Taxati on of st te banY issues .•..•..•.....••.•.•.• 56 Effects o the tax ..•..... ............... .....•. 57 o e s bsec 11en t , n e i t a , i on . . . . . . . • . . • . . 58 VI I I • Re 11 lat i n t.. e c 1 :::--r enc-, . . . • . . . . • . . . . . . . . • . . . . • . • . • 6 0 , , r. Cl rke' s rec o _ e <18. ion . . . . . . . . . . . . . . . . . . . . . 60 Interest on deposits d~scussed •..•.•......... .. • 61 1 rore c ire t i n note p r vided.... . • . • • . . . . • • • • 61 Pro t retire .1e., reqt ire d .•... .....•••.••••• . .. 6~ .,J nditi n i 1 72 ....••.. .. ......•...•........• 63 _} e .. c t of t1n e , 2 O , 1 7 • • • • • • • • • • • • • • • • • . • • . • • 64 The Re cle A p ion 1ct ,nd the ct f . ~ arch 30 , 1878. 65 IX • Tl1 e C r i s i s o f 1 7 • • • • • • • • • • • . • . • ., • • • • 11 • • • • • • • • • • • 6 6 en e f i t fro 1 t h e s fJ, s t e 1. • • • • • • • • • • • • • • • • • • • • • • • • 6 9 • nkin ror 1 0 t o 1890 .•............. ..•..... .. 7 0 :Jxte· di ,. c rters. . • . . . • . . . . . . . . . . . . . • . • . . . . . • . . 71 ... r . n 1 C ,, e . n n . . . . . . . . . . . . . . . . 71 • f o 1 . 1 • 72 1 g 1 ne l e1 1 0 • • • • • • • • • • • • • • • • • • 1 • d . t 0 7 .. ) e 1 10 e 1 re • • • • • • • • • • . h on r 74 a e ev1 • • • • • • • • • • • r t e r e n _t f 88 ;:- ... ...... ..•........ 7 I II Chapter a e Circllla ion • J. n 188 6 ••••.••.••.•••...••••.••.•••• • 75 CoI!lptroll er s r ., ort for 1889 ................... . 75 XI. Pro sres o f t e b nkin s rste fro1 _ 18 0 to 1900 ... 77 The Silver urc 1 .as C t • • • . • • • . . • . • . • • • . . . . . . • • . . 77 Circul ti o deer ases .•.......•.................. 78 ris i s o ..... 1 8 90 •.•............•... . .. ... .. . ......• ?9 :rv vo C .a i ,t r ll er' ""1 of i c e • • • • • • • • • • • • • • 0 of 1893 .•..••...... . ......... . ......•..... 0 ... ecor: · e i o1 s o f • 1 • • • • • • • • • • • • • • • • • • 82 ~e di cal n e r r 0 e i n • • • • • • • • • • • • • • • • • 83 t o ler ' r en o ... 0 1 9 • • • • • • • • • • • • • • • • • • • • 5 e le t ....... .. .. . ... ... . . ..... .. .... . .. . . . 6 Cl .e 0 ..... . . . .. . ... .. ...... .. .... . 0 • e f le .. 1 e i t " i 0 .. • • • • • • • • • • • • • • • • • • • • 91 _h e e . of 0 f l s 0 • • • • • • • . • • . • • . . . • • . • . . . • • . . • . • . • • . . . . . • • • • 91 n o • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 93 The I e n . l . ha b r o-r C • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 94 · h lcl r · c h i 11 •. •..... .. . .. ... .. . . .... . . . .. ... . he : Oi l e_ i l • • • • • • • • • ••••• • • • • • • • • • • • • • • • • • 95 h e 3i 11 •• •.•. . .. • • • • • • • • • • • • • • • • • • • • 6 XI • h av n n ...... .. .. ......... . . • • • • • • • • • 9 one .usi o. • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 0 - 0 SYSTJ;:t.r C pte1 I . T rro r - TJ " j ) + . ... .1 n l _ S, ~t 'r! 0 n ·te l:<. .. C. ;+ . . cf C , l .let _ lf; r. ,_ r: o_ ..... C __ v i 1 .., ... , b . ; ; de!' I. t; f ; Ylfl.TIC _: 1 l ,a_ ' t.nu - c o n .e e n 0 . · c a 7 S .:_ t 1 .. -'- +· ,,;-; 7 7 t l L -. l I .. .- Y1B reve ne coC'I .. ·- - .. _._ t } _. 1l .. bo t: <-i 1 n · .ne O - l ~ . - , 1 .. 4 ,- 0 ,00 . e I Tl: p l b l . QOO 0 or. 'tr'1u n ' ' . l + . ~ .r 1_ .. . on o, e o r : r-..> , 011 c i e ' · \ 74, 9 . . ., n •.J ..... u i .. <. 4 ~ . I A n .-')2 0 .J " 5 , 00 .p 0 ..o "l' l .1. O C , T -. . ,40 ,767. -f t i 0 , 7G ' ste. ~ . .. r. J. ) I 0 s 1 " . l J i S+ to~ ', • ' 0 te s 00 • • ·r . Chase, Secreta.~r the ' reas r , r. te the ount neede J:), r t e ne e r WO ld be ab t ' ~,320, 000, 000. And vhen h . 1 • Co et Jul.,r 4, s C s SSJ.On 0 :> ""'0 S S 1 18 1, n e reco JLie:ndecl t l '')80, 000, 000 be • c~ b • ra1s xa •1on , d t h t t • • p orti o sho b c 1uirecl ib r e 1 a C rel'! C J.n1ne T l o ns . Co ress also • of ortion be • -~"aS i n _avor e er C w r ne raised b T lo' r1s, a\ once s("'led t he ActQ of 1 , 17 and. .L " Aug~ s 5 , . ere b -rr t h • • 1 -for amo 1 ecre • ... i e J. SS l not 0 e.cee d ~ j 2 50, 000 0 . three - 7 • ?. JJ tr asur r tes, n ear n or • t Afe in e r on .. s t: no ore u n seven . er C • inter s t . lso • thori to . 1 ce e . CS [;J.Ve a e - V' r -A. ~ ..L his not , 0 0 0 . • O..i. a l. ·e n non - n .e r s -· , ~ · ' .J be . t:rens tes · , ab 7 de . rd .. to be . Tl. r n n e· ~ , · ve ·e l. ., ..,. ' • ... . . no+ t l l•50 1 .s 0 .. . S le 1n a.eno _nc ..i l. 1 S re . a n ~ n ' - - ,, • Secre r .... .. ,, u .. e e i . nfer ed b m ::er f -ost n, . rew _orJ.: n. d.el hi ri 1 .c:; t: } I!l s !Ol_l 0 '- ~ 1m tl .,l 0 1 r .J.. BO l C -., C "I e C s ' ve t re est C .. -yoe ~'0 e d .o c p r cci _ .. i o C 11es, t r e re e u o · d ,, " t 1 c e t,L «.'150, 000 , 00 sec 1lre :., ors 1 • 0111 ) r O J "'v e. a Ot_ 10 e .. ce:pt for t .,,,-o reuso s: (1) t act f rch, 1 1, "1 d n be te t ( 2 ) t t I.I • • fo 0 T T V r v .r l , l ' • ~ ' " ' . r h ni t s " 77 . e e n nc • ' three-year 7.3 per cent. tr asur notes . However, the Secretsr r did not long eop his ro ise concerning the dermnd notes, an. a. eral issues of t he dem and notes. ov rnber had made ver y li - his a ct ion the bankers strongly resented, because these not es were legal tender f or public dues, and their presence i circulation reduced he specie fund of the banks at a time V-'h en they wer e mak i ng every possible effort to turn specie fro co ~ erce in to t he r easury. But the banks had nother grievance with ecret r Chase; up until ugust , 1861, t he la~ dem nde t t the Treasury pay out or rec eiv e onl coin or gover t notes , but now by the Act of ugtl.st the Sec1etar of the re ur could deposit public moneys wit h any of the solvent sp cie pa in banks that he aa fit. The ban ks to ok this t o me that bank 1 bills or book credit . could be received in p l ace of coin . This privilege t he especia 1 w tea n ow since the dern a d notes that ]-r. Chase so persistentl sent out took do.vn their specie reserve. But the Secretar y did not t ake th mean i ng of the law that vvay and de anded coin for th pal ent of • e1r obligations of the treasur y notes. r . Chase m ust not be understood, however, as eing out of s mpat with the ban kers because ha did not grant these requests, for wcl as n ot hi s e.tti t ude. eith er ust he e looked upon as i nappr ec ja tive of what the banks had none for t e Gover nment at th· s most critical time. In fact, he r plied to the ban ers' reque t to 3 _________ , _____________________ _ 1 Conant " ' isto of . od r B S 0 l n u , P • 8 . have their drafts accepted i n lieu of coin. t .at he wold do so if possibl , and he furthers id that if the ban~ could furnish what co in he a bsolutel need d, he would w ithdr w the government notes already issued and agr e to emit no more: 4 but ur1less t hey coul do that he w01 d be obliged to make use of the government ere di t in this form as far as his necessities would require. e also told the bankers tbat it soon becam e evident to him after his conference with them early i n the surn mer, t.ba t the bank note circulation could not ma intain at par unless it would be made receivable the Government, and tat this could not be done without ris s o dangerous financial · embarrassment. In fact, the banks c ou. d not be r the sacri fices necessary to prevent suspension. This apparent chan e of policy. on the p rt of r. Chase is erfectly expl ine hen we recall that financial conditions fror.1 da to day. ever t he less, b of efficient service fro m the b nks ere raid cha gin , even thi s lan all probability as destroyed, for t he were forced to s uspend s ecie payment , and that meant, of course, that t he reasur must fo low suit, for its a:ily eans of obtaining s ecie as through t he banks . The Demand otes. But as if to ma e alarming conditions most desperate the legal tender notes follo ed t he "unmiti g ted" flood of de mand notes, and as a result the god w s taken across the ocean or hoar ed because the more v uabl curre c r is a wit hdra n fro c rcu a ion. nd gold ent s eedil u af er the suspension of specie payments until in the early au er of 1 1864 it had reached 285. But the demand notes not only contributed to the bad conditions brought about byte suspension of specie payments, but because the were receivable for dues, circu ated at a premium over .state bank notes, treasury notes nd greenb eke, 2 which were not receivable for custoos. Then the older coun- tries of whom we might have borrowed, fearing e still greater over issue of paper it hdrew alls pathy. Secretary Chase Propoges he ational Bank. Evidently something must be done and t hat i edjate ly. It will be remembered t t ecretar Chase had e rl i n the year (1861, r co~mended a national banking syst em. Among his arguments were the following; (1 tha he t hought such a system ruld secure common ntere t hen founded upon national security as a basis of issue; (2 there would be 3 uniformity. Probab y no better idea concernin g the need of uniformity, could be given tha:n by quotin he fo 1 lowing lines from Dewey's t inancial Histor : "On January 1, 1862, t here were, in the United tates, 149 6 banks that iss u ed c irculati n notes, possessing a aggregate capital of 't, 420, 00 ,000 and carrying a circulation of 18 ,000 ,000 . he ere establis ed under the ----------------------------- ___ ....,_._ .._..._«-"" _ . - - l 2 3 Conant, " istor of , od Dewe , " i nan c al i stor of t he Ibid, p.280 . • 0 • i ed t e " , p. 28 • • laws of twenty-nine differen t states: they guaranteed different privileges, were subjected to differ nt restrictions, and t heir circulation as based on a great variety 0£ aecu ities of dif ferent qualities and quantities. I n so estates he bill hold er was secured by t he daily redemption of notes in the principal cities; i n oth rs byte pledge of sate stocks; and i others by coin reserves. There were eta te banks w 1th bran ches; in dependent banks; banks organ ized under gen eral law, and banks with s pecial charters. I n ew York t ere er e banks incorpor ated by special acts; individual banks; and banks or ized under t he free banking law; i n Louisiana there ere charter ed banks and free banks; i n Ohio, i ndependen t banks, free banks and a State bf:l!lk wit h numerous bra ches; i n Indiana, a State banlt wit h branches, and free ban ks; i n a 0 sachusetts, b k s under sp ecial charter, and banks organized under general law. In some tates there were boards of ban co n1 i s ioners who m de frequen t and t horough examinations, while i n others n o such boards existed, or existed o l y i n nae· i n a fe States th public was i nfor med as to the cond i t ion of banks by t he ptiblic stion of eriodic 1st te enta , but as a rule publicit as no t i nsiste upon . In onl nine sts.tes di d the law r equire th circulation to be secured by state bonds, and t he s curities pled ed were on ~ 40 ,000 ,000 , leavi ng over ~ 120 ,000 ,000 ro vided for b ot er assets, orb n one . bout e e thousa d differen t i nd of not e circula ed . O ver three thou s a varieties f altered n otes re aflo t s enteen un red varieti es o apuriou note, a o er ei h h r ed rieties 6 1 of imitations." General Opinions of Conditions. The followin g quotations from some of the leading magazines, newspapers and publ1.c speeches, will show the gen- eral opi ion of such a state of affairs. An article from the "National I ntell1gen earn of February 4, 1863, reads; " Hereto fore, although one nation, bound by t he ties of a common lang uage, and interstate and i nter ational com erce, e have been separa ed b divers e systems of currenc as those hich arked the alien and hostile principalities and po·ers of Europe. London and unich, aris and t. Petersbur are not more inac ces~ible to eacl1 other, except by the fi ancial ridge of ex- 2 chan ge_ , than are ew York , St. Louis, oston an ' Chicago. enator Sherman in 1863 quotes the following from the 7 "Lond on imes"· , n B want of a paper currency that ould e tak- en in every stat e of the nion at its n o inal value, the mer i cans have suffered severely. The differen t states were, as to their bank notes, so man foreign nations each refusi n t he paper of t he other, except at continually varying rates of discount. Fre- quentl t h ere as a greater los on a. er take or sent from an easer to a ester n state t h into u tri n mone i n Vienn • on lish bank not es converted If the social stor wee a ay the ,vi ld-ca " a bogus anks of he Un ion, it will hav left some m all o p ens tion for t he reek of be ter hings . " I un ' ' erch ts I a z i ne " of ebru r l 62, ' 1 n i cia 1 t 0 • a t ' PP • 21- 22. e -e t r l t a is, " e Or· i 0 h ion 1 B in e " 1 ' • • a read; "The losses hich e in times ast been su tain ed by bill holder ha ve been i ml!lense and have fallen main 1 on the poorer classes. It has been ss. tisfactorily ascertained by careful examine t i on s t mt the p eop 1 hav suffered to t he amount of more th n 1 0, 0 0 ,000 by broken bank note s since our present eyatem ca.me into being. ome banks make it the i r ch i 8 business, i f ct, o manufacture an ut ou t as lar e a n amount of these notes as the:y can by contr ivan ca eep i n circulation. mhe Il ·no i ba ks had , for example, on the first o f Jan uary, 1860, a circul t ion of ~a,981,723; specie on hand o ly ~22 , 812 or p40 to 1 1, to say nothing of ~p 697 ,037 they owed besiaes for deposits." he "Chica o ri une " calla the notes then i n circu lation "tb.e ragged a d ort le ~ i ssues o f six en hundr d cor por i n ." lr. Oberholt zer quot es from Ja Cooke's " e oir "; "I ha v e known instances in h ic h b k hav issued ei ghte en or nent -five times the a cunt of the:ir ce. i tal , and , so fr s the public as concerned, wit h no otbe sec i t than he g oo of he i t itution ." h J. i ch i g in • ~a for 1 5 overnor 0 1 e e " t pres t • . rter s 0 the is of anks we a e l , C whicl1 · e a ctu 1 y 0 no t h i ' d r e thus i te:r lar t ibute what ... al . t h end rev o be or -e 1 t . ov rnor of Indian d h a . ol i n ut er nee· " h s e u tor c ne o i n to J ndi n n li · i t h , b b ot i n nd to e • h t h 0 0 e e 1 n • t aith a i d · ' 0 t g u s • ow- i ' twer1ty-four o.1rs h i on hi · ay to oome a ·sta oint o th n i on , to ci re orized byt e his bank in so t h e de om 1 at gi 1 ture o I ndia a . gal c r ~ en cy, au t h e l o i n lly loc r ot ., part of th tate, dif i 1~ o a ccess , ' 1 her he know~ o ban k i ng f ci lit ies are re d i ntend t ha. t his n ot e vha 11 00 0 i to the nd o o mean o demandi One c n exist r t pon 0 11r o re r en1ptio •" rd l "f b 1 i e e t b· t s i t o rece t ' er so11s who i 11 _ ave condi i ns ac ly d i it an .. ond er that such epithet as ' ild-c t" , "r a .- do 0 ', "sh · n 1 s - r " and "not- to-b -forgotte. - tum t il ere ttrib .te:1 to c h orthless, m tilate~ pa er con~lomerate? his , i ndee~, pl s 11 t he anxieties of a tremeri ous Civil ar, u est t • p r e·ssing mos necessit for the ation 1 B n i n 5 .... st of h Unit .::,ta s , to brin i bo f nifrmit, , wh·ch be sin o one could doubt it would bring. Other Cond ·tio O ema d h '.at i ona tern . ut there wer man other condition s whic rgue ve strongl i n favor o t h e ste 0} ) Oo .,ct to 1..he t e system. irst, under t s te systems , th er e w bsolut l y 0 gu ti on as o di trib tio becaus o he local i nter thic h contra d e o bli m 0 s, it w f or e ain o f rivate c it is t ta ,, k ere or , niz a, th oo d o th eo <3 t re not nterin 0 i nto the pro o itio t all. t h e m , t er w r e b 10 and accumulated ca ital. ew lan d at on t i 000 of circulation, w hil e O hio , it t hree-fru.rths o t he popu- lati on of t is section, had only \Pg ,000,0)Q. Second , the state bank issues too t he profi t t hat ri htl belon ea to the Gover - ment. Especially after th e suspension of specie , was t h is con - dition noticed because t he ta e banks , i n stead of k e epin g gold to r deem t h :ir i ssues , r edeem ed trem wit h t he overn ent' legal t ender notes , snd sod g old they ha d at an enormous profi . Thirr , p blic er , ·t c l d cert i · nl bee tablished and aintaine upon over i formity and nat io i nter st, hile at the sarra time, t is national ben efi , or c or1mon good, ou ld not de- stroy rivat e i nterest , but o 1 tend ~o make the t Litions harm onize with t he atio al i nstitutions. • r1va i nst·- or there can cer t a ·n y be no easo diminish o depreciate loc h n ional bond e i t y should ei ther b nk ci cul tion, but on the o er hand, ever thi e ae being equ 1, it ou d tend to in ere e both volume and v l ue, because of added sec rity fro o e central authority. he fourth bsi ef i t to be derived from overnn1en espon i bility of circu at ion would be thee tablis hi n o uit - able 1 c es of depo it or t e ublic a • t ill anoth ar li nt for he national ban ' ro abl the o , h · ch at thi period of the hel most to • a OU t t h ste r, r 1n n the eeli n t t tion a • \VOUl b • C o e • s n m n l. 1 olitica ni d ec ional t rac tic 1 • o sib t {0 r e 0 l e 1 n he re . avis, " h Ori )'in o t i o t 1 ' • 111 . 11 11 of these arguments were sanctioned by increasing se timent of the public mind; they pleased those who were en vious o pri ate corporations; they ple sed th 0 large nu bers who disliked the idea of bargaining between the Governmen t nd banks, and that at Government d·a dvan tage. But probably more than anything else, the national b kin g plan s tisfied the almost 11niversal feeling that the uncontrolled issue o state organiz tions, i n competitio ith Governmen t paper currency, was brin - i ng the ation to a swift ana per man ent downfall. Chapt r I TH FOillI - , TIO~I P .I CI PL and RL / y Rav· g thu briefl considered the situation t the eve of our re fi n a cial refor , it m y ow se m i n order to consid er t he rin ciple guided the st esme i d cid i ng jus t wh t t hat r f orm hould be . tat d i n its distinct ive ter ms, th , at iona 1 B nking yst m i s pr i marily two t hings; 12 ( 1) ov r n nt su er vision of banks, and (2 cir ulat ion based dir e t 1 upon t e s ecurity and gu ra ty of bonds approv e by the 1 Gov r nmen t • ome of it benef ·ts ere believed to b e, t o t he peopl at lar , (l} un ·formity i. security, (2) safe ard agai nst loss and di co nt; to t he Governm t, (1) dem d f o r bo ds, ( 2) me s for carryin on the l~ /ar, ( 3) t h e es ening of the dangers of gr eat mon eyed monopo ies, d (4) added confidence in he Gover ment, bot h t h ome and abroad • on acc oun t of the com o ·ntere t i n a central s 1 1rity d en er distr· uti on 0 overn tocks. 1 no n , i ory o B n i e United t tes 11 t • o • 13 Origin of the Principle The ori i n oft 1e principle is i itself very in- teresting, and 110 one man can claim to e its author. either did it spring full- grown at the demand of any emergency, bu t as the slow ad gradual g rowth of circumstances . s early 1 15 , a Frenchman was traveling in the United Stat , and being irri tated by the i convenience and loss o discoun t b exchanges , suggested t hat a ne - pro to sec rity m i ght be g ine if curren c were sec red b United ta o stocks. his c om en is of inter e t not aloe from its earl date, but also beca se fifty years later, a contri utor to .the "Historical gazin e" rescued the artic-e from the "Analetic l agaz· ne" and publi shed it it h the comment, that twenty-three years after it was given, evi York adopted the ver principle i nto her free banking 1 :v s~ and t hat hen the United States came to use it she took t he sa me argumen t t hat firs 1 establish d it in the pire tate • . illar d Fillmore, when Comptroller i n New York, sug est- ed that a national ban wit h t he sole s ecuri of overnment bo . ds might we 1 beet blished . contributor t o t he 'Banke .. a gazi e" i n 1862 rote an art ·c1e entitl ed "Outline of the 1 n to Crea rency ased on t e Pled 0 e of Certific tes of a a tion 1 Cur- ecial Loan Iss e b t he nite Rev 1 Davi ' n he ad u ran teed by a Bra ch o the Publi c 2 ~i nk i g Fund " • ri i n of the ti na i n ystem , p . 9 . Ibid 1). 1 - 1. ,.. 14 Another a r t·c1 e publis hed in the n , e,. l3edfor :rercury 11 i n 1838 proposed that one-fifth p rt of the ca pita of evar bank sho ld be loaned tot tate at i nter est of six per cent., and that evar ban] shoul be per mitted to i ss ue bills to the amount of the loan m de to the st te. This same article was aeain publ.shed i n t he " istori 1 agazino" i n 1865. The author, who sign ed his name "J. B. c. " knew not h ·n 0 the a ticle of t earlier date i n t he " naletic agazine". Seer tar allas • 1 13 nd lso • 1815 g ested i n in s a p l n whi c h , intended to limit st t e ban • h d l so t his i ssue ' same ce tr 1-secur d rinciple. milto , j st before becom · Secretary of the Treasury, conceived suc h a plan, an d Al ber al- lati i 1 31, refer i ng to t he loans of he Bank of glJ n as furnis i ng the b est fegu rd to the n ote ho der, also was h i k l i n o the same incip e o securit . u it i i mport nt t o obs erv that, hile all t hes e 1, n s evident containe t he g er ms of he lan tret different en s bmit-'-ed to ecr tary Chase i n 18 l, an w ich resulted i our present banki gs stem, t eleme ts which t he dev op the lacked at least two ver y vital s stem alwa s cont in ,viz.; (1 p o ~. er of the c en ral a t ori ty t for e the banks to co n f or , and, (2 t t the ce tral thority bili t y of t he not e b holding t 1 2 n o n ' Ibid, is tor of i n i • - . 11 itself as u e the r es onsi- 2 s c· ities • • lans Submitted by epreQ ntative Men. Leaving the remarks cone:ernin th e ly o i gin o the ct of l 63 , let us consider ome of the p s and rug- gest ions that came to t re ecre tary of t e re sury at his re - est during the ummer am fall of 1 1. fro m this correspondence '~e hope, erely, to In ivi g sketches ow the gene al favor ith whic the idea. of a financial refor as m et. Among th e adverse criticisms her e er e n e t t were reall signific t, an a t e .... '"' re er y f • d for all prac~·cal purposes we oul be safe • • i n s a g t t t e p opl e a s a hole • sl 1 . f of a cha nge. ere unan 1mo 1 vor he o lo7vi • • o 1n1ons ca fro so me of t he ost repres e t tiv . if en t parts of he c ountr ,r e 1 i n • .1r. • • Ca pbo 1 rit e from a Salle t .hat n i et er cent. 0 the 15 eople e i n favo 0 the • • enuss1on, 't the ove-~nmen , of non- i nter baring tr a r n ot e 0 , for he pu po e of suppl nt i g 1 the orth l e s ra s h i n circulation • rticle attr·buted to ~1eazar Lord d d ~ ov- emb 2 1861, es ted tmt h ban 1rs e C raged to • r , s ug e n- t h • ca ... it • nation ve 1r 1 n 1 to C h i n --·e11t oor to run, a tha the, depo t'"\ i t at stock in the r asu a . for secur1 y ci cu t·o to th amoun the had • ested. e 1n Is dor u h r ·t e fro t. Lou . t e f ollori n s 0 cret C a e: " ort • l . uce to explain to l . " h V ' 0 t at·on 1 in . " p t • • · 16 re at, 1 sting and b enefici 1 rev- German fello citizens t olutio i our m onet r stem ich T anticipat fro t he adoption, by Congre s, of our plan ." lfon so aft, of Cincinn.ati, wri e he ecret r the followi ng endors m t o his report and financi 1 scheme: ''If Congress s 1 oul:i adop,t your r ec ommendat ions, it wou d in itself, be no inconsiderable come sation for th ffar." .,.. Secretary hase eta ~ort to Congr ss r. Potte' lan. hu.s, from t ese letters re r esen tative of many , YIBny more , hich ecretar • re ce ve we s e t ' he he ma e his reco endatio st Congrev~ in ecember, 1861, fo a national curren cy secured b ited S tes lx> nds, h had the s mpat , o m n i nflu e tial e t o gho he at ion. his r tar ..., pr c ic 11 the sam a~ th f o report of th given to hi b .r. Potter i h i et t · of ad i c e r · t t en 1g- ust 19, 1861 which ·n subs an e sets fo t h h is pl : ( 1 · 1- low ban KS n b n, s du r t h riz ed , i n lo a st tes to s e- cure the 'r b i s b de o iting ;vi h he s · er i n tend n ap oint- ed b ha ov er n en t , n i t t e tocks, at the i r ar l ue t i n t he s w t re ban s n b rs i ew or ec e he ir c · rcul tion y de osi i g or St te, ad nited t te stock s wi h t he t te, t hus i th tock s of the Unit e Jt t si..._ of b a nJri on ic , on n io n 1 cir- cu io n be ecure • (2 o , o h · it is ne c e ar on 1 fo h n a tho iz n d a oin . u r n t e r ea r , hoed i h 1 ore i 17 fro m duly authorized banks and bank r within loy a l states , United ates stoc ks i sums o · not less t han , 200 ,000 from on e party ood hold the sa e as s ecurity for an equal amount f bills to be properl stampe d and i ned b· such super i t nde t, and deli v r d to the deposi ti b or ban er s. (3) This mar k , or stam p and turet o f s c ~ per i nt ende t shal g arante to t he hold e r the ills 1ss ed , t hat the s me are . ecux ed b nit ed ta e t ocks a po i t e , •it , an e l d b the overnment, an t t in c '- e t sa e sh 1 f il, to be r ed e e ed by the bank or an _ r issu · n them, the on d e dem d pro t e t, su ch s u er i n e d t 11 se l, u on ro er notic tot b n or b n er , and apply othe red t io n o s id b ills, th stock held to secure t 'e s e . ( ) hi::3 • one m 1 0- ~ o bl e d s ignated n i d t es c r c , as d · ti gl1is h i n it ro t e b ill i s ed i n the a .... t te , n ot thu s ec red, nd h ld also 1 i n l readil distin ui h ble here at si ht . a to be ( ~ It i ht e r cei e oth rr . t he s nd i d t b h .x vern ment i n ca e wher it · agreed or rovi ·ea, 1 t h ·s i s not at all s e tia n , • c 1e · l1t e coun 01 tne ej ices of t os re reli abl t h e f a· th 1 d o ven nt o ho t e ot 0 rn r t und r n i 1 h iv e . .:r. Pot er w t o r ge - ur i e .. 1 ec he dl e G ta e to e ec 0 t it h e ee 0 ven ec d fr om UC her e, · e o , · n thi e ' 1 n s n a er . • • 1 Ch er Ill 111 l · C 1 ost • ed iat e l a sent t io t 1 1 er r 0 n b ~ecret r .has ' the Co it e 0 ·• a 1d ~ .1 a d e1 nde il h i ch ~o co n . . C T aa i . i n 1 e1 • l 0 e s 1 ' nd • ed . "r. ldi a i r ~ 01n n p· C 0 - 0 .. 0 _;, 1 1 s nr .L e to r par e on i •,. r . di n ., th e bill, • re ~ r d . . 0 0 .. .. o S ·or 0 t U. .. 0 r en 1 n 0 r 1ow O n • I • t . e 1 s t . r . ' 0 . a n an o . n1 ~ r 1 ? 0 ·10 e to ·t on a l ) inc I t e c- • 4. n,. e t 0 ....,ec Jn er 2 ."\ t s 1J 0 s • Cl e a ' n ' h . wh • _ e 1 :· r. .. 0 ,. . (l ~ " 2. of i f b u 0~ h d . C ldi n )' ' T - .r. B 1 o h • • e 1 c1a 0 ent io n . . · cl . .,:; 1 Bi 1, i n r ( C r .n c ., on 0 s C e ~ . e l · a . r e l _en c e , 1 . ~ .. ' J h ., ul e o ec a1.1 e C .r ebr I r r- .. ) t , e r d 11 0 nor c 1e .. • - 0 J ll ) i n , ' 1 utates t oclts. " • ~ /hile 0 our di cu °- lOn Ol cu r C u tion ill he n 0 o ..... ' 0 1 r.iilln, ! 0 J; ~ lose i . 1 t 0 .I"' t h h ,. di _ ' bill 0 :~r • 0 - doL e or t at it a~ ot hing 0 do . th h - . or n que tio so S00 .. to beco ne a 1 • In Ioo 4 e1 s bill may be said to b e , .~ r . a 1 d i ' s bi 1 o ,., . fi ea • But otl . r · re u s co n i , ~-'-in o t h . f L ! ' .. ' r. t., or r , t e fri a ecr has , c or1 t · b t e ., r lJl ch t i I..J a a . " e l . ,/ or J' ,ra J o t h ' i. t i r 11a succe sho is t .. r. Jor b bee r qu a - a to co ult ilas ·- · til1ell, o~ . e v Y r it , o h . ~ 0 7 0 h . cb h diu wit lo de . l e .c-f r ~ h · s er · c t C rre ,C " i ll h ~ - re 1 t h. i e · .c-or t he o oo to d he fact i t o o r .L.,i ' as on , ~ · t ... e h he or u o t e e r ~ r ci 1 ., ot e ro . e em e i en h t h na e , i 11, a r ot see in rop iate io of t he his bi h h er di cuss d c · ' cia. , aft r ' 1, t h e e b oa.ir e11t of ecre ar , C J.as id a 1 st ted ·n hi 0 r por o~ 1 ,61. ... avi ~ ' ri i 0 • 1 ,, " ' • 20 Conditions Furt er Urge 1 Curre c L isl t ion . Duri ., t a s e s er (1 ·2 ' l ,. l oo • e r. er 1 n ro- duced t he bill into t he Ious ' s orn r y 0 or c J h a cl1anged t he si t uat ior. for opposi tion: irst, e rnilj ary it - atio ;a s a thing but enC O l a • then :cc l el lan' t..; 1 • '- ... r. en - - ' insular Campaign, th fail ur e near on , t he ba tles of Antieta, red r~ck bur ~ ad Chance lcrs ille a r ove that th orth a und rtaken b1 ~ .er t a r t h efor r ea iz ea, that its ace ornp 1 i sh r OU l a t or1 ge .. t h :c h a en \ it _ t he~e co ~di tion s ' n.: .. f ur t h r t porar r method for i u nc i n t 7/ar we e co sider e o baa 0 iC T 11 1 1 0 S m c l J r l t h i IJ 1 n ea :i a e fin an c i . l e e d s • eco1d, /'r. Li eel .. __ a oc- . casion 1n a t o Co gr ., ~ . , a l181 Y 17, 18 t to ur e the advantage of a u ·for, c u_ rr a es • 1 ... ai d. .e r ~n b j 11 be dopt ., as t h 0 1 a 2 . 1en t quir • t hira i n flue ce vvork of ,. er .. e.11. e ,Ir ...) •• • other frie s to b its ch · not rnaa • 1 e 1 ·or us appe it c ou l have bee SAed ' wa oppos e to t he ill an n t o ot vor 1 f o 1 2 V • ' "T c Or· · o-P the l bi , p . 72. C • ich taxe · , loans a all 1n ' l y • is ed t C 1 r 1 a rre b e e a s t o m t t h 1r e t r - whi ch el ed he bill alon was he a b e en i ndt c d b uecr e ar C f or sor in t e e a an ., h , .l a t t . • js d OU · f _ 1 h t 0 Cl l '" ] er 0 it s ow t - t to t ho d he n "- been er u ed b ,. . r . t e m e SU it w 1 :, h V lo tic la i s " ' • 7- a t. • 21 The abate ·nth enate. • up ,, herman ' s d ebate i n t t e f i d ummin . r . e him • the bill for t hese reasons; ( 1) it 1. t VO! l ;·o er e a market for thu c onsol jdate t he Union ; ( • '"' OUl on s a l furnis h suit b l e aces of de 0 it for pu l ie fund • ( 3} it ' v~ o u ld pr ev t i n 1 +. a "-ion , as r enb ck c o l d not, for t e ba ks i sued their curr en c on th ba i .... of t he e gr e .. bacl , t hus only a nd i ng to i fla ion ; ality. i mula te n t ion - Sen a or o e oy of s i n favor f i t , n"' he aid tha i n hi~ st e ad n curren c of their o n co - sequ n t l y to )a fr on 1 trvo to .ive ·• ster d bts . Se ator e r on .. n favor i n t he COUY) t thi s cu enc r e tir 1 all b pla i tead. e ato r oolit l e sai~ t t he onl wa to u - f or the overn 1en t o t • re i h and , en t i 1 , the co ntrol of t he c rr ncy of t he c o ntry, nd bes i de t t h e added that he ~ o 1a vo e for the measure bee u e the frie ds of the administr ion loo e u11on i at..; t he ost ef icient \ 2 eret th needs of t h h our . Te Debat e in the o s e . I n t h reli inar e at i n the ou e J.r. ~ Orrill op osed the ill bee e es i d i ai ns t t h cou tr l 2 'Co r e ion 1 lobe " , e • l , 1863 , p • 50- 51. " " eb. 1, 18 6 , • • to • 22 banks. an because lso, it ~' ould force s t. bon alr - dy in circulation, on the mark et i om etition ith nited ate~ 1 securities • r:r. urley of Ohio thoug t the leg 1 tender notes furnii:lh ed a uniform curren c , and con°id red it a ter to endorse a mea ~ r that ou a t ow on he mar et, state onds 2 now de osited as securities f or t h circu ation of st e b n u • Lr. -!alker ;vas opposed to too bill a a sa · a ha i ndicated t hat the s ste m ou - n ot do muc t the ood. joy beli e d i n taxin ~ b n~ ou o e is ence nt i r ly. er try s tr. Sherran, in the nenate, w s t be chie ~up or er of the bill, so l'r .... . ooper • 1 - he O U e s emed to e r the most influence t here . is ar :ur ent ma be SU ed up as ollo , • , ( 1) there is no other wa i n ich t he over J t y even t depreciation of the curre cy' for he st e ban • their s 1nc r ase circu at ion to be r dee ea b t e ni t ed tate curr nc t an t hus both ou.ld depr ec · te to .e her . ( I t · s it ill re red t ha t ) r. Sh er a as of • • n 1 on. , ( 2) evolt of any part of the nion wou d be made pr ct·c lly irr. ossibl ; (3} G overnne t benefits fro sal o onds. I n the fi debate r • • • • uldi n sa i d t h t he would vote fort _e i ll lt ho h h e di o look for i ed- ia e reljef. , ,rr. John B •• lle r of 1 a sa.chu etts thought t at a u · for currenc r ou ld b n a ant 0 e no muc h le ~ t h th e 1 "Co . 1 lob n 1 18 295-29 7. re ion , • , ' • 2 " n a 18 3, 3 2. • • - ' 3 " " n. 1 1 6 p . 8 -387. ' ' 23 conservation of the ion itself. y , ay of ener r ark in connection ith he ebate, it as evident that muc Qenti that to oppos the . ecr tar t was r sen which advocat ed t t hls i e, mi ht wor per anent an~ fat 1 resu t t o t entir m on ey rs e o f t he ou_ tr • Consequently muc influe ce hie otherwise f or state b nk s stems · s turned to·ard t h ·g ave bee sed 1 Curren c , 111 . Cha ges in the Bill . o e ver - i mportant c anges in the Hooper Bill, before i t beca me t e herr .1 r ct, ere acco plished b all this deb te i n Congress . to taxation . One of the most pro ine t dif ·ere c e pertains In the ooper Bill a tax of t o p er cent. h d be pro ided for, t he state ban k c ircu ion e i ng taxed, h·le the subj e ct o t h · s ta at ion • his met od di 0 t hat bOdjT hes ~te er eet th 0 pro ins t i tut i on s had oft man r fri nds on 8.CCOt of their loyal ort rl • t h r r. herefor ny bill t ax- SU e l ' • these _ nks oul not 1 jkel y a .... t the bond t ax for 1n - • assoc ·at ions not f • r bee u e onl ninet cent o _ hes e e as repre sente i n circula ion . Con seque t l i n the chang the tax on C!t t e bn .r did n o ap ) ear, and be irc u t ion instead of th ., bon t f e t ion . s r su t of r. Sher . n ' i r.flue , thr e e c n e were br ought about; (1 t h runt of n tion c r r en c r • 11 rr. • t - ed · , ( 2 t e r o the r C e O t s ix e d · , 1 ' , , ri i of t atio 1 ank i n t P• • (3) the right to est ablis h associations distribut ed among t h states wit h su itabl e apportionz nt, is provided for. Section 31 of t he Hooper Bill wa s take ou t and did 24 not appear in t he fi nal bill. Providenc e , st. Louis an d Chica o were added to t he cities to a ke report of t heir busine ss co a i- ti ons. I n t he Hooper Bill t her e wer e on l y ixty-on • s ec ions , while i n th e cha.n ed form t her e were sixt -fiv e . ection 31 of th e Hooper Bi 11, er tai n i t o a s socia t ions · n i · b u i n e s , n receiving b c t heir b onds un er cert in con di t i o s , was dropp e out of t he finishe bill, s a l so t h last ect i on . ut action 17 o the ccepted or , e o ,:) y i n · uher n ' s i dea of li ·t ed issue, l i mi t ed ti m e of certifi cat e s , ad app ~t io ed dis- tribut ion o f a s so c ia t ion s on g the s ate , a jrst i n tro :1uce here, a s e r a l so ec: i ons 62, 63 and 64 , h i ch ert i o the le nati on li z a ion of he s t a e bank • ec i on ' i ch Congre ~s t o changes a t an~ ti.rm, th e l a s of the bill ao. passed, a s n o t i n t he o i gi n 1 or • Onl on mor e s i gni i cant ch n ·e a p e r.._, and th i s , • 1n ec +i on 12, i s t o ke sh eholder 1 abl e i d i i dual f or • all debt con t r ac t d b the i r assoc ia i on t o he ar v l ue , of hr .... ea b them in a "' it i on t ves ed j _ n h sre r es . h ill B es La • o , bavi been deba d , nd h c . h OU t , h i r m ou t jn- d , h i .1 ass t t 0 ebruar 12 , v e o t en y-thr t tw - on n a s • • 25 Ero m the enate t he ill went to t h House, her it rema1ned on he e ker's t able from he 12th to the 19th of ebruary. motion to r fr i t o the Comnitte of t he ~'hole aving been ef ated , . r. pau ding , i lon spe ech defended it and on ~ebr uary 20 j ev n ·y- i s an he · ~ r e.; id n t t h uLa . 1 • 10n urre c.,. Stoc r a 0 ~ -ro ·a passed , , ~thout ~ e dm n ,1 sixty-four n ys • rove the ill e .Jr ar C ecur d by a led e 0 or he e r e t· on her eof" b: a vot of 2 a a t las nit d 0taL e b ca e la t d our ,a t iona l Ra . r 1 g s A em on i ts event ul career . u ary. Briefl st ter> · e i d t he Bill to co n ain the e re - ation : ,irst , it ro ided circ lain n ot ~ s curd b n it •..J [ t e b o:n d s , a i ~ued y an offic r of the r rea ur 1 ep rt t, kno n as Co pt oller o Lhe Curr n cy . econd, the amot nt of notes s all note c ed n·ne t r c n • of the bond ·a O..:>ited . Third , nob n sh 11 bee t bli hed i h C pit 1 Of than t 10,000 , exc pt i 1 c s h vi n . · a o . , 1 i on of n o mo r than 6 , 00 inhabit ts, ~ e ~ ab n a o th .)ecre tar of he r t 1 1 ,;50 t 0·00. 1ourth , a 1 at _ i . t muc, t be i n de 1 • no " , i befor i st le or of he an A: !all t n er c e e or n iz e d , ith t he ap ro - ca i 1 f n o le cen . o the capi 1 b 1) • 0 t , an d t e re o e m ou nt, t it t t ' P• 6-97 . the end of e ~. ch mo t • ifth, t he bond deposit shall be not 1 less tha one-third the capita st ck, nor les t han . 30,000. l Conant, "A History of odern Ba s of Issuen, pp . 40 7-408. 26 27 Chapter IV S OURC ~S O TH~ y • As no one can cl i m to have produ ed the • i al m o. r1 principle of the ational c:• u ste ' so no banki . cor or tion alon can be said to have furnishe d it s ract·c 1 Nor . regulations; i n but it • beyond dispute that t e 1S · ew Yor ban rin o- la ;v 1 d al ot ers . si nificant co ntri" 1 t ion t t ti f t he 1n • e e a op- tion of the · ational Currenc 1 ct, t 1 e not of e~ or" b n s .circulated fre ly, an ere a cepted \ itho t i cou 1t even far from their places of issue, and here th details o the syste of that S rt ere ot known. his si if ic f C t tr cted no small amount of attention, and as a result o hi s co fie ce the eneral pri1ciple~ of the fro the Free anki g Las of • a 1 ona ystem ere dra n lar ely Y or ,tre principal if ·er~n c e b tiiV e en t he t; o s, t e s e i n g that t he l e York p 1 i d not guara tee the f 11 payment o e note i n circu a ion, bu~ mere- 1 held the securitie of the ban a nd ol d t h hen it became ecessary; bu if t e note lia ilit a gr a r ~han t , sec r - it, the notes ~ere red e ned at .ro r ta disco nt . hile i he ' · ational I! stem t e over □ent s cure ful pa n t o e ri11 cipl e o f t h o fu ed r ser e i n t he was dra n , ver likely, from the Loui ia ta e B k . t i n ct iv e feat r of t his b n t h t 11 liabil.ti 11 not s • tion 1 ct he di - be c over d; l i i t . l t tes" ' • • 28 one-third by specie, and the rem i n i ng two-t hird b n i n ty-day 1 commerci 1 pa er. But t he Bank o Indiana cou l d ot have failed to i nflu ence h e m n who fr ma th e ationa l i ng La • an a effec t s o · its t r ul dist i nc ti v principl es -- nam ely (1 the cash payie t 0 capit 1 ' ( 2' n ote • liquid sets n issue on a 2 only -- are prom i n en t • t he io 1 0 stem l D a • Of course, t he pr in cip e of t he Jafet nd 3 st rn , hich co ntributed o ch t o t h success of t he ew Engl an 5 bank , bor e oO e ev i d nee o i fluenc · n t . e ct of 18 thot h i n the ct t he . r· c· p e on l y a use , t he f orm itsel f b e i ng m od i fie d . rom the ab ove account, i m be seen t hat t he ation - al Bank i 11g : Jystem eeded ou t the bad i n the othe r syst e s , t i n t he ood s it as ca abl e of be i ng adapt ed to the needs of the h o r. ecurity and un ifo rmit1 er e the gr eat b es~i .gs hi ch soon becam e · den t r e ul ts o the n eJ. l a • 1 Con ant, " istory of od er n B· an 0 1 ue " n . 385 . ' ... 2 It is becaus thes e f e t ure of t . stitut ·on t hat o · 0 l h ad suc l1 phenomena l succe s as a ank of t t e , hil e oth er of j ts Ki n d fell al l ar ound it. (Conant , 86 . 3 It may s eem i n o de to s t te here t hat t he re ons or t he failure of t h afety .Fund i n e .., York in 1 3, were u e t o the fact that a slip of legislatio made t he fund cov r liabili i e on all t e as .... ets of t he f ail ed banks, i stead of on t h cir culation only, a s wa r eally i n en ed . (Co nt , 7. 4 it he m ost · astr ou s (1) opportuniti e f or o i m pro ... e s ec· r i ti e Stat s, P • 15 . de f ects o · m n o the over i sue of ote , ( De y, "in nci al ate st D ( 2) I 81 i . · s tor of th er loan nit ed 29 But it ust n ot be supposed t hat this system was perfect nor that it would alwa -s meet the norm 1 demand of a grOi'in nation, to s nothi g about the fi ancial emer encies that ere to so t hickly stre1 its ath of progress .ith disastro s fai l ures. With t hese last thoughts i n mind let s urn to he rl ew System in its very begi nin of activities and follow it througl1 on e brief year til it co1 .... to its first radical change hich pra.ct·c lly amounted to ree actment . Chapter v. THE FIRC,T YEAR O I THE If EV SY T ; • At t e beginning , ugh . cCullough of th famo s 1 Indiana Bank as appointed Co t olle o the Currency. It • 30 was someYJhat unexpected hen 1 r . !~cCullou h as ap oi tea to this position, f or v hile Pres·den t of the I diana Ban k h e ad gone to . e.shington, in 1862 to oppose the atio al Ban i 11g ct. It is true that his attitude had bee chan ed toward the atio - al System, bl1t e en so, the fact t.ha e accepted th appointme nt of Comptroller, dre\'l out no small amou t of co mrne t. Banks First Entering. The first bank a thorized nder t . he e Bankin aw as the First ational Bank of hiladelphia, several others co . . the da June 20, 1863 s a rue, the ban.Ks l 1n on sa ' • 1 the far West acce ted the sate ore readil than t os e of the ~st . The reason of this roo.y not be far to see· ' bus i.ne ss and ca it re both on the t antic Co t, rd the old, e 1- es a li e b ' s w e ro i u der t e st 1 s, an 1 h followi is co pl te lis ugh cCullou h, re~ a Clar , enry w . Cannon , v. L. Trenholm, Eckels, C a • . a\v o, .~ • arri t Co pt oll r oft Curr C • ' . ul , Jo J E. • L C • B. id el , d a;vr • the .ational ys tem was n o mor e attr ctive to the an in an respects, decid ed l objec io 1able, thy rem ained o .t side of its regulat ions . It was source of gr eat disappo·ntment to all advocates of the at iona l System, that so few of t e ban enter e d it , a d still a greater disco r agement t hat among t hese few, scarcely any oft e big i nfluential banks could be c ounted. only banks of . 50, 000 or 60 ,000 capital a li ed . As a rule, h se re not in b i g citi es and v~er, t eref re, i for o otler reason , not suitabl e pl ces of deposit fo ubli c m on ey . of the .purposes o the System s so far defe tea. ing statistics will show t he tt ·t de of nd thus on e he follow- ational la; on Octobe , 1863 , on l y si xt - s i x banks had entered t he S stem, nd on November 19 of tre s e ear , onl 1 one hundred thirt • tate Banks Object to t he S stem. his, of cou s , wa discou ra i n an be done tor mov obj c~ions o t e iona l re ul ati on • opi ions, ere iv n as t o hat t he e objec i ons e e an d ot a f ew g es.._ion , s to h ov to remed t he diff i cult er forth- • com1n • ·· r . 1cCullough st tes so me o these reason for the 31 g ~er nl s sta · OU t; ( 1 e n re hen io hat the , a iona l S stem igh prove to be r e itio of the fr e b nk1ng s stem 1 • av1 " he Or · · t 0 he atio a i e " • 9 • 32 of the West, ich had been a disreput ble fail1r i (2 the opin ion, that i n beco i n nati onal b n s , d is .. _ui notes se- cured by Govern1 ent bonds, their interests would be so identified with the interests of the Governme t , their credi so de endent upon it, an so mu h ~oven into the ublic credi, t hat they would be ruin ed if t . he nio sho ld not be r eserved ; ( 3 ·1 the hostil e legislation o Con res, or the anno ances to hie they might b exposed by Co ~gre siona interference it h t heir 1 s i e for partisan p rpo es; ( h r quire e , t ti o e to be co e atio 1 b nrs, t he must r elinq ish t he ir name 1 had b come attached, nd be kno n b numer ls. o vh ich t ev 'f.l , r . cCullough t he goe on to say tat heh d little diff·culty i n convincing the b nxs t t fir s t hre of these objectio s ere o r asonable. sho ed t t th e ,ation 1 st e lying to the f ir , he r q ired the c pital of it to be real; t ir circulation absolu e l ecured i t h ten per cent. 1 nargin s; in case of f i l u e t e ot es ere all re d J ble, a~d 1 t, overn ent ·nspection, to r ven t fraud, as ass red . hese assen ia ls, i ill b re em b e t he t ban ~ s d·a ot V • t o h s eco n obj ction s e b i{ S er no . • no les denen t po t he ov r a soc1a 1 , e e io or anizatio n • Con e rni h hird r ument, .r • ~ c- Cu lo h r min d d b nker t t te 1 • 1 tio s s a t to b un fa or 0 b n • g 8 t h n a t n ro a l r ~ - - Con ' T I e ' , • 41() . • 33 even more so, beca se local i ter ests were more apt to m fluence t e sta. e le gi lat ion. he frur h cl i could not be d enied, t his w s o e of t he u r oo s of the ct o 1864 . he se s ug'""e s \. i ons fr om 1 r. 1ccu1 lo h ar d to c orrect elpful for an d ... rs n din 0 o the si tua ion , but ther a r others stil 1. I ener 1, th la s o t he ational st e er e too bi a in the n n 1 ies for lack of obs rv .. er t o sev re, a a too numer ous . Chase,in . s f j an c · 1 r e- o 1 6 ed •'- • 0 ' r t he adva tag t t tre n V s te a lr a brou h t a ac- kn o ·1e i n . s • fe t io ea re "'0 ed th Con ress 1 l ' r uch chan oo. ld to tr t . . ] es as e ce s r c.1r tio tate b nz:s n o .,. exis • i nto over ch 1~ 'it 0 1 - n n ' rofi both t he b .. an 0 er 1 . as h ge 0 TI 1 TI ' e lie . Congr . . at . cret r u as ll1 1 u an due ti the . ·t ion horou 1 d i se , bo • nK l q s c u 1 n t he an . t he e a OU n e . . 1 34 Chapter VI DI SCUSSI (] .:; L.i.J ' D I . G 0 Before th qu s t io s s ttle d t he t hree il l · trod c d a e ~ i n · t .K i t \ co _ l d ro b l do o e er t n o fol lo d t e e 1 i 1 ' • i • C l S io a it a carrie o i Congr ess . eba te i e se . , ,.r oope ' ill a l . t d . ~ s tak ... - . .Ir' 1 ' ·; up I ,.. 2 te ... • eport . t he ·. a nd Com- re , VJ. g 0 ., 1 n n t..,; ittee 0 \:arc , 1 • r . 00 er hi elf. r e .. • ch cont ai ne d . . 1 b t h 1 fil l e .:> e 1 1 e e en • 0 1 th t . 0 t e. d s t _ i t of ... th n m n ea. • d t h 0 • 0 0 l 1 aro e • 1 r e h e b • 1 ~--- s l io 0 1 . s lo~ { 0 re J n i n • • ' e . . ..,. ( t o 0 J 10 0 I I • .... • ' • b . r q 1 e l s o ,n 0 e n on L 0 1 . . ~ ci • , a oec i 1 ~ ~ . t •. . ia · n O I' 0 e 1 e 0 1 - . . . e c, t o 100,000, and r 0 . 1 • . 0 1 u 0 0 0 1 • • ' 35 ( , a .. to s -ri e ru t t he i i vi 1 li i lit; co ncernin 1 t e of Co er o o • ,{hen t ill s r o e · ed o t e o .... on 0 OOD t he e i t o th Co · t e e of t e '.' o 1 v o the ta t o f t J n i OD , ·.1 i Ch 1 it! h r q t t _a • 1 e l1 n . 1 r • S1 OS ,:, 0 f • i n _ ._ t . t '( C Ot l J ef o he t a i ~ . ~ . 1 e ru ..... ·J e u s on • . .L. ~ s .... • t o~ he 1 r L ue n r r a i n:: 01 r. ~ Corr tro , 0 .cu 1 ·h t h t s ' . e ·r ,:'\ . 0 1 ,.J • 1 :. ot 1. it . • - h., . .L. 0 e , T r u 1r1 J 1 0 o · .. e - . retar f _reas u~ y, -...; 0 t . ~c ..,; i 011 , 1t e 0 I .• - ... t o o"'- r i . out 'o r , c • .a t I e e ~ e v r ' 10 e uecr l:J 0 .L t L r ea 0 ur 1 T • e ~ ir " 0 n .l .r . 1 er ~e - ., a lo n _ ch . or h : · oo a oi ri t . "' h ill, • r i .g m .. r e ·1 :n Yj ... ... e us.., ..p C s . t ~ It Cb _e n 7 0 s o 1 rr 0 • mor h i..; ai "1 • 1 , 0 lo ol ... e l L 0 a .n e l '-' to t e - t h - o-P" t e r el r 1 a for ,. i . l e th E-n e 0 - l l g r n r ,o e c c· • r- -T JO a . t he . . . .. ia i lit lJ J.. l 0 se e n l ~l cl s ru h 0 0 .r e c e of T' ,. .. 01. l 1g e nd de ' ,, e I t , l o . t hat ... 1a • OYJ 0 ,. ' 0 Q ec 0 ~ er - - -- 1 :r ' i c-, tor , of . • le . t 2 " 0 a { n ' l.Il n 1 t J. ' • • 2 t 0 1 ' n . lo ' re 1 1 12 ' . ~ t , • • far ~o s . n t is b il s . t ~ • s ·11 ct ' t 18. t ... rev - UC re d • l o • ed e J r 1e a . the di ussio cl ... 2 pou con11r1 ac c n 0 • ,. Broe -'1r. an : r. , >..0 · too ,.. occat.;.; l 0 e J.>r t h . a ec idea 0 .osit io ) +o t ill h _. • "r r oolr. ir t1 01n • ... . ber ted ,irr C as ' s • . ... confe ·ser fai J:."' th • • po lC ' n i..; 1\,A ure sye e .. r con e din h . .... 1 0 r .... . r . err an 0 j ec t d 0 h e ill for r ea 0 • ba ., he • 11 T . 1 n~ e Cl ' ' oppo e;, e ti h ClL J o l 0 1 e l hori t ";it . 1- tific t ~ ' 0 a n za ion of ot er ha , erf .c 1 1 ·i tin t t 'ti too uc h O Vl . • r , Si g l . h sa i - . -r also op OS ... id 0 t i . ' _..,._ a ex l + . 1 an { C i 1 from ex 1 T o 0 quo • _. a\, 1011 J1 • ir . , n _,· r . al 1€ t i r:, off . n r r - ne 0 .. - r en. r k , bl n •e tr. es e two e . tl ~ e • . co ce 1r h r e .. i re ,. s. 11 0 cap it 1. h · bill cal l e, . . of :o l ,00 t o b ..i. or e. . 1n 1 UI:1 bus in e • ci tie hQ 0 abi tQ no not le ' na 1 0 ' , t an 1 ,200,000. ... r. Kassou 0 . Iow . re con a ha • citie s of e ... 1n t 0 j . ha it t t t b co l d 0 b . 0 mo e n ' u1n . with ot e s th . 50 00 ' ' , ~ t hat i t r ecuire r ·, t 1 thi cap it • '.'I . · .r . - el log·"' e l. e e op u or u ..... 1 _ • , ic h i , •a . o-r t t ' • th e 1 OJ. 1 a en 1nus u e - • • t er1 .... ir • 1 to • • . - t a qu1r1 n C 1 81 1n . 1 r e .1 towns needi b . ., n o . 0 capital, n V n l requ 1r e a th r i -n • u ici 0 g e '7 per f ec ... 1· s cund 1 i n . her so i n er e r r a a :ir, st .. r • {el l o r ' ia e on t h r ot nd t t " r e s le capital" s ha.: l d . a • re ul the en d to the e re u1r ' ad p e ·he en ' 8 a ., 0 t .a . di~- agreed t o. er u on he .A. ou s e djour ea d he b .1 t k 1 ~ ai on the 25th . On the ~5t ~ r • rook a a e t i n ith mber 0..,,. the Yor , Cl e " • for a h . t t - ffi r i ng OU e , u r . oope a entir· af er 00 4 '"' bee s • h he n l e e 1'l t h reed ;vj t h t be Co . t e e • a end m e nd th l i n , on l , r eco ... . e a • h offer .. o 1011 t at he Co e did ot adopt , s t h o e a o ,_ r e o or • n the t he Coo ptrol ' il s dropp r., b ec u of·i ce t o here · 0 h 29th ecti on 7 va ret to, n d • r ,E. d n to, upo "'r. 00 r' s t i c l , b k s · it h ca ·ta of ~~50 00 of ca . i tal n be st li h rl upo the ap r of t e I t ·- \.A. ' ecretsx • r ' r1 citi I os e 0 u_ tion did ot C e , 0 inha ~ i tm1 ts . t a • .. r • .. OSQ w 0 r1 e 0 the 0 "wit h th ap- nrov e.l of b t h t • los l ge~ l OD .,._ _ • - 00 )0 s a en~ nt s ed . ext, n t te pt o ro hi · r lett vs lot , 7 i t r: r ir 1 2 "Co r s i o ~al lob t , ~ L rch 2 , 1 '± , p • 1272-1273. " " ... r . , 18 4 • 12 7. n t hat .. a director ust be a i tiz en . n a ttemI t to add to ,..-,ection 8 , a prov· s io n 1 38 lowi n bans to deal i n forei coins, • Th e Canptroller w s allowed to it hho d certificates wh he ad r BA O n to sus ect • that t he associ atio n co nte11 la t ed ot er than 1 i t i t e n j g· b si ne s C\ . ever 1 all to he eff c t t h j d ti s o Se t ic•n 12 er e o fere, h se r it f p r o 1 stoc holder s b · i ncroosed , b c hange t o r e uire no .I f or con ien c i g bus ·neQs . le s tha n 1 50,000 to It as agr ee t t liab .. lit he e de osi t ion 1 b f s be- m a~,r issue not e l ess tha fiv dollars, pro id ea that 11 under tha denomi ation s hall n o t exceed one-s i t h of h tota issues a d tret upo t ere umption of lars be · s ued . e c i e , n o n ot es un d er f i v do - he ext s ct ion o i m or tan ce s action 0 , h ich ·~r . lain e want ea ·t fixes t h rat e of jnter e t o b e char g • to b t he the rate of t t . h icl1 t he b k w s sa e a s 1 located. ._r • Eol an a nt • ,.. 1 t be a unifo r m r ate of i x per cent . ~ r • _ellog ,; • s 1 favor of si e r cent. , ut nted, above e se, unifor m rs. te, e n .f t be se en per cen • e d . C ssi on telJ} d • a h 1 e Vier 1 ~ e U1 e , ev- er a d n t ,.. r. o' s J V SU of ch e , bu it as fi 1 1 ed t hat • • r te of e er ce t. a r un i orm 1mum en e char · a. ----- - - - - --------------- --------·-------- 1 ne on -' r e io lo e" t S 6 , • 133 • 39 h next discus io n o import nee ~as .on ection 32, co n cerni n red empt ion. r . Hoo er ir1troduc ed t he d eba e , n wa ted Detroi , Pitts ur g , Clevela nd an 1 bany added to t h lis t of re aemption cities. ro oklyr1 and i 1 aukee , among oth . ci ti were a.I so s u ested duri n t e l on argument ht:1 ol lowed. om ere in favor of ew Yor being the onl r city o f r ed mpt ion, so e wa t d all bank to be requ : r d to have fift een per n t . on d a t all ti r£ s, hil e sil l oth er ere favor of l eavi n the en- ti e section unamended. s a re 1 t o t h d e b , howe Charlest o nd • ich o n d · r a. -- 1 ea o the ljst of r edehp io n cities for a ional a ociations, but herJ the Houc-i e as e bled on th 31st it tas d c-ided tat t e pro .: sion i regard to t hese red empt ion cities shou ld remain s i t a in the for er b ill. uection 33 was n ex re ac hed nd ,rr . all propos d to t ur n all n et ro fit, over ei t er ce t ., · n t o t h e p fund. e the n proceeded t o t ell a story illustretin hj opin ion o f a ban put u11 on a pa er basis. e said, a stea boot n t dow n t .. e r: 1ssi sipni _ iv e , nd ·ter pu i ng i nt d oc k l OD g it s co u r e , of..cer d to bur a pile of wood a d p f o r it i n Il l i n ois p . er. he o ·ne 0 the ood sai a t t h wou d a k pro p o • l · on ro - vide g o cord ar cor d of hi cu~ r • ."r St evens w nte t O a..; r ·ke out "net" befo 'profit', .,d his sag eed o. ris iold w nt ed dd t t h ct ·on h "no ~ . • a '- r • 0 s rr l 1 sh 11 b d clar ed hil e uch ur l us do e not O U t t o t t par c e t . , but hi g io a los -. t 0 ct ge ' Sections 3 5 and 36 ere disagreed to and the n xt important • l ect o 39. r. EoorJer wanted the ben c to rune drre nt w a be proh.bi t from pay i n out all bank not t ha er blow par, or t he n ot es of b nks n ot redeemed i n lawfu mon e , until after July 4, 1 , bu t at r • e ec: an ' s gee ior, t h 40 exten ded o -r, a nd the amen drrent pas ed. e rea l pu r pos e o t he change as to perm· t banks to choose what n ot e t e , would accept, for this ou ld radually r e~ult i t 9 de ption of st t e b n l: not • But fi section was drop ped out. , upon r. Steves' su estion, th e e tir · r. lablf iscl1 wanted to c hsn e ec- ion 41 to t..J to allo amend ent w s los t . he s a es o tax a ional b t e This , ho 1 e n means . , id not a th deb r. Eooper w s oppose to . on t he ta sec e chan e i n fa- vor of state t axatio n , an d said tat t.r.e la , as it as ~id n ot t ~ p ar son 1 roper . ·nve tea, b t onl the b n ~ s t hemselves, a n d he tho 1gh t h t was good enough . ... r. Allen w ves ted i n bond • st te taxatio even to the exte ,t of mone i n- r. rin e, 1 t h o ·ht t h t it h a uthori to tax Tation 1 ban:s, t he states would tax them ou.t of existe ce . . ashbur n f vor ta . Unj t a tates bon r. 8 0 1ng eve ' but disa prove OI al lowi , t he t tes 0 0 it. inall , t e ,. t s h ~ d a • , r . e rgue 1 t thi a end nt , it as lost . ~r. ant a this n rnen t to re a " . 1 li u of ati o a l taxes" , . te d 0 r . ab eisch' or ' . li eu of other 1 n ' t X " but a ta t a e e i n los • 41 House ca taken up. The tax-section debate as pril , and hen the t ogethe:r on the 2nd the Currenc~r Bil 1 was aga :in Sec i on 43 · as cha ed tor liev the reasurer from the d ty of de roJrin the redee ea notes of ljqu ·aated banks i th sa e manner as utilat a d o rn ou. n ot e • r. IIooperthen c e for , ,ard it a ame d et on th ., fort -- fourth s ction. e wanted it to be nade over so as to llow s ate b nks to con · n t o h , r a i · n 1 e re a their stat r gulations. an o jec ion . e re 1 a·a el g ; r. oo er' r. Randall o enn s lv nia saia hat . e de t 0 or t he pu1' o e of fa ori Banjr of ew Yor , and for that re§.son he objected o it . ut h fur th er sa i t b al he dvan tage s to the ew Yor ~ bank, t a w ld be g ined by ·r. ooper ' en n t, ere in Section 63 an a, an t ro ·e his oint h d the clerk read tmt sec- tion. r ca "I • ,Jee e on th., grou ds that such pro i ion Ii:.) t h t 0 ,.r. ooper a1 ld tend o pro riuc a ongrel ste of nkin d r e no e t 11, b ra h r the 1 ck of a ~ ste • . r. 1 e anted hA Ban of Commerce of e ork to t. ve or . • r ivil eges . t reg r d to exem t ion from a l e lia iljt , h n n oth er b n • r. romall h ou ht t 1 ata -e c r- r s shoul b annu led e the b ks u d t m be- C la ~ 0 na ion 1 b e i n , a r eco r of h i n i ghe r he ban 0 rtl·s d · s r h ban B nk of Comm rce, an • o p r lre d i h its t ·t de 42 and assistance to t he Gover nrrent, in t l.. di rest n ed, as exceed- i ngly praise or hy . By it~ articles no incre s e i person 1 liability o s oc 1:holders c n b e llowed, but its directors are in favor of c oming u der the i .. a ion S stem a n,. h la "ge c p - ital w. ich t e b nk ossessed could ot help but be of gre test advantage • . ~ r. teven s r11oved that th e Co itt e rise for th • pur-o os e of closing the debate, a a tret whe it shruld sit 81Tl, t h ta ever al d bate be clou d in fi min es an th i n t .... \Vere atten ted, bu. ever t irre it a o 1 r. oo er 1 en dm n iJ i ch f . a 1 lo -• V\a cha g d o i nc r ase bo1 1c of b n s re- o. c eivin de osit fro t Governren , and 1"r. olman wa ~ t ed this sati e ectio che ed s o t be d e os its could n ot ex eed the 0 over rr,ent bonds held b th b ; it w s n ot ·ree o. ,,. r • ~ o tt e 1 l ' s CA men am.# n of t h s c t i o :n s t h · t sh ou. l d ke the br,.nKs i nancial g ts only, to the overn e t passed , not - . hsta d · n . the act th t there was o 1e obj c ion o i , on the rou at t b k givi 1g t he curi t re ir e o o m i n o th s s en er , alre a i 0 V a 1 ce or r ed on . n ifo rmi y ; Oo • e ri c e t o e a. r la c ~ of ep o o i • ... r. Broe r equ ·r to s a notes to e sa ·a · a tern 0 , os on s nee e to d d hi 0 d s cur V r hi ' h a e r ect m on u i on 5 nd t e o i ee r o 43 until r ond a. , pril ' h n t i'O sli t C i n cre • t l n · e SU erv isi on of t h Comptrol er \Vere m in ueC.l..iO 50 . ec - tion 2 s chan g • • n t aft er 1n Sl X agai a ten te o a to al OV' associations 0 C 18Il g e t he i a es enter in ~ th ,,a"'io al Syst e • . r • olman a state tax cl us to ec+-ion 2, but his « r. o o er t he n r opos ed to strike out proposition faile d. ec i on 6 a 011 t t Ban - of Comm u-c e of ~e York s.nr i ns ert one relievi n administrators, executors and eu rdia f ro m r son al liabilit for m on e y u der tmir c r e , in ves ed in ban k capita , men men to wit hdra dafter a brief objectio n b -r. Cox, . r . oo er's 1 assed. r • .- ard pro osed a ne sect· on o re uir sta banks heir c ·r e "'la ion. e offered th is c ange in the bill b cau se he felt hat n t to re . re his OU. a be O CB~ e inflation. . n1en dmen - , h e er , l. ..._ '\V lo t. (' w lr • Blaine ow r et to is hob • he . eres t • a a Jted r s cone min JJj sec ion to ha .,~ ., her e the cen t . • . a en n1 n V n er r e l V 1 ec .. io 1 s h 11 e la 7ft1l wher he state h a...: est lish e~ 0 fj rate, b he b nk sh 11 be b o ·n d b t e st e a her • u l tes he • t er f ter . sio na l re 1 Co so e 1 "'cu n • t js chang l ain e's • as ed • 0 ' r. r eco e a 10n . • return ed st t e t xat io ,.. 0 lSC U ~;lO n DO T 0 • · .lr. C • 1S 1 h h s tes h l d e l lo ed to t a ..... 0 C • c.1 . 1 on th . C . • cir cul a t i O D , th hi 1 b e no hi g·her n ir 1 • - t . the t . the ha d in idu s. :Jldr i ge .. 0 ~ 0 1n 0 1 ~ r . 1 "Co re ion 1 o e " ' , 4 • 1 1 . felt , tha on gener in s ti tut i on s w s bad • t he nited States n , . u1ct . .. usua l 10n m e Co it t pr il D' deb t r• '" li 44 r· ci l e~ , sts e taxa io n o na io 1 anl,.s wer e er it ed b t he people of no b eople of t l1 e st s. ' 0 fate. e rol,,,;e d • 1 n ' 'fV D -'- r on it -a to one • ut . • 0 ot r C a .J or d · s c u s\,., i on s of ~ artic u r V lu ..l ol l av· e ' l l t il t h fi al r eadi1 oft e b i ll, er e so f e~ i port a t substi Lte e prir~ed un i for m r t e o se rJ en ffr • tev., s s· g~ s d , t h t • S 1 TJC e tber e 0 . • i 11, h t .e ~ 1 11 a i ch 1 ~ 1 be t e . e ' e -c eT> t t .... a ce t. i n t r est be . s ubst · ut e ' n~ not .r . 1 i e's cha 0 e , tote effect t t t e b n1 take the · n t erest · r escr · b:\d b t e state wher i t is loc t • Cox t h en ~ "Ho bru t st t ?" t 1· as1 {e'" , a • r. ve . ' "That • ft OU t a l so . " t s b ti 1t a the 1..., e -, ,,. ... ' deb t :;a llp s ct io ~,. sec ,1 • . 1 1 ~ en t .. e l -4- . 1 j ' V. t l n 1.. 1 t h i nter ec;t s ectio ... a e che' t where pon , • Bl i n e' an _ j - ment bei 1,:,- - pas i...:e~ _:r. ooner .... a ot h ~nfl e tia f i en a..., of t he bi ll op po s er it . .. r . tev 8L • J.. be i d 0 7 - bl e . 1 L ..,I h"s .. carr . a d n ot • r 0 till ... ir. J. 0 }) r e n - bri 1 · t lt of • a o n 0 u e ri • e n s • it~ ~ t l '" t it s ag • ought b fore spee ln vor n~ on e w n t ous l"r . oope . h t t e only i portant Change Vl s e • sa • • 1 a· 1 taxa ion , nd as • to o 0 h r a t 1 ec ion re 1 , lue hare • the s 0 iatio s coul be ta ea. t st t 0 1 n t b t t hi -t ha ot h 01:,er - . t a no r r 0 a .. ' it . ·ae • t . n i tea n 1 r o . 0' C a n e , 1n tJt te bonds co uld not be taxed by the sta te . t o r estrict bank s from l oani n o re 45 i..r . ~ashb r t he r:nov estat security. Both changes were accept e d the bi ll pass e Apri 20 , b e of 1 sev e t · - e i gl t to si xtJ-three. The Bill Before the ~ena e . lmost i mmediately after assing the T rus, t he bill vvas made a spec.: 1 orde for th e 26th . On the 8t h o pri 1, h owever , a bi l simil a o t ... e Hoo s Bi ll, d been i ntrodu ced into t he ena e , and it as D O \Y r ecide ' 2 sidered the 2 6t .. of pril • tbot sh 1 The enat Bi ll on cur r enc ~a 1 0 . 22 , be c o - on the 26t h it w s taken p, as w s also the I ou s Bi 1 i n c onne tio wi t h it , an d t he C o · . it t e e' s c a e er e di cus~e one y one. The first que .,_ ion h aros e , vas i n ectio 1, nd i as de - c i ded t hat i 11ce the reside:.. t 's powe~ · o rem ove to t h e approval of th e , enate · t) ot her· case t ha s not li it , i t shou not be l ere, a so t -~ords n y a D'-1 \ i t h the advi c an d co nt 3 of he ~ enate" , er e stricKen o· t • h Co m · t'-e of th e ~ ."ho e . a stop ped • th re ul ,r o f he dment · der • ,. her pro 0 ' Ur a un co 10~ .!.r • an • a g1v 01) or it t um up the pr inci pa b an : e fro n t he l a · 0 1 • _e said t at n a 1 t h pr ov i ion 0 last ea w r e retain ed n d ha wh· 1 e h ere e ... e ~ ood m y ver 1 - 1 ox ' , s or o B a i i n e ni es t n t P • 25 • 2 '' Con res ion lob e , ri 2 , 8 , p. 771. ' n t .... • 1 • r 46 . changes an transposi t i onv 0 re he e n n cl re , t er were o nly f e · n i fi c n t i m port an c e • Th se he enu erated as f ol lov,s: Fir st, ·t provided centers of re ption, the old la r equiri n"" redernption at t e crunt ar of the ban k only . Second, t explicit on this s ubj ct . e o d la was no s it is now , these bank:s shall be taxeu by st te b unici~ al aut ority, d that the tock- ho ers t e s 1 e shal be axed o t he.ir tocK th sa e a on ot _ r er so l r o e t . Th hi p ert .. i n 111 '-o h e co ve --on o sta te ban .Ks . he f'ourth i s the c h e i e i n teres - e • t ' Ho1 Bil le v it t seven per ce • , · hile the ne 1 w uto it b ck to· a · t t e·r, t haL is, to be def i ing. t e o . toc 1 t d r t ne o 1 w St O " o 1, Uni te may be i su o the t3Xte n 1st year 1 5 wast 1 was f er 1 : r • . her ~ n • th sc sion ent o S 1 able 11u er o~ cane t ea b the st t . 1he f ift h e + co 1 be u ed as ab is fo b n - k i 0 00 d S CO U d b e r C ei V d , U on • Sixth; n ote un er ~5 j of one- ·xth o · the total iss e, while 1 deno m i a tio h t co d ed. 's su ar o befor • most we,. e e e i1n ortan t c !1an g t There a co n i er- r 1 ver llTI ti the lia i itJ s ctio w s reached. O n notevorth e e o C , O\Ve e , ·- a i n e t i o 1. here de it for t e Comptr 1 er' bon to be s e re b free o er s • WO d 'fre " for erl, e t r al estate 1 "Con r ion l lo e", pril 26 1 6 , PP• 1 6 - 66 . ar e now so me 4 7 of the w lthi st men o th co ntr had no real e tate et or tha r s on be i 11 co ld fu ... nj s h the be t o f security, an freehold r wa n o longer ne c e .... s ry . ext of i mp ortance ca11B the liabili t y discussion . Thi s ect io a i c me fro t ouse, ex mpted the stockholders of all b n s it a aid capital of at leas t - ~ ~5 ,000, 0 fro m the doub l liability. The Hou ' in doin this , ha d the Bank o Commerc e of erV Yor i n ind, but i did n o t li _ e the ide of m i n excep.l..ion for t hat b lon e . i t r aso 11 d t h t t i • rovis i 1 e h case of the . ew Yor, ba r , and in c e t her e should ever be ano he .. n o -~ 5 , 00 , tockl old er 000 cap · al i cu ld er fee 1 fe to ex e pt it fro m t he d ru. b 1 1 i a bi 1 it al o. he Com itte on i nance ished to a m eri a i t o a..... t o e the r quir em nt ~5 , 000 , 00 of paid-i stoc"r n a sur p l us of t r' en y er cent . w in f VO o er of the e c tio far the e ork an k , bu"- 'lT • Grimes a a id not 1 · • an r sp cia 1 th e Co itt ee ' amen d n 12 of the ct of 1864. • • rov 1s 10n . ft., long debt , hov ever , as ed, and w s i nserted in ectio ft r e eral merel- VeI bal c h nges ection 4 was reached and was ac ce ted as it cane fro th Com- mi tte e . It i s of im ortance here 1 ·n i ts definition o f the kinds of bond to e sed, d it ex lici l v aid t hat t e term nit ed St t s bon , u ed thi ct, hal 1 be constr ed to 1 m e 'al 1 regi t a 1:x:> s . " . e ~ 0 1 ort c ';) C ect ion 2 \Vhic h for e b n s loa i on rea : est te d permi ed the t o hold ch propart 1 "Con r e io a lobe , ril 2 , 18 4, • 18 7 • only as ca to the froci a mortgage g iven i 1 payment of debts previously contr cted. 48 ood f'aith, for the I Section 30, t h e i n t er est t ha. t a bank ma take as to be r egu lat e b th s t a e or t er ri tor y her e t h e ban a located, an d i n er se n o inter est rate wa rovid e d i n sue state or te ri- tory, the bank co1ld take a rate n ot to exc e ed seven per cent. It ill e rerre m bered t t m c h troo. b e came fro m this section hi 1 e i t w s i n t e Hou s e. The bill as a men ded puts the i n t er e~t back to t he sa e a t h i t h .ct o 18 63 . Then c m e t h e trru. blesome forty-first s ec t ion abo t taxatio. Th e Comrni t ee c. ed that s ec io a~ it c me ro t h e ouse, so as to n ot e cept e en th m on e · nves ed ·n bond • •._ r. Chan dler insiste d t es ec·a11 obj cted o t hat c l1 n g e, but r . Fes 9'_;e den he Com ittee h d ""'iven t h e question v er carefu l co nsidera i n an ·t as decid ed t hat ·t ·ou l d be ne ce ~ar to ake he c ha n e ·n o d r n ot to il the bill and o m e it a c - cept ble to t h e "people of t he states.n muc o hich a bet ee J r. Chand e fter co tin ued deba e, n d , r. esc en en , and i wh i h s everal undignifi ed emark e e excha ed , t h Committee of the ~hole rose and t h e q es tion w s a 0 a in tak e u on t he 30 t h of uril. .-r. o eroy wa nted the capital stoc of association taxed, excl ding t h t art i nv sted i n bo nd . corpora i o ;vru ld be b etter t h the migh t b diff i ult t o re ch . 1 ta i i e t h ou g t taxi o the e sha eh o ld er s for nd n t as r j ected. "Con r al lob ", .pril 26 , 1 6 , p. 1 71. • 49 r. Howard pr o ed t . t t he s ares b e taxed for the b enefit of tm sta e at t he pla ce 1 er e t h e ban K · a located i order to revent a ny evasion on the part of t he non-r iden shareholde1--s, bu ,r. Hale o 1 pos , t his suggest ion o the grou n d t hat such a proposition ould pennit pro perty of a person of on e st te to be tax d i n anoth er; t h a m end ment w s lost. hen the bill was ag in taken p, the a m en dme "- o t h e Commit t e 1 as adopted. Sectio 4 , a.s cl1ang ed to provide fo st teas ocia- ti on s co • der he ti 0 1 ... -ste i t h t h capit 1 g sa provid ed . t h i s ct. ver ba c ha11 s hen mad e , in ever y ere . b t o m re o l ort D C here, and t h e bi 1 w s left to be ke up a 2' i n order t o f ord opp o t 1 nit fo r the Senator to of er f he men dmen ·s . he:n t e b i l C e up 1 2, r. Davis g t ed n amen dme t ir e b t o 1 rea l e t t e • debts , 0 r eq n {S s e acqui re 0 within f ·ve t r co . into po s ev i on of it, it ar s a n a a greed , . 1r. . offered a t h . . al e11 dmen t .. OD • av1s 1 m o, an . • . rit • on t h a ter t end o f r u1r1 sp e c1 s e 1 ar. The d te t h t f ollow d a ~ ver long to l e e i t un i i co .. l r ... b con ider i t as fi 1 a 11 d e C i d d i n t he · '"'ena t e. 0 0 11 0 r of • 1n a me 2 e Cur C ill ~ t ak en u a ain on the t a en dmen s 0 t he Co r..m·ttee of the -: h o e e e a ain 2 one ,.. Bu kalew ag 1 i nsis t ed 0 res ricti n • ,,r. t _ e r es id n to d i smi s t Co tro l e .. and ._.ucc i n ectio 1 , • t h i r espect, b , d i e t he n ' lobe'' ' r·1 0 , 1 6 • 198 • • 2121. ' " a 5 , t VO ed t he ded ord 50 11 resident", the following ·ords "upon reasons to be communicated b hi to the Senate." 11 t he endrre n+s of t e Co i tt ee we e accepted until action 12 was reached and here only a verbal change w s nli de. The i nt er est sect ion as n xt to c use long discussion, but the section was fi ally ·thdra n at \ r . Fessen den's sug estion. ext ca e t he troubleso e tax secti n . uch discus- sic followed several ame 1d nts we proposed, but nothing d t t ay, and · the bill c e u a ai the 6t t he tax queiJ ion was stil un er deb te , being inally set- tled b a vote of tw nt - n · e to eight, t ha it r er:iai • 1 ca from t . he Cammi ttee, ith • ~ .r. Cha dl r's slight chang , hich made it ema11d t t there shoul be o is cri i n .L.ion on th ' rt of any st te, bet een taxation o st te and natio a l ban oth d t re con c red • ithout e l t he . e r e ln a i n- tare t section was r turned to. h i s ct ion, hem ver v t not et ready nd a fe 1 ch ng s ~ ere de • other lace mon m m • t h ese c a eo w th o e • l n Sect io , hi h dis u i fie di- r ectors whose are w re hypot heca ed 0 lo n or debt. Th p 11 r ose of this , 0 CO' rs e , as 0 intain he e er 1 e- 2 • After lon eb t on . r. Cha dl ' curi 0 n • oti 0 e m · t 0 e- h f 0 the i n re m ioncit·e ot ' er t 1 n 1 2 "Con r n e1 York hi l i nal lo e ', · " twent -fiv e e c en • of b n s to b e ept i n a ocia o r Bos t on , . i l 6 , • 21 • " • 51 th t the motio w oo t, t he int er est sectio n was a ain brought up. r . her an roJ.;o e that thi section stand as it c me rant e Co itt e, •ith the ex . e tio th t wi re speci 1 rte is li ited by t h state, to state banks , t h t same ra es all ap ) l to na ·ional b n s al s o. a mend ent ·t this ch n e 1 na sea. ..r. Ch dler nov ; proposed o st ·k o t all red t io ci tie xcen ,. e or , o.,;; t on d hila del hi , and ~r . e de.r on an ed er.na n r 1 i ed t h l st uc out e c p . e" or k lone . • bad ol ·c, to co n entr et ealth of h co nt a re ed to b i n on 1 C , n 'r. Ch n dl er' e o fift en o ourt e n . en drre t w s a · c ou 1 t o on e- quart r o on e e cen • lowed on 11 ot e r de ed i t h se c i ie da · .r. s c · on s i ac T" a d er a s or1 it C wet • t y e ell to ta e he r t h t u pon th next ucceed d ~ ett · g otion reco ~sid r h e lt t h t t . ese c · is r e o ed er ave ·1w rt h , Buf alo and r rovi d n ee er ad ed . ... r. uc eeded i ge t ·n t e f i11 1 r e tio at . ev di r. i i on of o e- ourt t ne 11 e ·h n oun . l ' c 11 • di co 0 e C . i f or e t e aun t · e o re ee m a ar . ~ ' . r. end r h .. C ion . 0 • z 1 u e • e r r i m 1 • 1 . 0 1 lo ' " n . ~ • . 1 " , en m v d o m n e c io 2 h t hor- r st ic o t e a o 11 t e t h t to , 5 , 00 , an t n i u io , 64 • • G , • 1 • a h a ch g 1 too j o rn ed 52 upm comin to th bill .~y 9, , r . enderson' offer of ?!lend- rnent was lost. During the -eanti~o ,r. Dooli tle h d r eposed adding sec+i on to t e bill , r.1hich in sub ~ t ne e ,aould e1 nd limitin circulation to t he r~sent vol e bo t h o s te and national b nks, rovided thEt case ore notes sho ld be i sued they vere to be redee ed on de nd at the counter issuin them. · ... e then re d a letter fro Geor e • Coe of l ew Yor , in which ~ r. Coe a nr ove his j _ 1 n . evert .. eless, h e e d- ent i hdrawn. • fer several u e , erfunc or~ ch n e the revision for b n .. s of :>50, 000 .as i thdravm also, nd si e ent o reinst the citi s of rede tion in Section 1, ~ ic e h ve lr ad~ con idere , no t ·n ~ in 11 10, the 1 ill asse d by voe o~ hirtJ to nin. n ay 24 t e ~o se s ucceede d · _ e t · n - he Sc a te's endment efore it. lll were c ncurred in b t • ix . e only im ort·nt one of these being the t sect·on . Conference enort. 1 ,•.1.r . Sl erI!lan re e Se e the e ort f ' the o ittee of Conf ere ce of h ~o ho ses, \ '✓. ich i n subst nee rvas a 1 2 "Con re s i 1 his Co1 i ttee fro t e Senate. (1 ) Th t he ouse agr ,e o t e fi teen lobe" " ' ,essrs. 10 , 1 8 6 , o-r Massrs. ' • 2 07 . oop r, ·,1 or r n h urn, and o nson ro llor the 53 ame ndment of the Se Je with this sligh chan e· t · stea of er- rni tin banlrs +o ,rlthdraw bo nds whereon t here ·s no note • 1 Stle, t hat said b n _ s y vi th draw s11ch unenc umbe ... e d bon s onl to an amount beJon one-third of its c ~it 1 stock. (2) That he Senate re ede fro their ninete ent enw ent · n Sec tion 2, li - i tin n- capital s t ool . . of n -..s nd ls o he notes to be issued to ~-3 0 0 , 00 0 , 00 0 . There w s r di cal cli f "Terenc e here, · . r . Sher a n lat , . d e r ex )_ 1ne , n '" li e limita io n ~- s co n-Pined t o circul ion only . e o se r cede fr o t h ir di t irt - six+h mend .. ent of the Sena e i House f epresen tive rece e r om ec ion 31. nt o the (4 , Tha+ of the e Senate ' s further ch n e of Soc+ion 1, nd t -h e Senate acce t , ins te d o_ Bui·f l o nd ro,ride ce, • ? s .. i n :) on Cit • (5) That e l')e i e s to d a w r • h 11 is ~ · nc ~i on of t h Se r ede t io i ie ea st .n d es o Allogh n .t'ou n a ins nd e nni t 11 t o redee i ew or : . ( 6) ... en :r . Sher n came he tax sec ion, • e sa i he ch news t e onl one · f - fi cult o set lin an n h t 1 ch n ee s sli t l e all , it v1as neu 1 sa~e ~ s before he ch n e . p on .... r . Io.le' s r equest fo r n l ana ~i on ~ r . Sh e n n aid; "Th j_ . 1 l says n o thinc bout s t s. I t r ovide or ~ t of one -ne c n . n t he ci c 1 ion o t h n i on 1 nl:s, one - h l f er t . 0 ei .. dep osits' c!ll on p e Y C . on h jr c i 1 b ve t e 0 n i V s b n • res r v t o th s r .J ri h 0 1 V 4 on n i on 1 b n ,s n o ceedi r e h on hei o be n ~s, n i s 54 1 t o be levied at t n e lace rvhere the ban ·. is loc ted." he re - port . 11 1 as conc urred i n , n u:pon June 3 \vas signe b t he · esident . SUI!llilar of Le )i lation. It will be rene m bered tat at t he beginning of the dis cussion _ the Aot of 1864 Ir~. Sher an ave sever "· 1. r roses to be acco~plished by the reenactment. , b e v,ell to briefly sta te t o\ "t ext(rn those aims ,ere cc om lishe . (1) The nation 1 b .nkinc la i , s i n 1:1 n r s ec s ~ lid ore attractive o he st£ te associ i ons; t .. e t s ctio , t he re c ernr>t· on c- ause, he interes sectio ~ ex~ ples o ~ · e i M er.ent ,ro ~ h ir stand oint. (2 The i _ divi liab i lit cleuse a ou t e of COr.ll!i rce o .... ' ew or). Ci tclr le s r:·a erip i on c · t i es ,vere dded s • e s 1re . a is act 1 r . ( The : i ni e re c pi a l of ~; l 0, 000 w COOL lishe. Sl c h i s ,h first re· .. chan e i n h ri ng S., st ern . s :; lo o .. fory1 r to .: ts s 1 bse c1 1e t his t or n con- sider t he e 1 nds of ~ roun ... . • • ~owin na i on , w r th ., e nc, ·nsti ution, 1,l c e in e,v c n ever ec e, s rily . ee vvit h 11 n, vital t l1re e n · er of these chanees w re r,urel perfunct o r , t h • • of the r ,er ; a J s .in chinery so 0 s pe k , il o ot hers re cbO t b t h c h • olit·cal • con- r ot r; r o r r;e n .n - C no 1 0 . • • ountr T . his l cl -ss f h b nkine 1 i ons • -- .... s s - - - 1 ' on r e n 1 lob " 1m; 1 , 86-, p . 621-G6 2. 55 legisl tion t I we hoe to consider in the r enainine aees of this paper, and show , in a ~easure at least, the function t ha t our ereat ankin System as he .. d to perfonn in t he on,vard move .1 ent of thi s r .e .. t c OIYJr1onweal th. 56 Chapter VII The irst b nki n J leeisl i on ,t .rte •ct of une , 1864, was t ha . i□ osing a ten r cent. tax on the c ircul.t:i ion of st a te ban .. s. Th e reenac t rent of h "f ·,:a t ional S 1 rst e h p r oven t be a ood han , n o e h1mdre a sixt,r-ei h t state b nks had ente red b y November 1 5 , 1 4 • Sevo~ l j~uort nt ...L st t es ~ a d a b , . .. sse _ e:na _in a : n . i e s for th st t e in - stitutions to convert. et, t e needs f the Gove_nnen ,er not 6 tisfied ; .: t \ s nee es n.rv to sell mo re b onds end the s a ~e tir.1 e +here ~,a s danger t .. t circ ull:tti on roul beco e inflated if national banl.. 1ere t conti n1 e i com eti ion wi h sate a ssocia ~ions. ·:,it th"s conditi o in vi erv •· .. r . •.:c ullol1 h , in ,t en ne c e • • ,I is re ort of 1864 , r co ;ended t i osed up on sta t e ci~cul ~+i n . "For t h ,, do 1b e nurpos , ", he s a i d , " o f } : e ~ i n om n ion t l circ 11 • . ion ee c onsisten i n st blis in e t h t_ a fte 1 n r evon i n e instrl ent I h is e of b nJri C it 1 in ee i n - rn i fla • ion, ::nox, ·r :: istor. of anl .in in t h e ni ted n s f r .s . ght ho t h .., coun- i e h h r e re c. rdin • . the " 9 es , p . . 57 resumption of specie 4 a., 1ents, or rove unprofi t~ bl owners, I }ave felt i my 1t:,r o disco1r e, i n 1:1an , inst nee , t e or uni<L-,a ion of ne, banks ncl jn ~ore instances to -refuse m:t sanc tion to the increase fen ita f those alread, orcanized." O\r.J b ~r the . ro os e the stti .e l) duced t turn their C a. ital , rhic served as 10 ld be n b sis o · st e ban} .. iss e ~ in+-o t he }._ · ional S~rstem, hus not incre sin • th • aegrecate o_ na io 1 circ l ., 1 on, e t s . e i e r- 1:shin the desire d enefits to h Governrnen , of b nd is ue . _he le isla.tion o f the a- _:_ o vhat interestin in i tsel ,, , in c ad it s o ... ar~o v1l r esca 1 .e defeat. int_ d11.ce the . endr ont in t he 011s e on ebru.ar r 17, b 1 his reco end +ion v s r jected, ·hereu ,on :r . ··ilson presente it 1 in a sligntl odified form n • 1 ~ ss , rel • ,vas inf vor of includ:ng the no es of n i o 1 ba n .~s lso, t his .1e anent t o the nd~8nt ~ s r jocted. Th OI!lmittee n in nc re jected ·t, but t he ~- Dor ~ the Co~mitteP. w s over- rulec b r ma · · ori y of .J wo , n it f in 1 , la r : re '7 • ffe c to o_ th ax. Tn r sul t of th to. .. sen once; 11rin he e r 1 t 1 ,014 b n lrs \Vere O!:C ize , o_ w ich nlli!ll)er 283 onl l 1. h i . he hie _ i+ c1 h • J.S n s .;. 0118 • ,Ve T i on ' ' I • b nk , sta b . . ss cia , s e r ., n scoc1 on, sn 1 T tax 0 n ccn • no e n t s h . e_ • of r ]. ' • 17, 18 • 0 . ) • 1 r 58 were new, mi l 731 c i fro~ the st te s ys es. ·he o 1 number o n +i on 1 b n _,.s no s 1,601, nd 922 of hese had 1 been co nverted fro t he sate baru : i n 1 ws . no t he!· cc ount ,rill ive ood idea of the mount of c pital turned i n to ne .. t ion 1 ban~- ci r c11ls. ion : n Jul , 18 6 the st te ben .. notes . ci rcula .. ion al!lounted to H, in . ~ 1 7 9 , 15 7 , 71 7 , ,~hile the n io~ 1 banJr c i rcul ion ' on th d te as onl ,1' •~:·31, 235 ,270. J l.l 1, 1 5 ' st +e b nk circula J i n stoo $142,919,638, t hat • 1 b ), 146 7, 60 . On u1, 7 1 6 t he an o_ 10 '11 -- ' - - , ' dat· e v1he n t he tax c l use t ook ef~ect, t e state b .. ws wl9,996 ,16 ~ i n circul t i on , hile th ~Jion 1 b nk notes had aggre ated 1276,012,713 . e r 1 er he st t e b _ s had les s t han ~ ··4 , 500 , 000, n ~uly 1 , 1 8 7 6 , the ount s li le over one illion doll r • Subsequ "' .n '.. s i n a... tion. ~Ol time t o ti ·e C ... angeo h V,, be n r ~ .. de in t ' tax le isl . il h i . 1 ct ent "I • sev- 1. on , 0 . na_ en een re vise 1 • c l of . or t • this cons id on e r 1 r. es. "· o .. s re J. nc i n of he • • ~h . 1867 and t .. ru .. 1 .. .1.-ue ion , nc 0 _ e occur re n 187 5 • t order • her her In l. I ' T n see OU o _ _ 0 en J. 0 • 1876, b .., t e ct of .. ·~1rc h -16 re r , the n er c e .it . X '\Ve;. ex e e to n .J st . # e 0!" n i onil nker h o !) 1id 1 h 7 -- J10 .. ... T "'ii ..,o r -r .. i n • he 1 ni es " , • 1 . tf of o n n .S of I 1l , • • 59 notes of to fns, cities , or .,n.,. -lm; ci l c .Loration, ersons, state b nl~s or s t te bankinu assoc· a • to th ef ect t ions, e s .. 11 renttor c orrect onthl CC Otln t of t e e notes , in l order t 1 1 i. t s u.c note~ sbc._ 11 be t xed . And lat .r it becam e a oust • llv in the SOllth' for not onl . vin banks, b t :'l ' es· eci s '1 lso munici 1 c rpora ions, citi es , ton - n c r ilr oads to i ssue receipts nd certifioa tes vhic h circulated s oney . As re- sult of his r ct·c ~ t et x l w s . e .. ~de b r the act o-f eb- ~ 1.1 r , 1 '75, _ic 1 · . 0 t he t n ~ er c e : i t . t _ to ., ny 1) e ~ o , C - ~ ion, a s ~oc i ion, or state ban a ing out th ., notes o any or 0 izatio n rh tsoev .r , exce t th t f national b nkin as s ociation . 7 -- ot t . • , Vo 1 . 15, . 6 . 2 " " VoJ_. 1 8 , p. 11. 60 Chapte II , fter t ho tax le islation , st llr )ent ne .d o the b n~s was or a better~ 1£ .. tion of e c urrenc y , n . con- sequently the greater r of the ~n ing isc 1ssions in Con ress dur·n t~ e next ten 1 ears was directed t owar a ore erfect adjustment oft is i ~ e fection. 1:r . Cl rke ' s .. ecoru,e dation . t r . .... cCullo as aJ ointed Secret r . f the Tre Sltry nd : .a.r . reer1c n C r re bee e r1 or.mt rolJ.er of e C1 rrenc~ in 1 5. .... ~ .1r . Clar re elieved t .. t +i on 1 b n]r notes sho 1 t t n e .. ce o the st t iss11e, nd c nseq1. n l r no ne\ circulat i on r s er ted to conve ~ting st te b n _ s unt i l their om n te were re- due ed beloV11 -t.; e amount t h t e c ot1ld. circ 1l ..: e as n ion 1 ~n- stitu • r esult of + • lie r circlll . . d- ions. s • .J s .., on as er 11 red At tho • o-r .,. J 1 r re' ~n • t o office tl c e • 1 e .1. 1. r. C r t . e .... f • of h b . t.: c 1cr - C i ons , 1er in s • ~ .A. t e s ti o ns t ol .... ' of . on . 0 S0 . , s r V 0 0 J.Ce - . r . . .,. .va. s • in t ·o it • • .r • r v.:e gll e .. since 61 most notes vere redee~ed a e .! or .,_r b nks , n in c a se of ,, r.n out bills, :fte11vards sen to ... vnshin ton f r des r 1ctio11, th t t he ex ense f sendi t e no t e ~ i uh t b e sa v o d vin the Gove1 ·n1!len t of f ie e remov e ~ t t }1 a t c · , r • -' his i nconvenience nd dela of Te demption, neve t heless con inued until h es lish- in u of t11e a tional ... edemption A enc i n .-rashingt on . l""r . :.nox sa 11 s that this defect is o e of the ost s or i s im e_f ..... c t i ons of the lTation 1 Rank ·n S rsten . Interest on De~osits Discussed. In 1867 I~r . T . lburd s11cceeded , r . Clarke as Comptroller • . Duri thi s ,re r onl ti n i ne ban s three b inB c onversions ror h st te s . stem.- e s ablis e , d debt c on- cerni n . the i per..:ec io so· th selste c n ;n11ed ·1 rmly sever. The r c tic of 1;e v; ork r e _ tion bank s ri n ~ interest on d - ..... po sit s was ~ong t e 01estion f discussion . I v a eener 1 c onceded to be da .. e rous t o -'- 11s a t tract s o 1 r ue 'imount of money .:.nt o one city , even t he b 1~ers who er ist e d in doi n . l d- it te t ~t d n e r . l ev·ertneless , the c11sto c ont i n 1ed and be - ca ea serio s . t~er, indee d int e crisis of 187~, s ve s all s e e resen t 1 . on e .4. osi ts n 1 nox , ' I' • J-i ... s r Corn troller Hul llr op os ✓d this p v i ne; interest 1 av oc ~ ed centr 1 r e de ~ · on o~ notes. -.:ore irct1 t ·n . . t . O.t 0 ... tio e u n 0 n 1 a ec t. of n in • in h ni d T ' . 1 • 62 s ne b n s wee or niz ,d h y ~o or e nd _ o:re di -fficul t in securin ..) Th· s tro bl was la:rgel 11 d 1e to the f act ;hat the 7 1 \V e_ i tte retir · nc b n s t o rit drct,v h eir c i rcl1latio a leisur0 , th1s b ~ n i n -p r o-f'i t t o t he s elves eve ate t ~uit 1 1 b n~in business . f c ourse, i 1a unfair t e hould rea t hese benefits fro t he s y s t e1n a t e r t a ce s o c o ribute to it, but ·twa s .:_ C 1_'1 njust t o t • . would- • • b nks r a e or n1z1ng , n e or n1 z1ne to be th s ~ e t 0 1t o_ e s st eri . • In 1870 thirty-se,, b n -:s were org zed, nd he ucs - tion • s u f ~ ·cie br u .h c oncerni cu:r1 C iT ~ · s -o n I• , result of he na-tionLl notes .. 1 0 1 • e n . l ere s , 7 he ct 0 uly 12, 1 70, -r 0 - t 00 , 000 , 00 to > 54 , 000 , 000 , 1, t o be • e d . t.h st vin less t h · .. n • ion . -r or .10 -n es n e r :r-o or .. ne ls rov fo h . hdr 1 of circul • ro s t t e ' l 1 . n 1 h vi il < I 5 , 000 , 00 sh o . dr ·t n xc es ; , un I e Jl vm , n vinu e~cess "'o o i n o s ctio s lh ere he c oul r eceive re no es. ... s res11l t o i s la , l os ~ a t onc e 1 ... k s were es t .. in he So11t , n r : 0 S ; , h1lS brin · ng hJ 1 c h needed c · ~cul tion in o ·hos e s ectio of the c o tr. ] _,.. re h 3 , 1 6 '1 , t e 1 v1 II the ~300,000 , 000 to e D"str·c f Col1 .bi h _ b pn cha nee o r ,nuire J l 0,000 , 000 dis r· bu o ssocia ions in sta es, n teYr:t ries accordi to o ul ~ ion, nd th re . i nder +o ist rib t e cc rdin . o b (: (in c pit 1, res c s, e+c . (" r s i l Glo , , r . >, 8 5, • 3 . ' 0 r C • ' 63 Prompt ~etire ent equired. he other act t t c ~e as he natur 1 result of this con ; ion re c irec t hose b n 1r <~ lrea~r in li t1.ida ion to retire their circula ion de ositin~ lawful oner within sixt, a~rs of the eot, ana. thet b TIY.:S h .. re f ter e;oinc 011t of business m st likewise vii thdr .r their c i rcula ti on vvi t h in six months f er the vote of th . ir stoc ... --holde s closi 1 1p b1l i nes s • 1 8 ' sta e c d · ef re } e e acts, o ,eve '!· , h c. c . of ·. r ch , l . J b , .. 1 . :, t ,, ic . n r_s w re no on ger r CJ. u ~-re CL o • s l. c. nua r , , ~i 7 --- , 1 ann October, iv re l) r of llt au or i ze d t e C ~ptroll .. · · o c 11 o r . or . l ,as~ fiv e t i ·es , ear, or an r day ,,h .c h he s it. This .. ct ,, s th es 1 t o ~- n .. s m ine s ec. c:v l re Ti ra ions for r e u r r en ort d , s, d thus f r ossl~ isre resen in . the v raee st n ·n of con- ditions . Condi ionu in 1872 . I A ril, 1872, · .. 1 l b11r • his . • res 1 ne OS . ion as om t oller and . / r . hn nox too _ : his rla c e . rief re- • b k in .,. . • her e • order; m il Vl. V 0 S 1 lla i on m SP- n Tove b r , - 72, 2 , 061 bank s he:. d b ✓en or anized nnd twent r 0 t f i l en, ninet . 1 iq 11_ d • le . d T i lo - ne ne in 0 ,1 on, Vlil - se 44 ti l ti • h b n 0. e s t .. n '7 es.,_ 0 er Sl s • ' 1 tr 0 7 t ly , 1 70, p. 5 19. • • ol . 1 , . 32 . had taken ractic 11 11 t 11 of t he '.. -5 , 000 , 000 i ncre se in cir- culati on , bu s ·11 1 eked about \40,000, 000 u t e . ccordi 1 to th e distr:buti on a rra ~ ent o~ 1865 . \lth on this de- 64 ficiency ,vas s 1 1 posed to be drav,n fro b h vin n excess, it ,as never done, fo it Vi o .lmost impo si le , ro.ctic .. ble or b m 11.: to collec t thei1 issues and. t 1l n it in or re e~ptio, because · t w s ddel r sci1t ere ti 11 over t h countr. .... t C01ll J co ten i n ho ,ever, ther b e: n _ for c ollec t in nc. r eturni n o hei or i,;n w l o nte , all t e notes of b vin · excess circulB. • in ), ut his i cal ,r 1mfair , and c Act of une 20, 1 7 . As reslll f . di ~fi c 11 t r erie b'"{ he l e ce c " 2 t o brin • h . t es t he 20 , 1 874 , ssed. i n lr n C o_ une "'l - ,.;i.. ti fe t ure s 0 ; nter· t sue s c h m ("Y>i nr: he e of the Currency ·c t to t ... ational }_ine ct nd . • the e re ( _ lllTln .I associa i ons, n no th c ot1nt_·. l r _,e , to e r e.J e so of en~ vinf p lc... te. t he r n t ~ , 1 n _ he co s of rans ort~tion u t i st i r t ant f .. a 11re for us is • ec i on t hi ch .. ern: i Je b nl_ o vr.i t hdr a 1 rf1 1 . one t hei ands do m t o (" 5 , o , b •T s i . 1 o s i ti o re t ire t heir c·rc 1 i o . I con t · ne re dis r i bu "i o cl 4 1 e ls • ..... .. no x , " II · s or o h Uni c es" , p . 110 . _ou • • 72, 0 • 65 t this i e he si~ ner cen . bonds were ~ t remim , nd it • ras fol1n . ~of~ abl fo_. th b - 1:s hold n the to sell i n order o eet th e ... rem· run, n renl ce the .h e five er cents r , t c · rc1.,1 ln ti on er ~ a en tl ,r. . .. n banJrs • o retire t .eir Thus i dll be se~n t t h re 1 s s fficienc! of ret·re cu~_encu t o su ply thos le .. ce s l'ifhere curre nc r vras d e; as co _ sequence t e 1 ;25, 000, 000 so m11c _ d. · s c u s sed v s never oe ded o be 'i - h ra 11m. The esum • 1 on iC anri he Aot o rch , 1878 . 7 ..... .,. c n lla r , -, 1 75 , t he act est b l ; in fr e k- ing nd snecie payme n ts ,r s ~ assed, •.nd -his s ill f rther ab olisb. d e..n"f., eed o the v-~ i t h dr ,i 1 . The cl1i _ feat 1.r A of t he t · . e !'e t e cl us . 11 ho :d.zin n- he Sec et r o sell n s at :p r for c o; n , sec tion ab olish · n 1 li itatio upon circllation . It l s id ~, V 'i h t e Redistrib11tion ./ ct of 2 18?0 . Its obj ec , of co11rse, was to reduce the l ees,l tender notes, whio thine i eff ec .. all , • ~ 1 \. unti l he ct 0 T, arch 1, , 1878 , ,1hich l. . t1 X ,. lC 1 _ ... prohi ite d .e eore . r ""tr ' or a officer fro furthe _ cnncellin n r et·ri n - . ore of he nite d St tes " leg 1 t nder notes • l .. ill 825 0 . a. te . ·ouse I • 0 . l S n n ' st rr of . act rn ko of -· S . tl ' - ft/ 3 T Otlse ill . 0 . 46 '- 0 h · s ate . ., pti 011 c t . ed red c.e t l e 1 , e11de a per e .. es in en 0 onl~ as fast. s he b n cul fill the V C n. c Jh e b n ] cur - renc id _ pand 8 icien+l , d .here iderable la lest ere ho1l b another strin enc i and 1 .. c . o :ptlblic co fi denca in overn ent 8 .,c hence he ct o 1 78. 66 Chanter I. TI-IE C! ISIS F 1873 ',· e now t ur n b ck 1 ttle i J)Oint of tite o co sider t h e fi ·s 0 re t i1H. ncial cri s1s t ha c e ,·th ·n the istory ster , n see i · . os ible jus a t t _ e b c n s contr · u t e t o · , eithe r t o better c di t ons r o 1 orse . here were t w sets of condi ions ; first, t le o side · uati o o~ b s i eas for hich t he • n.r: :n no 'I coul be con- ~o have h d ... ar , d s ec on , t e c nditjons nd ork - i n basis of the b nk thich seer e vO av , c o trib te d 1 terinll to t he evil results o_ the cr·sis . Te outside situ -tion in brief h i s ; t he crisis ad be recede b of' e • ,a s n - 0 ,_ re r ce i on- al • ivity . t onl ~r ric11l tur 1 dev 1 en ab- 1 S l e C VT 8 .L. nor tI 1, t lf c t 1r i a- n _ tr ns art i o ere fa1~ l1e., ond the 0 . b de onse (! 11 re ll rel_ 0 erna e n es 1 . il .oll .. under . n er ..,.. ses ece s e s T l 0 - 1 fi . 1 s i on J1C e r • u r ' ~ r ~ o_ 1 i es U n er 0 i n • S ID ', . 1. 67 Thi- s abnoro 1 develo· men moreover, was not confined to t he -nited States bJ .l eans, lt ... ot1eh the crisis i t self I!la.t bes: to h ve be -. un in · ev, Yorl:: City . On e tenber 8 , the -:~a:rehouse l ec11rit Company -P iled, nd on the 18th and 19 h t 10 of the largest banJ_ i CT ho ses were forcec to close their d ors . he next d -~ , t he nion Trust o~ ny, t elation 1 Trust Com anr, nd the ·ational ·nk OT the Corunonwealth ;ere forcP.d out. rhe -ew o ~k t c ~xc e .... or the i .. :st i r J-e closed its doors nd t"' • ...- ·i onc:..1 of ., r s}1inc c,t o1 ,ed tll b . C JiV- irs )an ~ .. I 0 s es ~ · it ies. · 7 1 confi hllS ddenl r el de • -- ence ::as s es .ro n 0S1 del:lB.nds be C thic _ [111 ~ f as , t·, 1 ..... b n}: res .rve "·e-re I • re _ 1ced 0 1 c .. n l l · l . n ~ l , lo riount • Of c otlrse, he banlrs .,Ql_ 1 i 0 11e the fa j l u!'es th :.i :r esul tf , • it e a no 1 S cide jus ho 7 fa r t he s ould l)e bl ed in is no doubt however, that increase d loan. hel respon ibl or an e \ r tter t o de- r s ec t . ho11ld not b e .u.ero de ex- cept 11pon i ncre s e sh re serve , n his tim e ere under extroardin r J circun s tances i n this res ect; t he ~c of 1870 n~ f 1 74 re J- rding redistribution nd increased circul - tion co 1 1 no be c u.rrie c 011t +-u11~ , ncl .hat mone h d b .,n t u istri, te d 1 d o e 1 r elv to t he ~est nd South ,here b 1 n i faciliti s , ,er not d quate o t he e n 7 - s red da • r n 's ... e or ~ J • f 187~ • r ue, " is or of rise • 6 • Jnder 'l 11, n t . ., c urre c y o 1 1nkin ste ', 68 _hese condi ions however, are eneral. n d o find th s pecific cat1ses f the b n : --s' ;nadec 1 CJ ye mist lool7:: o ev, or. h ere so _ uc h o e c ,it 1 of he c o1lnt r w .. s cc11r.1l1le_ ted. ere, seve b n rs lo11e held a ot1t eight, r>erc n . of t de- pos·t, C ire • Cl Y • Ano .he ~ n rticular wea _ es o f the \Va s ... e _ ct t t he r e d bee n es p r ctice o~ pay · n~ i nterest l!)On de. osi ts, • e C O :r l n abno ~ ., cc 11 tio 0 one in he i Tipo r . 7 t c o ere ... ..... c e er s • e.s t:h e crin- enc r C . e , + e b k s hu d tJ .., l en m re h n 1011 t }_erv j e ve ee nec e ose. Y, bee l l S8 t e 1 eet he interest on he · r o. 1 debts • .. • cle .ri · _ne 1 s e 0 ous lo n cert· _ic e w s lso anotb. e _ _ ver n oticeable de f ct i n he b - .. nk in s., ste . h e re ort of the clearin h o1se co it ee ae r ed ,it e leadi d • t r cttce o -r- "in u . t ~r deposit a zi nes e l s n s licy , his • did n ot t o be • • a t t- u c o l , ee s e ...,1n c ere n er . ref i ng • I n • 1r Y e ort s , bo Jh t e ecret r of he · _rea sur , fill( t e Orl .r ol le r ,he ll re11c r eed s .re n ll OUS :me s 1 1res i nst • . e . .. st • i nsiste c . • t h e p l il ,. in on e . Sl s n lp On ncr sine r e - 2 s rv of • ::s (. • Th1r i J t l o ses i o 0 ,oner is f er h e c risi t r •• • -l.S 0 o _ rise n ir h i o '' ' • :.e· ort i i e e1 -f h is · s of 1 8 7 • 69 t ere v, s uch d.eb te · on the ban}:ing 11es ion, 11t no b nkin le~isl tion of any i~ ortance o 11 OVIT d i 1 , e dia , , ' t r du 1 11 the so r eas11res, e~ c e t th t r ol_i i tin r intere O o e osit , a.ve een ort.ed into the b ~ kin enefits rom the S stem. _houc the b nlrinu s st er.1 v,as b ~ no eans e 1·_· c+ e+ , . inlJ les~ • to t cer a '.JTOVOn b ... ~e -.. 1 1 c cess n .n e cou -- tr ~ erha .i s bet w • r • eral -fee of • 0 j r e _ Sl 1 . · u o- e ·e e t .:. r:11. ort + le · isl • et 1ee r1 1 )70 e . 1 be of e i 1. on neec ere • t ., a n t se f rt in the re11orts o-r e 0!!1J) roller _o . t . ar 1880. -r T . . brie!; ' 11 e s ,ste . rJlished not or th ., s , in ., s e s · ..... ... bene..Pi t 0 -r s tocJ.. alders , b • the e or 00 of t e peo J_e • I s ,ple bfl.S..:. s • • • lar 1 u.s, • h nir_ . i re C 1 s e ll r l s C • red . rc 11la w ; on, i ts -rotect· ., re ~ .. er es, l s sec C n 0 ae s .ors n d its ~ anae e , en rnus t c 01 en i o ever st1de t of hen o the ys e tat, dur~ con i n11e t he l~st C . l . . .• , \ - n , both n .,li ert -.r rtie c l i ried t 1 e honor of eve i n e r1 -.------·--- 1 'A .. is tor of cu s ecie e ts an neit her -0 -rt J.. uld 1) e oo ide ... o a o ish ~ ~ s rstem . - - -- -- ---- .. in in he nited t J s ", p . 163-1 JlOX . • - 70 hapter X AlTI I Afte r b • s nes e ,.a recov r in 188 , there w s co si ra le tende cy .Jo incre se b e n - ote c ·rc11l -i ion, b t the ill b f>r e 0111_; ess at t aJ i . e cl1ec ~ ed t · nc 1 in, . i on . condi · ons ,vere veru ar ' . ro ~or ion o~ t hen i on 1 de t l • lS eb re five .nd • ul X er COl1 • i teres . d been -1- .. rep re 1hich Vi C ~ OT ~40 , 0 , 000 0 thr o er cent . b ds s u e y; b sis ;- .... k C j l C ll l ., i n . hese ne rv b nds were to be sold o Y. " for the 1 !1 lrin fives ... n si . ,,s, or he, ... i ~ht be e'"' c h gee fo~ the ol d ones J d · l sti n , the · nter- est . t h 1 elcl bout ; 10,000 ,000 of ow, c1n s t. -.; ese .... • h i g I!' c:t + . els n~ th m11ch di ~lire to , r ,C 1"' n 0 ver surrenner - them t cents, • h t . . nd 0 ree er e-r en 1 1 , ,, 1 crease no I lSS e - 1 a:n}~s stened 0 de ,OS . t ,.?l 7,64 , 434 • lai.vf11l in one fo r t e • . • dr 1 cf ., .. e l ut r 0 ir lSS ,, ~il ~ ., I. ,, • " . ' to th b . 1 ,111h ch req t • re th Jer t ~ er s orce - sec ., 10n c.. onl, 1 b • of ,, 1, t es hree per cer 8 ere 0 s J . .. I V ' • bill vet o ' ~ ·resid e over s • 71 bee ·· e a 1 ~ {' 1.evert el I • • ation f • sect red . s ' ' l 1Cl l ' CJ.r - cula i \'vaS reduced fror ~ ~ ~ ._.., J ,654 , 721 on .r e br1 ry 1 , 18 1 , to 1 ~ l•305, 587 t 20') ·~ arch 1st o-r the s arn ~ ·the on tr . ... owever, e s - t i on of co:r tra.cting t h e ion' 1 c1 rrenc 1 r '\ias not close rt ., ere, and under _ residen a fiel d' adrlinistra t ion , rovisi n s r de wher - b ~ t he ban _ s ~ere allowed t retain t he i r old ands at reduced i n terest. ..., a I x .en .. _n ..., ar ers. nevt i : .. ortant ci11ost;i oncern ·ng b nkin . , c ame .. ; n the c l 4rter of ·sc ussio ove t .. e , it e ssed nc.. _ ere s a r t e 1 • ens on ill, C )l af er ma "t . en .ent in t simpl ~r r vide "" o th ex e si on of _ nki n ,Iivi e e s for t ent , a s . 1 7 -e ·s ' d ne ::rl ir 11 ., ose .r ~nize n s d heir n e r .h fir s c -renc c t of 186 iv n no ·c e of h i r inten ion t exten ~ lso . "I +h. • .,. r e el b" - ~. .ti - !j., r . 0 vv v s ce . .!.. ._enr ' . a n- _s J • t he fie • • . 1 .8 • or f on f 0 Cal n 0 0 i n r1 n 1S . ' • • he t he __ · 1 11r c s ., fir r • T e if e r 0 e n 0 ne ee 1 it y . . he • of - ! s r. , s , 0 cone ,rni r Jion e e t t;e " , • l 6 . - -s s 1.l , . • t • 1 . • 17 . • . 72 an~:s nd cl u i n ous loan . T • _ _ is r , r no t ssen- tial l di 1e_ent fro inions ci e before owever, c nc •1 • 11 no · be off_ re =i ere. Su es .ins , r -e,r :-egtsl io . • • uc~e s ions c ce n1 n · c • es in e b ~ n - ~ ; 11 1 fort .c r•in 11rc es. it Leet in ~ of h e ew Yor _ 1 . u . + · e r 1 u .1. ... o ... e 1. ~ - • o c _ 1 on , e..,... ne ' 1 884 , it r s lved; " a t t e .. e j _ n e e o e • • Jev le' r - '"a e c~n~~ s i n .o r . 1. e1re r , e .- er ... t ~ . • SS OC l i on , i n a 0 e er 1 nd s eri ous _in nci r l · s urb mce , is · v ol n - . 1 r . ,ell d "l j th t • c o : c or : - ~o C 11 e ev !. r r 1 tt di 1 . ner.l elief , e r s r s f; r n 7 C ien 0 f1' .. -- l.) . O ! b . . f ¥he 1b1· o d , . . or 0 ..... n C i ve . 1 2S . rui ..... 1 e t , ~ o d of . e l) _ 0 er ·1.. • n ces e e .. . e ., u l- .. _ esu 8 2 ; d C ed ., .,. e s .ve _ ~ 1 e r s r e i for '"Ln - c orrec . . • li . ul.Jlic, • l>le ·lll he b' m .. o 1 el _ o .1,e ... E.n e n111 d h.,r • t 1 , 1 • ... :>OC~_ a <J i n . " r s u 0 r·e ft' r. 1 se I ' u .. T . ~ .. xch n u ( • ea r e oe, res i el .l- - . • en ors 9 s res ol ve, ten 1 .Danl .. , disc o rse, t e s a . e i e conde e d · n a r t her ose ractices c on -n -s; (1 . t he p i n of ·n r ,st 1 • ' ( I I ere iti n - 1,;0 t bon ci t a l • ' le ,. ~ s c s h i n 1 nd ( , si el h b c h,,CYS iira 1.r e h .c } : er o 1 on b nks 11 t b 1 i st c _ .. s 73 h e • 1 • ci -1 C . 4 , 0 1- 1erc1 ·in ro C e 0 ( 63 ,.... r nn t e l~ .,. ' • of he - . ) z1ne , ove eI , 8 . c e ' • I t . : )90 , fer . o:n s ~o e-Pi of .n d t he • - 1 e s e 0 res. eener 1 b1 · U - C, b 1t . 1 7 s _n no i. _ edia e l e . • follov:ed 1S 1 0 r s 11 0 di'- • u 1011. Le isla io n l tte .te i n 48t Congres s . _he ollo • • rt ('J n l.I. n n .. • S .1 10 s wer o-rou hl" de - b te . nd l.n E.' n re s hou > h none t ,se e ulte . 1 tr1 e T of ·nter t bec c .. s, e 1 late :._ l e i s l . _h irst , · '-r .c : hers ... ion • •• • ' ovide t -t t b ~,_n1.,:s co 11ld + 1 out c ir c11l • t o t C V J 10n ,I :ra V e 1·ue of their bond T . rod b i:r .r . • e s co ' in ce t 01 1 llo b n.v: t . note he n t • e +-.., 1S ue 0 e 0 Ill er ce • o-f t ei 0 S • 1 t int ere . - y i . o~e e C n s e n e:.vce q 0.1. • t l- _e ,, + 70Ul t the • of t • red , .p- er cc fl C -r- e up J l . e , 'T' • \. .. tio • h "s 'fl! O d . ever lov . ore hen n i net, - . :...v e er c e • f t .. e s ,c 1ri t r t o lclric . ed . 1 r r r . - e e ra 1 ., r ovidi :for eYc h o f fo 1rs <-- n .. fo r-an , 1 s' f r thr cs ~ e - - 1 . . out of lus 0 ~ th s·ur-rend he in 2w r 1 ill. V fo _h ptr ller • • rt of 1 2, t hi er . 1 18 re ve hin • llt t en , .. s nor, h ·1 co1l d n t s ee he fll ure 1 ~ r o 1 t rl e _ _ r i n • t b ·11s efore 0 JI u.se, w '.J 1n ress, . . t co i o of the ec ond, V1Z.; .r irs ' e t b • on t r e bo ds, e e r · 81 • ' t here ould 1de C 1 . re b_e, C se t ould not , OllT .e 0 l of e _ 0 re e . n e • 74 savin~ for the T OVernmen t be on d the re sent i er o t th re ium . • Later t he rovernm n ?Tas forc ed o n or er .o u out the T easur oUI1_)l us. Thi s i ll however, to ether, ith w r . Sher1n n' tu , ,vas no t v .r -r:r favor bly receive b1t :r . , .. c ... herson's bill was onulsr wit h t he omriittee on ~i nee . 1 ith h e te, but yet f i led to b C O!!le a 1~ • han e s ~revious t o the 48 t h Congress. efore this d .:_ SC • the t • 1 8 ss1 on 0 on )ress 1n ore ove r , • • been de fo:: • 0 .o-old certi r v1s1on I. e re1.s e - icates con t · nued • 1 78. Silver t· . rt sinc e ce l C g 1 0.re I e of t lav1ful • 1 b nks , nfl natio 1 ass oci- e □o e . res ,r v Q __ na. l. On • not r eceivin s ilver cert · -Pie t e s . _ent of cle • ions l r i ho use bal nces ,ere b rre d . ror.i e .hers i n d . t e ole rin s e . Co . troller' s .. ~epo r fo..,, 1 • In t" e C troller's -r r 1 8 it . . +.er . re r r 1~ l 0 ... fron 1 1' 1 87 9, u l 1, 1 2 , 2--2 b n _ s • h e a 0 1 C it ~ 1 0 ~;150, 000 e t c 1 ere r anized , d ro t he 1 te to ul 1 , 18 5 ' 54 0 ~ t t C s C der th ~ a ., ion 1 s- 2 e • 11 old, fro 1 82 t o 1 8 7, 991 banLS er or ani ze wit a 3 C it 1 o_ 11 , 000,000 • ..,. I "A • . . t te ' 17 -180 . _ no:x, s r y l. .. e 1 t ~ . 2 i b , • 188. bi ' • 190. 75 Circulati on i n 188. ,erly in 1 886 '.,.r. _renholm as t h e si~t Comptroller succeeded I.tr. Cannon, , n th + y e r v-1 "lit essed t he 1, r gost dee re se o-r b .. nJr circul i n in the his tor r of the l. :i ional banki n s ystem, w ich d.ecrea e mo 1nted t o !'his w~ s die , as .. d blen _redicted, to t he pa - r-ent of the h i gh r +e inte es bonds el b t he ~ n s . In October, 18 7' the e.--tion of de · • • 1 • S1 1 f~ S 1 . 8 ne J b n1 s ca .. .. e u • t he y v ere 1n • 7 1 . to e 0 it t he fo11r nd fo r- , l ___ n - h ,~ ., • fa c the an - --.J,... on s .,.nic we -. e e , e c en • V e ove 1 1 n t f de os i ts, nn d the r l l owed • - . 1 - 'ID 0 ·were 0 rec eive one V lion dol ars for the ScT!l amoun of four - net - - h l . or , ele en b ndred h us doll f ·oy + e s · r e ar.110 0 fo r he • onl ·ir i t -f' . +er e st +· f om t i ff • he :p -lere re. 1. 'f, s - V n tJ ~ f • • 1 • be . b ,~;on . C l c e circ i on co 1 0 e s 1e n i e ~ of h e bo ds os.:t b "t c: nl~, t h . 1 .t ion of pe r c e~ • e ( n '"C tJ COllnt r T i .. i ni s hed th: s 1 ~ i on ~ 1 ri e e "I s .; re t..> ln n ext f f Oct ob --r of 1887 , over ~;;8 , 000, 0 0 w s -- - 1 tr s f erred f ro • Clr ula ion • of s e c 11r1 11blic mone • om troller's epor or 88 9. renhnl r e tired -f"r ..,!l t e o_ ice _ d s In 1 s ucceeded b~ o. • • c e . n h i ~ report f or 1 8 9 , \ T e L ce 1 - r '' - • no , ... is of nkin i n t t " ' p . 191- 192. 76 said th t 211 anJrs havin a c pit 1 of \~ 21,240, 00 a entered the system nd he si ificant t h i g 0 1.1 t the e ne ., b he fact h .. t the incre se 1 s most co s icuous in th l stntes nd territories tow rd w ich i . i ration is now tendinc, .nd th ~ t witho t re~e ence to conditions w ich before 4 d .orked unfav r- abl: t o,vard the owth o~ the s ~stem. _he Co troller ft1rt _ er noted h~i. t the · bsorbin g -rowt, o~ bi~ cities Hhich too • l er o s w ... re na i onal j_ ons _s o l e neces ity ban .. s Nere, .. lie Je . r s u ..... fo r chanee of c it 1 i uUCh b vili Jr sill , s befor the b or , ion f he s~all to ·,n, the b1 s· ness i no req11ire 1 .ore ca ital. I e ol • 0 11 • reco1 en 1 chan • the bank- n _or e 1n i e l I 'I were of e e . ; .1 ) t • .J ten er c e t. o.P the C ; t a l st oc of b nks • .av1 n ~ ,u_ ~p~OO ,O0O 1. ital cl les sho11ld be rec uired • bonds fo,.. basis of c ire tion, nrl f or b ri.th itil in n .. s C ~reater thi .. n t ha t a.aunt a m inirnUI!'l of t:30,000; (2 , thEtt cir- cul i on aw 1 ,, is s 1 cd to n ( '7. ) t h t t se - nn , c uc ed t e~ual on - nu rter o .... ar v l ue of h bonds de~os ited , u on circu.lati o ... ho -1 1 one r er cent . per nr i or +o t e Silv nnum • re hese uly 1 , 1890, nd co nsec entl r ,ere no cte upon ~tone , but t he ir i nfl · uenc e in Co ..)ress w no los s v v· s 11 see 1 no , " . . .♦ ... i tor o a :in ✓ in n T t . 19 . 77 pter XI A ·: I · T YS l .r ~l1 --·~O. 1890 TO 1900. T e Silver _ rc h s ct. _he ver./ f irst i -1 ])0!'t nt "ion of h nex de e de a s t e Silver rch .. se C . ., r ovi de t t" e ec- - { :.J. C l reta T of the :rre s11r be t t horiz ; Jo u rc se e c h nt eJ ,50 ' 00 ounces of s·lver hullio t r s uch t here . s .a b of re ch on t h , a he et • not exceedi ol - -le~ r r ice , or one 1 r f n97 . 25 • of me silver, c l t ~ e . ,.. r ains 0 _or sa e in ... ~ s no tes o_ t he nit c St tes to be ~ Sec re - I pre re ~ i 7 -u , t . deno • . lesu h ;/1 ) ,000 , ~.nd y in inu. i ons no n r ore n ! I that SlC s ~. . 11c1e to cnrr"T Ot he r visi on , l)e p ro:pr e r o t e . one of t 10 n ot} erwise art . ·. t • f t :. lS r r v i de es .. es r r .. de on . . n . . h ulli ection h t . n coin l r n ... n . 0 s 11.C re - 1 C ' Tie 1 J rt1 1 8'78 , de r • '7; 7 , 1 66 , '7 93 ilver .t- . C 0 r .J , 1l W ... 1C of 1 9 1 '- t 9, 1 t 02 • ver 1 . l n e _ he C S l. r a r ere 1.n e \ • , ~011 • . 0 b h ki _ n l re -t , 0 r e 1 1 n 0 C r c u ' ~ , 1 ~534,097,79r dded to the currency. 78 The ct of 1890 w 4 s re e 1 d ve ~er 1, _ 9~ , ut t he secti on re euli hus 11 iss e te d t t the t h lei Act of 1 78 was left i n ·orc e , d silver v1a s s1ls e ded . tion~l b~n - were no to b qc of 1890 indic se a to urnish the curre c y _or t econ ry, t le st no t in the i eci e ~uture. CirculE. i on Decreases . T t. . - 'J s if _icul o sti a t e o jus hit e ent t hese silver cts ff ec.e ~ c·rotl t i n beca ,e ft } s Je i ~ e ,he y {ere in force o t e ... c onditi ons co t ribtte 1 rel o the le sen - in - f b n note is s1e , aMelr he rise in he price o : ands ~nd t e a i n off of e blic a.e • . h . I I - u e1 . c · mini she d fr une O 1 881 , o <'P 10,529,120 on 2 e 30 , 1891 . rio of ond was s o h i h tha.t tne · ~ r elow hree p e r cent . teve · t e c se }1 v ever, circ 11 t i v a l 1e fell c n i n11ec1 to de - e r s n i l, on ct o er .. 1 , 1 0 , t he mo1lnt vi s on while the i ncr a e of . nno er o na i o · 1 b c1 nJ s ri n t h 1st ive er , s 1 • Duri n t eye r 18 91 r eat . n b nlr s f iled, an d c m- - 1 on th ~ e ·r's reco r , t h om ~roll ers id · n s s a c e; ------~ - - ---· -·- 1 2 0 nt " , ist or., o . odern n .. t S 0 s · 11e" , . 41. ' is or 0 nJr . n . i n h nite s es" , • 9 • 79 The failure of n., of these bank vi, .s 11e to gross r1-_ s .. nae;e , e t, and even cri~ i n lity , and Jett ere ha s been nothi t ~ t t J-1e i: t blic c o11fiden ce i n t h e national s ~7ster i s in th least Tt is i d.le , ne co n ; nuecl , to s 11p ,ose that a1 )s ol u t e i .. - .111 .:. t fr om f .. il11re c n be sec re b~ t1e oneration f .n , fuic fai l s o r ovide for bsolu nd com lete over nme t gua r - nt y . risis of 1 90. ,_. it the e c o1l .i ions of the llrrenc,r C 1 ! tJ of 1890 , ~:ic h , unl i ke the two former crises since 1864 , w s due to ca 1 1se " n a i nl r fro the 11t ic\e f the Jni t ec1 t t es. _ _ t is true t he t · t in hi c ountr.,r over s pect1l i on had been sorneVih t rampant , but t he is st r was os t l r dt1e t o eneral one ~r s ri e - c ., abroad . O n t his " cc ottnt tr ~ nsfe1 o _ funds o t his c oun r r om ~n le.nd ·nd + e Continent , nd not onl this , but vast .~o nt s of . s ec 11ri ties hel ~ ar, 1 .. oa n f O!"CO O the ... m eric i/ere upon ~ · e 'fl or r - -et l t of undue • • t hrou h which col- as r es e:x}lans1 0 1 n . u 1ro e 1 . • tecl . · ... h e f i l11r e of th Bari n rot} .. er . p s e 1VH lCl ) l 0 1 on a. he col pse of ,he ~) . c~'l 1 .1 v , to ether rv . t h - . c.,.... t o_ t e ..,'1 re ch 0 er .tndic te , of c 011rso , verified t ese 1 ntic i ) io s .. nd br , u ,. t b 1t dep r ,ssion 1 1 <:' r >rld ide • .... The y,olic J of he n "S ry s J k C 11 lo nl to t e ext e11 th t e o tflo v of old h d re :,rice d t eir re erve., nd - · - -------- 1 ~ "A 0 ' . s -or o B in he nited St tes" p . 1 95-196 . 80 1 0 th e .. te t lso o _ the de~1°n futur ~ • Dur- or crop moving . . the of 1 90 ho :ever, the lo • c,one in s - er n e ans10 e- and t e eva.:.lab res o 1rces o_ he b ~ nJ{ S ' f C 11e mo_e to th ov r a.c ivitieo of busine s .. > + n to the f j_ lure 0 lo n cont racts . \J At this he b c c 1 sed o-r lo kin too rr111cl1 to the rea u r ·u s 1 "'pl 1s to su 1 ba k s deni e d his s t .: eme n e eed i sue _ rrin i -es , n. siid hat r e r i on .or the th lw J S e ✓ .. i e as i d b -ri g -h, last ... e on ., i ort c. n lesson or t e ban rs , s r sult of his cris.:.s, wa that i InEd8 i V ru ev ident tha it lcS eces- s r o t V on n ore t h, rinim _ re( ire e1t of sur 1 s in or Cl · narir t o be · n s r ;, a i s 11c h e eree 1cies i n t he ire. T o • nges 1 , om troller's Office. _ .e e rQ b tee 1890 189 ,er , c om r a ive l n- vet ul. Dur· n _ h ver , ere were t~o cha es i o 1 . troller • j cey i , • _ e~ _. de els c ornes s h ninth C e f ris .:.q of 1893 . e e ~ r 1 s on o be re i. en 1·.:, on cco ' h o _ere · 1 • nc ~ n · 1 h nic 1 " , s , 1 90. 81 the crisis of t ne of th os t de ressin . 1 all the busines~ histor y of the ~ nited st tes. . on the causes of that tin,e we e r1 .., ot Ar t th one,r s · tu 1 • n • o e um- era te ve fir1d the ollo vine .I!lon the f orces . orJrin t.o rv'- r t 1 e reat dis+l1rb (1) lo r rices of · r products; e V ~3 r il f 4 , and recl~less fin ncin , .enerally • ... hen , as to ~he onersituatio, C ress 1 is sued i e s ., v o 1 urne s o _ n ne r c 1 a ts be t n o be ente ~tained of t e p ower o~ th sue, n busines en e1~-nrises he 1 rover . en to redee thi s ·s- ai t ow r t re enc_ of 1892 , ~ ro e n inve ~ ors be en lso o ou1 ) the a h .lity of in i h e ... ican ec r- ities ere retune i e • _et, o , · o 11. S OUIC- es of one~ su Jl GOld production, the , sil er ·s 1es , ~re ~sur e s d nk rese1v .bl dee re se ~. he c a11se of s o _ ~ n b a : f ..:.ll1res in :e ,, .ro r k • ~ a 1 e , ac co :.d · n ..) o t he Com tr ller s r ' )O t, -: i 11 , 1 , s . · he , e ail c a1 sed ent old ~ ew ... nd the . res _e r· V ~ Q_ ro . r . ncre Js - in.vl T . e-i n .. di ·i ons unti l ld e wa 0 1S C O ,1 C no ce ... . ove back to t center. O f c o 1rse, • i n so lon d .presPion s his, ~n 0 , s o com lie te c l .it ener n..l b1 sines of he c o • 0 ib _e ,Jo be s ur 0 jll -, vh X n lS . t C ibu d to . co • O ne o_ th no s -re t reo 0 t h 1 • 0 . lo ns 1 _. sus"" no r, 'le 8 r C 0 1 n e o-rfere his . n . 0 real reaso s s 0 e or C ion . - - ,ris .a ti 1 n in ste ', . 16 . 8 . ut ·t is evi den that it c ldocl ver ... ere a 1 t o t he s r in of b nk tro11s and , • uO 1 ev1ha t le ss de to he T e vv YorJ.: b .n t .s in ree, C'! ~,ho le. This c ont C i on con inl1ed r ... to Sflptember app_:oxi .18. tel y an f ter . e crisis ce sed to inv olve t he ban]: s at all. ·evcrtheles~, • i cl:e cl 11 slowl us inesc., ver n d . t · r:ie be f ore t t 7 beean to show l -as on e c oun r "'f r e ¥ - t . of eITlB.no Sl ns r ec ver • • • o r __ ed th 1 of ~ h Si l v 1 1.C t of 1 90 , cr1.s1s re .,._Je -r but 10 0 her le i sle .. . ollo 1e • re sul 1 1 n n ' i evide 8 ~O e b n}: r erv ria S n e e de t r 1 ec s 0 • the ,ntire st oc l~ , ld fo. shou.ld be Sl C s ·or -encT e- ' vised. - r o ·esso e of ~ ~ a rv c 1 .Jniv rsity , i • co .uen n u on t he le ssons to be l e r nec f rom t e cris· s, s i d ; " ~ ile .ere e ro r for di f ~erenc of o ·nion a s o la r o-e · o .e s , ue, i • t e ~ , 1 · e O c.. ~ b kers e neral • .ve the e r one otis idea t P adv; i.l i . o ren~ t t · sue of cle ring ho ,se loan certifi c t s inevit h ~ :nvolveo s uopension nd c r n - 1 • c -ry re J. 1 • .:- eco _ end on s of .r . ,a lj_sl • n .:> ecre ' + re er diss tis f c · on i i h an -r e !)res e ~ rlisle: 'l .. .. e ri es n e r h of 1 o he fo l 1 w .. i on 1 . , j1 r eQ f h b a n Tl qu ·ri n in . s " t • ons 83 of nite d States bbnds s s c 1rit r for c·rc 1l in . ( 2 ) _.' e rm it nation 1 b .. n1,: t o is u notes o _ ive per cen+. . of their aid u • , t1n1 . Olln ire< c a it 1, j._ r ~ require eac 1 bcnl.:, before r e c ,ivi notes, to de "'"' osi t c~ of Unite d e le r 1 te der note t o t he ~ unt of hirt .I.: er cent. of the notes ap lie ~o~. ( . ~ e cJ the circ11latin e; notes h ve f irs~ lien up on he a sse+s of (4 , _ rovide -fe - o "' h e ir-1r1 e di te re c e ~ p ion of Sl c . not es . r5. 7rovide fo r . } e "ecre • s 1r ,luo of jni te d C't tes fo r si nu rev .. n e e t ne le 7 Sl "'.C h • r e .. e · e 0 , . en .e~ no ev, 1l , re l~e .10 v ) - sh 11 seYen t r f l1e ion .~ c irc1 1 l • no e c e e c::-- cen • i on 1 taken Oll t b •T . 1 s +: t e ban: T . a l. n ' eC" e rec orrr. . rl ] 0 s • l ·. . tre f t - f 10 d Dec er'1 er 2 ' 1 8 ere ce VC G T · o ress .. s er. ... si nce t he - t • • • se c1 +- ., . e • • 1nec H a or1 · v 0 .J l s- i o t:he s :.. r;es,Ji .ns 11 re l os. ~die 1 • .. e sires o ... e -or m --,, e . 1n. r:rc t .. : fl e .i in _lO C l rrenc r r ., in11e d t is- c ssed 7 V T, .n 011 , 8 i - s \ . one esti o ·inistr ion . a i c 1 1s-icl re i c;n O f lt .16 ' it C ! 1 C l a -:i n f er t he eloc · o , t e cl i · v v a s vi len ' "<r e ' . ...... .., J - ic or ; ( ) }1 1 Con 1.i S -0 ~ "o ~rn - r; e q1 e s f • t ', I> . 427. r - fo e retire ' t of the Tover en ~ t .,s, a ( . s ~ , .,o ul b e 1 cte , 04 e ado - tion of ore fleYible b n17:: note Cllrrenc • r e c o i t t e o -f c i · z e ns i s i n +e in I 01.:.s, d a i Dec er.1)e--r, 1 8 97 , it co m leted its r ort , +reatin ; the n oney ue s i o i it< t ree-f 1 le r.: e ts: (1 . , de t e sta dar, 11 t to ~ N,re bl e;old, .. n c o c rr e 0 ctec _ara Li ns e , r .e div- ... h s ere te i t e re u. s 1 r 1 t o e called Divi . I s . 1 ~· c ~as vO be the cus todi no the o1d reserve . Tt ,a s :rr ov·de t t t ere er ,, s 1 11 be r · nt ined ereBa e onn f nite d St tcs notes d re s u r ~ n t e · t h n m in ~o abou ) ,.p 453,00 0 , 000 , md l s o t f ive Der cen. f the 01 st _ndi ilver dollars, at that ti Le -455 , 00 0 ,000. e , it rovided t ha ,nited . + te no tes .... nd Tre s u r r o t, s sl 01ud cancelle once 0 t e - - Oll n t O -f 1 ~ 5 0 , 00 0 , 00 0 , W t r i n sue _ urt er a r no1ln t a s .ould no .. e ..: c ee h ncre ' se in 1 b n1~ note ci ... c u7 ti o • (,, } The reforri of he l.11 ... note 11rrency r ovide or 0 ur due~ te ~ s cale e tendine over nine e s. · e t o-r b on t o be require t se cure ban r e - o tven - r ·ve er cent. o · c_ .. Il at 1 0 " J. • er t s r 1 , '"' 1 r . ,. vers ly o o r 1 of · ... o e n A nl1.: -r I < ~ Tte ' • 29 . e ost 1 . t T -r, s no .f st lt o h ve faile d o provi oft e co eti ion of t o - ..L c 1 ~ e r p r sent 1 v i o b nl s · i suin noteo • ~ ere sed, nd i see _s o bo the b n}ri it 1 . V ries in- ( .. no n . 21 . ) 85 the end of f ive ye rs tis rec irement w s to be re uced b one- - fift h a nua_l,; . 1 uld be r a d1ialI~ released f r oL b ond , bit it wa st·11 to be r otected in case of .. ile b rues , by a euar nt, _u d, de u at first of a depo si+ i n old . -r f . coin, o~ 1v9 1e_ cen . mmnt of 11 n ts issued n afterwards r1aintai ed by a rndu ted tax on ci r culR ..... ion. h "s t w 1; to be . posed t notri:tnal no t es n excep r e, upo to sixt er ce1 t . of t e ban 7.:_:_ C c a ·t 1, bu { s t e t ho ;,- e of t ne ce 0 I e next t ~ e t , ..1.. er cen • of no es , - • six er c e11 . 1 tt notes~ e~cess of ei hty er c en , o ital . u c., n . bill er:1b d~•i nc esqenti 11, .. 11i s re ort v1 s resented t o Co b ... ... l e . 1 9 th =-..0 1. s es consid- ress ·.r • C r une, • ere d . delibera el r .. nc~ confere nce on dif ferem es result- very 2 ed fin lly . t e weeping Gold 3 .... ndard Aot of 1 900 l • ~ The Comptroller' s ; e ort for 1 9. R 11 t before revie i n f_) tl e rO l ~c a. 0 i p s ed .Tarch 1 , 1900, i be vel to c onsider the re ort of th new Co P. roll r 1 C " . Qr "' 0 . , "odern .. nJrs o _ -S S1.le , • _3 0 - 1 • ..,ion of he h; s or r n < 1 nc ion o .... Co1.._ • e e .. ... la · n , inclu · · n sub s t et is reLort, ~s Drese te OU d C r} .. o - re o se of 1 o e v . 1 t · er · ca ... e vi e,, o r .,. 1 ) r 1 1 r r , 1 9 8 • r pp • , 7 8 9 j , o . 5 , • 2 - ... .J , re ts o. - 8 . r s io nc; 1 ec o , ol . • 7 -1 e 86 on. h ~les T . Dawes, . ho succee e . (r . .. ckle on n1 r , 1 8 8 . is report iv 1 rgel 0 t cs i on 0 1 a inst t e ener 1 assets . ~ no tes is 1e on ,., r. Da\ve s t s d voted -first. lien o i ion t s ha ~olic fO 1 re ul in los" t de o itors. e so O - nosed the ide of 1 o holders nreferre creditor s o f il, baru .. s, l · o there~ eLs o be no very o i st t t ; . , b c 1. ... e, ec l S e ~ositors re credit ors b T choice, , ile t ~e note olaer i s 1 s c .el ed to cce t nd es o_ e fro b sines st ndp it . t i s jp_ terestin . o n o t e 1 .1. t fro the first ~ .L•~ certi -r· c h n - in ,i 11 t is re, it, 5,151 n tio 1 b S 11 V e r e.. • zed , p o uno 0, 1 99, t ere h been 5 ,19 n a i o 1 b s, 0 le vi \"I . lon f 1 O\V t e .. ce· d 1 no<L ' 0 • .s d a ne · t o 1-iql.i ,5 J sill i n o r i ., i on • d a. he :rold Act. et ret i-0 1 ct it • r n 0 .s , n on t . . fOll r i n~ e re lill r, sec n 0 n 11 7 h di n~ 01 · 0 t· • v · de to . h n 1 no pr r e . - 1 ol ar . . 1n1 . • n d t a es' s ... r ) .,n . , n n 0 • · s lv .nt , c .. S ed . ..... . ' n ' r_ in , s ion , vii t ol the • .,l - 21 • ·h ·no 87 :i rie in th C n co ns : e rin i~ ction y section, i +- is fo unc1_ 0 rovi de ·011 , • t Sec . 1. ,old d 11 r t o b e st nd rd 1 it o value ·. ec. 2. e Secre r of the to set apart n intai 1 res rve o one hundred-fift y .il i o dollars i n o d coin "'" ni te St teQ n tAs n d b lio for th edel!lption of ec. ec. e c . te is ue u der sell bonds if ne C of "Tuly 1 , 18 O. 1 eans of re1le ishin s i d r ~ven e f d. • • 5 . 0ilver doll r t o re _ : le 1 -e der. Di visi on of ss e nd edernption es ·~ b is _ed. ... silve _ 1 • ea. i ' e 0 - rs re c o~. on 0 h t b act f 1 1 t 1890, h n e c. 11 1 01n t of Treusur notes sh 11 11 cancelle c1 silver . . • ce lC ~ e s ll0 • Sec. I ss of eo lc:1_ . icates ,rab t o o . der • • e ce :c l , t) 7. Tssue s11 ve ... ce ~ .... ; fi e of JI 1mde nl uec. o· e t,},10 n d ' ) )l 1 ns of v20, 50 n ~- 100 e is, ued e d "scretion of t he Secret ry of the .Lre s ~ r hu not o e ce i ten t ot 1 a om1 o s t i d cer · fi c a . ·, s. 1 ... ~' b O , e 1 _ o er. illion d 1 ar res e ~ ee s udden de t su p se e than t ere bac K over its 1 T • J ~ ' b C s , ·1hich · i n f or on , i ore s~ct c of r s . • t .,, n ote r ce t. of th one undre - fit e ' re S lr i corn · on error t o 1 tes e e , 88 Seo. 8. Subsi i' T! ilv c o e, such coin - e o t ,o e~- ce done hl d~ed il_ion llurs at a t iJ_ e • uec. 9. ecoin .. e of unc rrent su s· di _ r,/ s j_ l ver co·n. Sec. 10. S~ction 5138 revised so t h n o ban}~ slw .. 11 be or- gani ze v irit h l es t han ~ . 1 100,000 e xce jn c ·ties of not more th n 6 ,000 i nh bi tan ts, i1 e re only b t.nks of a ca - it 1 of ~?50, 0 sh 11 be o r ized, or exce ot ;n ci ie f , 00 ·nhabit n s, ,'2 , 000 be re tire . ... nd ci ties o 50 ,000 i a it 1n s r ror, 1 ca it 1 of t le ast , )1·200, 000 a 11 be req11.:.re • Sec. 11. eTundi ng of .nite ~t ~ tes bon s. ec. 12 . ~ is sec ion i nser ed fter Section 171 OT t u - 1.ltor - J w, sun i s . .. des i enu 1 o r V UA 01 0 • a 1 s e • enos e _ j tJ i . " of ot ~ s Il.t.,... Sec. 1. ~ J se _i-an u l l r one qu re _ of one cc +. d d ..:.s l o.L unon s ,c ta s .. 11 ver e t 1 -1 5 214 of J.. evised . t .,11t s TlOll TI t 0 ci cul t: i n , e cen. bon of . S UC t t nd. h ich wer. es follow; o e- , lf o · on J er cen . o vera r;e c ·rc11 ion, sem.:. - an 1 ly. , 11 r of on ... - 0 1 art r o one e ce nt. upon t e r.'l t of its de o ·ts. 1. s e r i - nn 1 ll " o :f one - q 1l of ne cent. pon . t er ., Ol 0 Cc it 1 t C - b 0 Ol t • . r,, es n 0 s . ec. 1 - . nterna • n 1 i lli · St _.J ., Vol. ,;, 1 ; • • '- ' • 45- o . , 89 efore the p ssa e of i ll, b nk not c·rc lvti n, as Yve t.ave s hown, /\las on t e decline, bl1 t now t:h. ro11 h reduced tax- ation and tle rivilege of issue o t e r valu. of bo ds, it be,. n to irr rove nd b the en of 1900 had increased ab ut ~ 90, 000 , 000. \ ld bonds were readilJ e:,rc .. ane; d for the nevi t 11 10 _erce11ts ~ .n . beca 1se o the s n1 ller r ofi ts to riv te ;nv eutors, 1 the b n rs bought t 1 1e ir bo ds • Anot er f eat l re of t h 1 ~00 c t l1 enc ou.r .. e e c :i. ere e o circ11la i o 1 req ~red t o con . ence business. r or rd ction of c arch 1- , 1900, t o October 31 , 907 , 2,389 banks v ith C ital J es "' I he~ 1 50,000 were adrlitte i t o t e s ste 2 500. e S anis v i t t ot 1 c ~it l ·ssu o~ ~62,312, on ,T e e conv ,rted in o t wo .1. er c on . s 1 ct, n i 190 J ( 190,000,000 in t wo ~er cent s were ivSl ed for r p i y t e c o s r u.c ti on of t . _ .... e .. naria cse ·ere b:I the b nrs, _nd in r-c, , os , o the on s a th· s t i n1 e • iere 1 n heh n so the nks . is f ct ho ws ho'l otent t h e 1 ov; r .,e onds o 1900 ' ie"" - ., -ir ·nc-r as·n 3 c i 0 11 tion -- it not _"ofi t 1 le 11 1i thot1t not issue • he onl"r · .porta t :fau t o be foun d ii th t he 1900 lav1 s h it di d not rovide f o r C of b s·s +'or ank note · - --------# ---- ------- 1 n .J , " ~ T • 0-,l of 1 • od J n an :cs 0 . ~ G'l e ' , ~ l 2 ee 0 t ... oller eport for 907. , ... . 5. issue, 'Jhich ~vould (W-ii t of e.. c re fleJ ible cl1rrenc . The In in polis Corimi ion co tinue to it te Co ress t"' _ 0~ - t c J . ra e, ecreta:ry of the re· Slr ' • 1r1ng .r. v.c rinley's anninistration, · .. s a v,ar advoc ,te of so e 0 1 h t e er 1 .1. ro s ~ eri t_,1 of the co1lntr., c 1se d the l e di u b siness ~e o cease 1rein the e sure. S eci 1 Acts of 1900. The Jcn r 900 vd S r t}1 c r n . s ory on ace o ~ "i.n of a c 0 ril nd : of th 90 he io n 1 s s e .01· , , esides rovicli o -·or he .. t b i: di r ec ors · e n i n e Ii laho1 ~ , ot 1 e _ y .i e ua. l i _ i e , c l di _j t o f o e r b o. _ ~ i g 1 11 , r~ . o • } , re ~ ui re o h v lj.v d in s i n t 11r ee . ont s i m i .te- ..4- r 1 receclin t eir electi o s Cha=l+.er .XII The fa i lur e o ~ t .e ct of 1900 fle~i le c ~renc r c o inued to be felt . . ~ r ov1 e r .tar ~ oft e ireasur! fr 1902 to 7 907, too { n e ·' .. re o-rte oib f 1 ·~t ods o re_ievin • t es r · ~ occ io e b this i i.perf e c t i on o-r tl e . or .. e ,r in t e l stee d o . si 1 de .o i i n~ n~s, h e too ~ bon _· ot l er .h n t ose of 91 the uniten utate s , -~ ..,...or, 1,..) - - .L. i nt ·ini 1r the nds • t J. t re • __ or ot de • 1 s l' 0 vft S 1 i r . er 81 .J. ... e 1, tr sferre l 0 he b n ~ o lll li ! alre - ~ut . 1: e ., . • -f9i • c-+;ion b , ,, • e n 0 · xr rte J 1S .; _ e 1S s ,, ... in \ hat • lie revert a • at • J Ol 1 ve l a p nic r· er 11 ° ~ J . • j_n or . • C ·1e \!l as C - 1S s ,,. .s n~ ]' ... ., I ') s 0 . T ., ew Y or ~ l ea~in _ o s., b 101 _ C. n • cc e i 1 · 1 it fl O ~ er .r.i J is , cth- • 8 ce c ) n o e 0 ... 92 resen t. l a.vi showe c l cle a.rl tl1e need of ~o e ve r .,., i r-rpor t nt c n s . And after re eate u d · stur b tnc , of e rese r v e o . e ?J Y. r _ ban ::s and t he excee i n \ c 11 lo ~ r +e in t t ci v , "r . Jac ob _. Scl1i an · nternat iona']_ ban {er, -fi nall:I s1 cceect c in e t tirt _) t h e I e v YorJ.r Cha l)er of Uo . rier c e o fr c. ~ e c 1rr enc b ~ t ha + or .cni zat i n ovemb e r 1 , 1906. T l1e : -n o..P tl~s u o . m i .L. Lcc Ylas to l ioh contr 1 bank to e contr lle d by Boar o-r ·over no c.n designe t T .e C H it 1 er- f n n so ~e oft., e -f' 11 0 , · o o of , e -rre s1ir -.:_; . S 0 of old an a c t s e c 11s ~ n.: _n of lar . e r . . s ., rv e ·overn ·r ..,I t rriet 1 ·c re- serves n 1 -o s t e t+ov ernr1 .n t ~ent i rec ee rr. i .__ .11 forms of c rec i l s o 1 _ d 7_ s o b e r ,, c e .:. , ~ r1 e; s • n • s rQ n . a c o t e + ove r Jent do i , at i +s branc ., \. , the wo r ... no lone in llb-t r e ·: s 1 ri es . l sh oril ld V e fir e Jer c e t . re a f m , n ~ de . s i te d i t e tre sur v n t · on 1 ba n {s for he cur- t, ren .. _ re der1ption o~ t ... eir on sec ired n tes, an d. sho .1 r . ..> dee na ti ona_ ban_: n o t es bot 1 at i 1 - b1· nches . " follo ·1· t fort C! s , SU') 1 t ne 01 1;~ eedo b . 0 -- Sl e i nt eres - . 1 l se '!' Ctr enc -'" .tee:po eo YJ.erc ~ or h • n a- .:> 0 7if • t s ns • 1 S ., n el {2 n ~ of .r • l t o c e n r 1 off ice nd t 11 of its ~ e # dv s C . ort · ( ' it ~o 0 J. S s re ' sti c C r _enc es 0 t e : 0111 e 0 e r e f • e : i n er · od of . s re _n g c . ~ 7 Go . t 0 e C 0 r _ p . 9 . ~ c.. r ' - and fi anci 1 .. · e s .--- , fo -r_ _ • t 1 - __ r ue r r ~ s 01 re e ~ 101 ennbl , i to e e t e~traordi nar s 1 en rle a ,1..S for ot ca i ~ 1 an c - roncy ; • ~ , 1 · t ld li th - d 1 \.. o r ~ ., eve e ~'e e _ ., __ ·1·reH~1 r ~ the 0 r,r i ose upon t e lJiVi "'iOn of lSSl ., n 1 e er~ 1ption na on C- C • S . :-. . 1 +. > 1 • 0 n · "l. 1 .r.ec a e r ..... t o e r r r 7..e CJ / O 1 • e n Po o . t1 · on < "" t e ·••rens _: 1 0-- , ...L.- . ' o j_ts reserres ; (4 ) it , ul cumber o e s 1 c s1 Y s ,. ster then \ i n t ~ e :he c o n r .. • spos 0 . .. n c l o . r ere e , so · c ;.over - -_ e • s collec t · ons c. d a _is 11rse . e ts vvo l d 1se ne · t .. e i~ co n r c- i n n r ir1fl • i on. A t ~ .. er 1'1 n . s :p l see r. ec r a (tic 1 .. ere , s o s · er b • l • .. n t _e .. n i -'-' o __ .r oe c S ore l .., C l :renc r · 1.n., na i n _ b .. vi e t e s -fift er cen t . i ts c a j_ t 7 · nve s te ·n un · te on s inst , ic1 it c ircul· .. i < • ., e ro unte o:f on . n t es . S u 118 s ·UC J c ire u . .. i on , c l l . is~ e a it. i o 1 rt.:.on 0 C i t c 1 an • s11 ec f 1 rth o · r o J 1 so t } 0 1 .r I e S 1 8 or n . .I _o ., 1 no t e b ,, a to 11 rd- or ... . .. t e . S S1 • ' 1~ j l • s e s c1 re 1 r n L f 8 l) () i Si 0 I red io .1. e s 1 ) - r e s 1i_ · w s t o e f 0 .. rA no lo r 94 ~ e AP-J.eric n ~ nker ,onfer : 1 11 the ,ha ber of o ere • ut still . pl~ di no see s t· s f c to_r nrl j i nt c o. ittee et ~een rep rese n t t· e o n . of t he eric :r .: nkers s s oc i • • inte .. .. .1 n a ;:J • JOU.l Vla S • r h s 1.uni tt ee . e at ··/as i t on • 1906 , , ith ..... .... , n over., er, I • • • e b r a s r es id e 11 t , n :I S1 b itted Oc S Ure n t clif ere l . 1n rinci le ...= 2""0 !1 t } at 0 t .e (f ber 0 Co ce . • of . ,, - e .s . ed ho ,ever, s o a a na ~ i n l ba _ . i ht issue a n r ount of notes ... :i t h l)on .. s e c ri ' 0 e 0 .... o r.&.. • 0 1 · t s ~ · 1 · _ on s ,cl e 01 rc1 a o_ , r V no o e c ed t ,ent r- f ·v ti er cent. o ..... i s c it 1 , ~n t he e ote s ,:er to b taxed at t he r a e of t wo er c e n .. . ~ .-er · nn • . ' r ovide d fo-r enc •r 1 SSlle ·, s lf er cent of . ) e - it 1 , l r .. er, 0 1 e !' ~ s -b .!ec 0 .. t , ur y t ,elve - nd-a .h e :"te of 1 . cent. 1ve or _h.: s cor1fer ,nee J_ ~n re~ lte l in ill . e ~ . _)an .. 1n no ro ch consider- t o ati r n e se~ Li o.. "" '.hie 1 it d.ed arch t 07 , u he e- .,ort o t or.1r1 · t ~ ee r s ~avo ra b l :':' r e c e i v ~ t tl .ntic i , n t ,0 · self , ~ s , o n i llC d o . r o o s e __ ur t e r . c 0 -6., lo .J • s lc .. i n • • s I f i . c se1·v 1 on . n , _h l i en ' T _ is a ✓ t· e i n nci l ,r .:.s.: of 1. 07 1 c ,, s nee ... s • l e -1 ers a..; d n bel·e } . e o _ n .. 0 Ql" a ' - - ~ " ' J. • e i ev ~rt ele s s re d or th ec.. sure jllS resent e r) .,. tne joint committee. .1.he .. 1 ri l ~ i ll . .!Jllr i:n the _ e n t iI e 1 ·· r. . ldric 1 la nd it ~ rep rte\ f v o a bl in the Senate. bill was this; it allowe rl (:;500,000, 00 0 · s r pared .. b i ll In s11 stance the a i _ 1un issue se- cu~ d QT t }e deposi t of unicip 1 v n r ilw a v bonds O ce~tain 95 re q irene ts - he sec 1rit b n- o ed . .:. e i s 0 e tax d e o-f • 1 r> e r cen . ~;\•hie h i~ r te o-f t .. at · on 1 c 1se reti r.rnen . fuon · teres ra+es ~e re o b ove · ne r cen • ~ 1 e ill 0 favore ·n the Senate Olm_ li tt e enc o1 r ·e n '"ti J1 the ouse • e OY'1 er i ll. ~ V T bil _ h -r o 1le r v.r s p11 r i t e ~ _ ou s e i G re )O T . f . vor 1, · h t b _ n so . e a _en _ e s , on ~e r u r 2 , 1 90 . I r ovide i~o r t ., . creu1 tion _ · o J. ov · d0 d o ~ 1 e r c ure d s s e 1 • e bill sec OS s ~n i n ~ o cl i ~ i n o ~ 1 n n 0 t J re e , o = no e on th . er 1 o n t o ..!.. · 1 t i t e ond se- f .. o e opul r r:>r ( b r 1 e c 1 e i t s ·, e 1 J. fo . a r f 1 xa ~~n i on f l i .1e o i e . S 0 I S11 .. " . 1 o. t • • e 96 carie _orv1 rd v.i h in- Ir . Vee r ls.n'" n tended to mee t t e ob ~ec i t o the Aldric }-- 3 · 1 1 introd1c-ed in tl e S 9 nate . Th.at objecti t i S S 1 , A t b , ll C e u or1 lent, ti 1 ~ o 'll E, ' .. i ons, b t r tho r upo ... . c ur :r--en t b 1 of t he · c 011 :r tr eJ • :r . Ve -rl n ' Q r,i ll ro,rid~ d fo the ere ion of ss oc ·a i ons in cle ri n .. } 01 se districts h e r t _e b . ,_ n s b - lo i S " l or 1 0 er e i Etl S8 OC i '., ,, i 011~ . _hi s 1 rec eived h ~ n e F o r.·ler c n · t p a ·sse the T ""ol1se .~ a y 14. , 1908 , b,l e· 0 ht r- Tour to one h dre fo rt r- f ive . ext d .,.- L r e s .. nte l 1 o d ~ . .l'i e o-f the I Nas 1 t . ~o .. ,;e A J ~ .. fo r t_ e c l os 0 the nC,I,. sed b ot _ ~ use s ◄n b .,c a ~ b i ll .1 .... r 1 _av le s s r C 1, vot of one hundr d e Sen te h owever, he .£ . l d~ic J .L ; l • h "s • ses .:.• ;ion, t ill 1 ' 1908. As t h e ct COi t ; 1 ed twent·" . :p s s - ~ sec J1ons n _ w '1 n o r .. s the ... l.ldric - veer d l e .ore o r s v 0 !1T>O T .. , e a - · tJ ' . e c t i on 20 , s e 0 , 191 . • of ~)500 , 000 , 000 0 b K notes T tes \VO ld be is s 1e d. t o . 1 .,. nit --1 n d l. n t; n - s 1 1r i 1 ...., u._ n l . v,ho l ; n i n 1 . ' ,, " tC t . .. b e v e it is 0 ex ire T p rovi de d for - - i -ro i n 1 1lS . l co n r 08 , 90, • 1 e· r st 1 • e i n e ' 0 . 99 . • 1 _5 an cl cons · der , a bein st + • C 1 ,J t • . , r. 4Xl . 11 1 ss1 1e Ce . (Sec. 5 , . l ,, ro o_ l OT: b S 1l: h ca) - SllCh Ol1nt . not ] . v • re t h n t e 0 t llo , ble o f di (Sec • 7) Iotes a thorize b~ t is etho e l a-vr c ; i 8 l na io alb n s a, in urpl 11s o-f twe t er c en ., nc 97 i b • ion . onl,r to • 1 vin alre a d.., notes in circu1 i on n er the ol 1 r to the I un of for t , cent. o· f the·r it 1 . the o tes • b- oth er ca ss11e I t he n e N d th8 ld lav1 ,:ere , . i te c l 0 .... e co •• b i e .. a it 1 d . ..... 1 lJ 0. surnlus of the • • en (Sec . 5 ) t etho l •=> u1n ~ ere w ,r ., 0 c- • f or • c irc 11 . . r1 b d i ion of tl1e s ecur1n __ i on , VlZ .; . Co ptro_le~ sec e b r st te n _ 1.m i c ipe..l bond~ 0 t l i ~i tio n , • of t h e""" V 1 e f 11cl bo ds, ( , ec • -- ine pe ce: n • - t ( .; ) ati on 1 1 emitte d t o form na • oci- 1 e re io n C l r_e C as ati . 0 • ti o11s their bers for ns I 1.C e e s unon - lC Q_ ' , . n otes -t o S11 rt e c h ot c_ 1 Y'T c· 1 n ee. ~ - sec r - J.I 0 t J . . ot . ie • 11d.i n< .> erc i 1 0 ... C '"' e ec u~ __ C c o ~ ... .... ' • . t . • ~l llSt no + note • e :.. .1. r ov 1 in ) lo co - e C 1 e:r- 1 S e ~ b e 0 .irt r er cent . 0 both t ~e C it 1 an ..... n ► u1nlus of e . i l ( ec .l) are-f 1 . t i v e l "rnita • s ,• sor1 ions · ,e "'e • • 1 C pon +he , e • • ni ne co ' e C a l f rth e _ .. . t ho . p e . 0 )1 1n sec ·ion . t · ,ill b re · L e ~ b .r e e l }1 ver 0 en cause f o h er .:.on t • feeling at need - lS C l s e ere \ 1 r n 0 el st .:.c C1l ~e nc 0 ee t n 0 1 t h e f c han • nee s n -. t . b • 'h1 t t o reliev .h in i es n sines , ~r'le e C ,r s ,ress es 0 n e otr i n nc for l e, a t of the Cxisis of 1907. To for • . 1 . r ov e l S Cl. ecess i a 0 e ... l.o t t 0 he r .. C hz:.r C e t r 1l ~ca e • • ted, . h e r 0 1 0 inse l :>ll s t • f ir . 1V 0 ce • nnl . 0 e r 0 01 ... 98 circ 11l a tion n one e · cent. "' onth er • .. 1 - e1 e 0 six months a _ter dat e o-r . t he t ~ oulcl b te lS8U.e, 1:• e r J)er C nt . (Sec. 8) Thie • • prov_s ion w s de, of co r e ' or t h • v olun \;it h draVi al of s.11 such ·hen h shoul 'l"· 1ss1e s T ce se - "' be rofit b l e . The la co ent o_ !Ia t i nal J. .' one tar~ t o report f r orn ti . e ti e . t nite + . tes i n ~ . 0 e ,r ' nt . of Iss e " ' bserves e c hie f de ec s o e bo t Co Q s s :f ne . • h • -rovis on or a )01n • io _l1nc tion should . 1S , _ose ·t ~ s N , · _ 1 ' he necessf.r ch es 1 er • (Sec. 17 or of ,· dern h ·s · s of 1907 ea sl 0\7e ec e o e s rs e , , h er 0 effects o he • e ress1on . · e evcess of notes f oode l int o he .,reasur r for or rece~ ion ' a. his f ct c ~rt i nl r ove .... e .. rre c Vi ic be OL e redu dan in n al . l - c 1.~ la Ji n , t he ban .. s . y e~ \ .:. eekin 0 e C .. n e • 1 r a:p 1 . le fo ~ le te nd ~ a - ind • h . . t O S i.. l r ne , V,; r lrl aire e ' stren gth the Tre Tl1e sil ve · . f . 0 en P, - S ll~ res o r es . c e·r J.. l- ... te . rece • the . o-r 1 8 93 , it 7 111 l)e rene C 1SS e l. n1c er e ' ad si .. il 1ect ~ ·ts ts s t eI • e s on e o _ r s 0 e - 0 e s - The e ~ fect of h · s e cesqiv c 11 or rec emption in 19 8 was not ba h ovveve ~ - , , ec e t e r e 1r ;r b l nc e · 1 1 s V r r 1 r e ' t he C i e nc · n t " e o sta , e l e blishe( no n t 1 e sine s w s f e • 1 This a c t • i e . T 1 t p h 6- 1S 0 ]. e ' ' • e • • . tl . . 1 11 l O n Orl. ~ro_ • 1 e r sc-1 t h t OY, l il 77 • l on r - · o s 0 . - in t • t Veerl • 1 ill 1 71 • Volt e 42. e n l - . 0 l - , • 99 Ch pter II ---- THE STA_ J S V _J Al'fr, There ave bee n seve > l rece t chan ~es int e b _n ~ in 1 t' , b onl r o e t " t eq ire t an f . e re cit tion in the :, . f nn_x o his h t o e + . 1 . 1 c " o ._ e 1 i on et .o . :., e C OTISl('te_e 3 c - .:.s en 1rel ne .i in natio c 1 ~ the ro t 1 l . . ..,. 1 ,: y ~ .. L --c \ 1 • v i .t is doubtles , i ar+ i . eas , ,h e resul of 0 era i ns of e vi · b ~n? 9 o ~ er t . an na~ i o i ns +i tt t i ons, th .. J h ve l)een i e. is t ence si nce 1 870. The ues ion o OS savin s b n\. l s been before C n re s .. or , s .. i r..c e 1 71, 0 C h s e e s id r~on . . ,he sub ·ec t bot i n ..,o res ._ nn Oll t O f it t 1 O S J -i r. 0 oible O roduce 1 te, t .. o st te u o e r l1ment ~ } t ... v ,, er bot -ro,,. n i e e s lr,, . Th ocates oft j os 1 s vi s b n" beli ,, e nec es. , i s t e ~ l o t e vin ,.... i .s i t11ti n .- eq 1. a e :nro t i on S ,, 0 , h . re no o ~ n V ie h s nor 11 s e o s , o r o __ 1 on -' o in 1 e 11 . i to not C eriods . 100 ... hird, tl1e T are ot n1 ~ e r s e nou h , nor suf __ ici , 1 1 ell is- tri buted . The ri cipal f eature ureed i n is favor i fo 1 d in its r)ur se, n e1,, , t hat it ,oul enco1.rage f uealit· H t r i f t mon the -~eric n peo 1 , b 1 te chine t , c. - an this i es ci 11 . or the you uer class - to cq1irA h a i of re ervin nd utilizin suall earni ~ ~ . The easure ca. e bef re .el .st sesuion of Con s s Sen 1910. e i ll I o . 5 7 6, n • ~ as intro 1 ce b r ·C r. ,nrte , ... 7 ' ... fte:r co sidera l e isc s s i on t .ere, it -f . 1 ___ 1 na. "tr J) s n refe- r _ed _ o ,ne To11se ~ ,o · t t ~f · _ . 1 ee n , o cy .ices nc S ~ 0 • eri 1 c11 n es . the f irs lac e , the · i 11 as i t c r! e f ... o t .. e o na t , p r . vi d . c t, , . " e s ... - te 1:. be · na r e i nto the ~ ·rs ~, sec on nrl ir c l s - os ices, tit : r o_ ra id e t . s fe 11r ~ o h t. +. he 1 o d .r T t. 1 d _ _ v ... ... o J. r 110 e . . c ou exte di ... 1 e · r O'\Vn. dis :ret · 01 , ~uide t ~ e r e 1 l t of e .. eri e e . ( e S A C O c n i era i on was t o er a s filllC h s 0 ib . b he · ov e r nr1 ent d . r t . en he e aVl n s ro 0 s. e il 1 ~ d r ov 11c '.I e ost r r Ge n .. r 7 h o 1 V . --- cl . h t> l i . t . d sive 0 I r 0 .. r es . J l 0 ·o S clVl 0,..... - ~ r . Jccre r•ff -f t he . r e J llT "" ;-- .. }10 lrl :n 11 ' · '"" -- -...,,,....,, 1 ...... 60th an}~ o res s , I e ~s ' :a [; z irle , . . e ort 1910, ti o . ., , p • 11-1 . • - 71. 101 the one r , and t t _ e ttorne "'C General h , e .. 11 11tho-ri t i n de terriinine tl1e law. This, t e Co .ittee cha eei so as to ' os+ authori t of th en ire ~.naee . . nt of t e e ~ ~ ste r, co .ie dor the · J _ r11stees as ,ms concerni c he ts of th ~ nove!n . n . e r o'!. -; nvest · n , le ft1nds . ": .e ne,-,:t chan e ,~ f evv Vi ords in the ene .. te 'SllCh "\ . ..> 1 or · Are c l angecl 's u h b :n .. or cle • ' n ..::s . , n , other si .~il r ex ssions re erri , 0 a C t -C st,_ Sv terr • .. • .. e 10 C a 0 e r · tion e ·e . ., ., e 0 e C l se. r 1 a c 1 ~ s o ven e ...... iH.l c .. o r e .,ive n :: s in .1 ce n . . J lS C ! 1 }1 ;ever, VO! the ;fl r .J,,.. . - . .n - 1 on _ or t n t 1 .. e r, . 1 ., :, 0 0.o en·· e l P. • I .J 1 r } r isc 1 s.ji on on · ~t rest fo 1 1o ed l t . 1 T n 8· OP. e , I et ·. e e he t 70 H 1.se s reacl1e ,.. 2, ~1 ,, a 1r • • II ~ e .1. Ct. sit re a 7 ! co it ine c s v e tee n a , s t t e d 1) r.: e f 1 , , · its ti 1 r· nci nlA • r ovides fo o o ; ·. n , : · >0C. 1 . , or o s st ine;s s i ories "n or oarn of _r s es t o c ntr • _ ost _ste , A .,r .. _ f he e c. s n r r ., At . rne· v ren .ritl, ctin e x - off-·cio, h., arn ~.ke s ~ ci ied e J il a nn11 1'8 0 "' S o ,on e ... ... cc. 2 •• St ups f or freP. · 1 at er. Sec • , . :Desi i 0 osto-f'fic s b the O c r '°. C • • De • Bl s ,r. ,o V • Te rs· ' 0 b • 1€ • 0 l . JS I .e 0 e • 102 Sec. 5 . va s s boos n ot er ecessary devices r ovid d . ec. 6 . Denosi ts betvvef-l l '·· f I 11 -for 1 es s . o u n s th l'1 , ~.1 . Sec. 7. ,r .nr J tere l o e crcd·t of e os · t ors. W it hdr wal f ~ c Jounts subj ec t to ree lat1on of ard of r r 1 s te ., s . Sec. 9. ,;,unds t 1 ) de osi te in s olve t ban s , i. t 1 interest ct ot les , th, n t net ore--fo11rt er c t . D 1e se- e 1 .. nde d . r e t n thirt i er cen . na at any t i r·e lJe inve8te n · n o ds, s i xt - f ive er c e t . to r e in .:.n ban .. B s 1b ·ect o specifie .. ·e os 1, nd t~ + i ve Jer cent . be pl ced wit the _reasurer o · the nite t t es. De o s itorg rre -:0 In;te l t • e s ones n • l c f de osits . Sec. 11 . .. e e . p ion of. lin i ted St tes bo n ds _ o _ s a vin s in- ves t .. nt .. ~. cc. 12. os t 1 deposits .. .. e1 1t s e:1)ar te fron other 11'r· r o e ~. 3ec. 1~~. * ~ • • i . l l. _ co n 1 o l o 1 e.. ters · ~ n four t c l.as~ office s . 1 • • Q __ overnr.ier .. t U!ld t bli hin ec . • ro r1a ion e S 'St e . . ec . - • -· ost i l el 1 l s p .lied . ec. 16 . f ,,.1 n • te St e e e . for n e -. cc. 1 • e 0 e s;t .:. ec J 0 or e of C rt . 103 T 11s, in su.bstance, the ostal \ct beca . e y la b si g - nature of the Jresident June~ , 1910 . Some of the res11lts of th~s act have be ~ n anticipated b1l t fol · 1 ra.ctio .. 1 , ur n se~, erhaps, the ood or the ill t 1 tit to b lear e b./ experience . Conclusion . .y bring · s as : et ,,;;ai tin·, mh1s, . follovin the _ T ational an r ~ 1 rstev throu h 11th . olitic 1 nd econoMic ondi io st t ,ave r o tits t es e ne r con ii i ls t h OIT b ., h i c} it is ada te d 0 t e ) r os , t h 1 ot ho 11t, _ a be s · 1 e 11p under tne t h r .e r.· r e s~ l;. \ T O ·I , S~ J ?IT ... , ~I 8 TICITY • .. 1 e this great Institllti n s hall h ve beco1 e s o ,~;ell re ulated t it t o ic 11 1 . t 1 co nc l · tions, n ·- ca a l se <.. t el , 7 t • • 5-n . t hese ea r 1' ee ever e ~ er · J YlC ' , .n e s Ti e I J.. 1e - 4. t • t hen, not 1 m ree 11re e1 ' n i l t e .. ' s h 11 r'I r. ve C. fee . • ste l .. no 1 s • Feb. June ar. e • . ':ar. 25 , 1863. 3 , 186 • , 1865. 5 , 1867. 2, 1867 . ob . 10, 1868. eb . 19, 1869 . Tu ar. r . Jul J 1 ul r . ne , 1 69. 6, 1869 . 8, 7 70. 12 , 1 70. 1 , 1 70 . 1 , l 7 J. 8, 1872 . A.PPE_JDIX A - A rr10 JAI BA TKS A n act t o r vide a nati n - C rre c sec u.re d by a lede e of United St tes stocks, nd to :p r ovide for t e c irc11la t ion redern t ion t here of. Act of :B1ebrt1 r 25 , 1863, re e le a reen - acte d ,vi ~ cert in a1 endrle ts . Tay on b nk c ircul v t i o . St te b _. k s con- verte d M , r e t in nd _ eer i o erati n br nc es . . anal t f or i i ta.tin banY c i r c 11 ti on . ofunding eYcess ta . Taxati on of ala.res of mti onal b c1.n sto c k . Prohibitin loans on Unite d States or b nk notes, or withholdin sue . note Ll lse certifi cat i on of c ec s . ional ro use. enalt for e1bezzleLen , ab str c i on, etc. Pen l t :, f or e . bezz l e ent , bs tr~tcti n , e c. Is .... 1 e of circ l a Ji on red e1-able i oln . Liquidatin bank~ to ret·_e c:r ul ~i on . Leve vort s rue 0 1 t s re s er v ci J • i t ed St ~es otes (re e 1 rch 1 , 1900) . Feb. 19, 1 873. . ar. 3 , 1873. ·ar. 3, 1873. I ar. 3 , 187!3. June 20, l 74. l 8 2 1 74. un 23 , 1 8 74 . J n . 1 , 1 75. Jan . 19 1 7 5. e b . 1 , 1 75. e b . 19, 1875. I r . ~J , 87 5 . a • ' 1 7 r- • une 0, 1 76. eb . 27, 1 77. e • 27, 1 77 . Feb . 7 , 1877. ar . 1 , 1 79. e . 1 , 18. eb . , 1 1 . 12 , 1 Jul 1 , 1 • ly 1 , 1 82 . .. ar . , 1 • eports of sta e b n s . 1~xar.iinati on of le .. tes n a. dies . Assess~ent f or i Jair _en of c it 1 . Use of the wordna.tional . Fixin the ~ount of nited States no tes, ro vidin for A j redistri b11ti on of na i n · b n c11rrenc , etc. II · · . .. acer o_ ni te t es a n i onal b a n . note . on ~ c ec .s . ( e e 1 ·• ... r . t a 01 t · c · r e J t i o o t limite . Circu.la ti ot s o t · o 1 ol b • ev1se t t1 tes • • Correctine e .r ors v n o i si o s i l11; ointr ent .nd c o1 pe s i on of 1 ) exc iners. Disti nc iv J er or ri ti ot s . Cleric 1 force or r e ptio o circ11l .. i 0- ote o . Receivers , a o·nt r n of . ~xanine tion o__ late n i e s . Re orts t o troll er. Dest r 11c ion of re dee ,a. no t s . e i nnu 1 d Conver i f ld n .. s . Verifica i on of re rns of i rur • or e ex.:s e e ens·on of . e o lcl. c r j f i t s • i 0 1 el r er i ri C . l , r ~ on . ·ar . 29, 1886 . , .ay 1 , 1886 . ar . , , 1887 3 , 1st 7 . 1 ) • 1 '7- , 1888 . July 14 , 1890 . July 2 , l 9 . ' 1.ue. , 1892 . J n . 12 , 1 95 . • 2, 1 9 . • r _ . 1 , 19 o • • ,) , 19 1 . • ' 9 • • , • e • , 1 0 • III Insolvent ban ~ s, Drotection of trust funds . )e ts b • .,r use of Inc,reas e of capi t 1 stoc .. , change of n af'le r locat i on . Res e rve anc1. c e11tr .. 1 reserve ., i ties, p r ovidine for ad itional , etc . Cou.r ts , j l1risdic t i n of . Courts , j ris c i on of . Dis osition o_ re e ption ace u ts . t olen r l os t national b n _ note , re e1 ~ tion of . ent of narehol ers • n 10n b K , point - nt of; s cct f une 30,176 . r e o r ..:..n ointr. 1 J • O t 0 of . o th 11 yenc y , 1.0 1 e r ' li ic ~ i ons ct of u e O, 76 , d ugr t , 1892 . 11t _orizi. e b bo ds , c i on , t • 1 d ~ r")OSi r .a'"' 1 0 R , 11t . • of te r iz l n r 1 re r 0 -PRi l e d he n1" . • 1 • • l 0 re Cl 1 ~ I v ' • i . of i C 11. 5, 0 o. i i r l ,. tin, e • . s1on 0 e t o , • n i • l ' , ~ it 1 , 0 O; • c h rt • • . c 1 i on ore .. ' e • 11 . 0 1 0n , ec. ' - 05 . une 22 , 1906 . en . 26, 1907 . 4 , 1907 . • , 190? . . " a¥ 2,., , 1908 . a 3 , 1908. une 25, 910. IV Taxatiort f c·rct1l·. in base on ananft f:n 1 onds . 1 : endron Section 5200 , l oan limitation . olitical co ntributionu prohibited . Adcition 1 o es f report of Co1. ntrol le : . bl ic deposi taries . o certificates nd nitec State 1otes, issue o . \d ition _ De 1 tJ or trol er . uthorl .in ration c1lr ency assoc -i tions , t · s e of b c ~ ,n : ., i . 0 11 i on , n cr 0 a ling onet 1 : i · si on. . OS tal a vi ne n ,7'" c.... ... • V - S -~CIJu, ACTS . - A r . 12 , 1900 . at i onal b·inl~i nc ls .. ~rs extende d to ort o Ri c o . A r . .:;0 , 1900 . t!ati onal bc~ nl j_n ..1.a\VS ext ende d to H .. -av1a 1J . • ... 2 t 190 ~ a t i nal b· . lav\ 1 s exte11aed to ndi an e r r i tory . ~ .ay • J':ln . ... ..... -rs,"'ay 2 , 1 900 . "u.ali f ica t i on of di rec t ors i n Okltth ria . ~i f t~r- seve1 4- CC I.JS c hanci n ) loc L t i on r na1 -11e , or both , of va~ i 1 s n~ti n 1 n}:s. July 7 , 1838. une 30 , 186. \· .. ar. 3 , 1865. Jul~r 1 3 , 186 • June 6, 1872. Dec. 24 , 1872 . -r,ieb. 8, 1875 . 1 : a r • 1 , 18 7 9 • - e b . 25, 1862 . · .a r • 3 , 18 6 ~ . and ~a r. 3 , 1064. June 30 , 186 _. - A · :s . Issuine circ 1lat i o o e ire uxati n f st t ban ::s . Ta,~at · on of' s ate han .. s . ~axation of state Taxa t i o11 f std. te banl:s . Taxa i on of Taxati no~ st _ te b nk . Taxati on of' st · te b m:s .. a:xa. tion -f na t i nal b .. note VI s JCia i on . ncl. notes .. nd certific a tes of nited State~ c·rculatin ~ as currer1oy . Tnxation of national bank notes an ~ n tes nd certific tes of ni te cl States ci ro1ila t in as c urrency . Taxati n o-r nati n 1 b m.. otes n d n te s nd certifi cates of nit tate ~ circula t i n a c 11rremy· . an . 28, 186. · axati of nation 1 b k notes . n t .. s c n certif ·c ts f ;nited Sta .~ c·rcu tin e a c11rrenc • July 14, 1870. Aug. 13, 1894. July 17, 1862 . Feb. 21, 1867 1 • July 17, 1869. Feb . 12, 1862 . Fob. 25, 1862. ly 11 , 18 6G. , VII Taxation of national bank notes an d notes and oertificRtes of United States circulBtin as c11rrency. Taxation of natt onal bank notes and notes and oertificates of United States circuls~in as currency. Taxation of nat1 na ban1r notes na notes nd certificates of United States ir ulati as c1 lrrency. Restriction on notes less than ne dollar. Forei , n coins not le al tender. Demand Treas11ry notes leeal te11der saI!le as United States notes. De and Treas1lry notes eg 1 e d .. r sa as ~ ni te States notes. De1~n d Treas1 r n tes le g 1 tender same s United States notes. Derna.nd Tre c.Sllry notes le R1 tender sa e s United States not es . ) Denand TreRSllljT notes le 1 tender Jan. 17, 1863.) ) United States n tes. r . 3, 1863. ) t ar. 3, 1863.) Interest bearin notes le 1 tender t o sa e ex- ) June 30, 1864.) tent as United States notes. Feb. 12, 1873. Feb. 12, 1 7 • Gold c . ~ns of nited States le alt ndAr. !inor coins of nite d St tes le 1 ender t o a~ount of twenty-five ce ts. Feb. 28, 1878. June 9, 1879. July 12, 1882. 1 ,ar. 14, 1900. . T ar. 4, 1907. J11ne 14, 1866.) ) J11n e 8 , 1 7 2 • ) ) VIII Standard silver doll r le al tender . .-. Subsidiary silver coins lep,al tender to amount not exceedin ten dollars. Gold certificates, for ~h a rec ivahle . C11rrenc y a.ct. Ar!lendin national b n act . Tariff Act of 1909. Lar. 3 , 1873.) Govern .~nt depositories. ) Peb . 27, 1877.) ) e b . 3, 187 9. ) 1Peb. 25, 186n.) ) Counterfei ti t; un e 3 , _ 64 . ) nat i o alb n notes . une ,0, 1864. June 0, 1864. Feb. 5, 1 6'7. June 0, 1 76. For ing or c m1 erfe i ti n - ni ted St t s sec 1ri ties • sin plates to print ithou u horit, . _enalty for takin 1naut h rized imnression of tools .. avin s11ch i · :pressi on, r deali c ire 1 ti 011 • rke in counterfeit United St e r udulen notes to be s o of icers ..nd o f"cers of i o 1 b 1n s . BIBLIOGRAPHY Primary S011rcee 1. "Comptrollers' Reports since 1873." Government Printing Offioe, Washington, D. c. 2. "Congressional Directory," Compiled under the Joint Committee on Printing, by A. J. Halford. Government Printing Office, Washington, D. c., 1907. 3. "Congressional Globe" (later changed to "Congressional Records") Government Printing ~ffice, Washington, D. c. 4. 1tcurrency Report by the Special Committee of the Chamber of the state of New York." submitted Oct. 4, 190. 5. •Report of the Monetary Commission of 1898," The University of Chicago Preas. 6. United states statutes!.! }arse, Government Printing Office, Washington, D. c. Secondary Sources 1. Andrews, I. W., New Man11al of the Constitution, American -- ---- - --------- Company, N. Y., 1897. 2. Cleveland, Frederic A., The Bank and the Treasury, Long mans, Green & Co., N. Y., London, Bombay and Calc11tta, 1908. 3. Conant, Chas. A., !-History of Modern Banks of Issue. 4th ed., c. G. Putrnan's Sons, New York and London, 1909. 4. Davis, Andrew McFarland, The Ori6in of the National Banking System, Government Printing Office, ashington, D. c. 6. Del ·Mar·, Alexander, The Science of 11oney, 2nd ed., McMillan & Co., N. Y., 1896. 6. Dewey, Davi Rich, Financial History of the United states, Longmans, Green & Co., N. Y., London, and Bombay, 1903. 7. Hart, Albert Bushnell, The American Nation, 27 volumes, Harper and Brothers Publishers, N. Y. and London, 1908. 8. Hepb11rn, A. B., History of Coinage and Currency and the Perennial Contest for Sound Monez, The MacMillan co., New York, 1903. 9. Knox, John Jay,! Histo17 of Bankins in the United States, Bradford Rhodes & Co., New York, 1900. 10. 1'-'lagee, H. W., A Tre . "tise on the Law of National and state - ---- - ---- - ---- -- --- B!P:ke, J.B. Lyons co., Printers, Albany, 1906. 11. McMaster, John Beach,! Historl of the People of the United states, 7 volumes, Appl ton nd Co., • Y., 1902. 12. Muhleman, Louis Maurice, Monetary and Banking Systems, Monetary Pub. Co., N. Y., 1908. 13. National Monetary Commission, "Notes on Postal savings Bank Systems of the Leading Countries," Government Printing Press, Washington, D. c. 14. "North American Review" MagAzine, Feb., 1898. 15. Pratt's Digest Cornposins the Laws Relating to National Banks, edition of 1901, A. s. Pratt & Sons, Publishers, Washington, D. c. 16. Rhodes, James Ford, History of the United states, The Mac Millan Co., N. Y. and London, 1904. 17. Scott, Wm. A., Money and Bankins, Henry Holt & co., N. Y., 1908. 18. Sound Currency Reform Club, Accurat e and Timely Information 2_!! Currency estions, by Re f orm Club Sound Currency Committee, N. Y., for 1896-6. 19. Sprague, O. M •• , History of Crises Under the National Bank ing System, Government Printing Office, Washington, D. c. 1910. 20. White, Horace, Maner and Banking, Ginn & co., N. Y., 1895. 21. Wildman, Murry Shipley, Monei Inflation in the United states, G. P. Putman ' s Sons, N. Y. and London, 1905.
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Asset Metadata
Creator
Edwards, Lyman Elmer
(author)
Core Title
A history of the national banking system of the United States
School
College of Letters, Arts and Sciences
Degree Program
History
Degree Conferral Date
1911-06
Publication Date
02/01/1911
Defense Date
02/01/1911
Publisher
Los Angeles, California
(original),
University of Southern California
(original),
University of Southern California. Libraries
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OAI-PMH Harvest
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theses
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English
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Digitized from microfilm by the USC Digital Library in 2023
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UC113174124
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Edwards, Lyman Elmer
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texts
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Undergraduate Papers
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