Delaware gazette. [volume] (Delaware, Ohio) 1855-1886, 1867-11-08
AL about al TationaI -.

2
propose to lay it before our readers, not
by way of defending the system, but
simply for their information in refer
once to an intricate subject which it
seems but few persons fully under
stand. We hope it may be attentively
read.
Z. origin Of the National Bani5i1ag System,
Up to 1868, our paper currency con-
sisted of the notes of banks chartered
by the several States-eaCh State hav-
ing laws peculiar 20 itself for the estab-
ushment and government of its banking
institutions, There was no attempt at
unifOrity in bank legislation, the banks
Of one STATE standing on basis entire-
ly different from those Of another. In
some cases the banks were held to a
strict accOuntab abilitY, and required at
all times to furnish reasonable evil
dence Of solvency, while in others the
currency was LETT to take OF ITSELF and
bill-holders were permitted to look after
their own interests as best they could.
CIhe banking systems of New York,
Ohio, and possibly one or two other
States, were the only exceptions to this
chaotic rule.) As very few State bank
notes passed al par in all parts Of the
country, the notes of each bank had
a different rate Of discount and the
notes Of the same bank had different
values in different parts of the country
at the same time. The currency of one
State, although good at home, was often
rejected as uncurrent in another This
state of things rendered exchange be-
tween the East and the West, the North
and the South, expensive and VeEatious
entaillng constant loss upon the busi-
ness men of every section. The notes
H.
ance cQunterfeltg Hooded the country,
often decgiving the ntcst experienced
judges, and rendering it unsafe for
most people to accept paper money,
other than notes of their own local
banks (unless accompanied by a guar
anty,) without consulting an expert.
Failures were frequent and disastrous
the loss usually falling first upon the
bill-h0lders, who were least able to
bear it. Ut was impossible TO tell what
banks were sound, and what were on
the brink of bankruptcy. The whole
certainty, ana the public mind was hl-
led with apprehension. A more chaotic
and unsatisfactory financial condition
could not we'll be imagined.
at such tins, and under such cirs
cumstances, the nation was engaged in
suppressing great rebellion, and was
forced to meet expenditures utterly un-
paralleled in the history Of any coun-
try. The national treasury was empty,
hOstilities were in progress, and public
confidence in the financial situation
was at Its lowest ebb. The Govern
ment could not, to any extent, avail it,
self OF the then existing banking gVa-
tenn, for, with the exception Of the mo-
bic response Of the New York, PhiIa-
dolphia, and Boston associated banks.
in furnishing the FIRST fifty million loan,
the Secretary of the Treasury sought in
-4se- o.
financial strength among the banks of
the country necessary to meet his daily
increasing wants. The only manner in
which the old system could have been
made even temporarily available,
would have been by granting the State
Banks the widest license of issue, thus
flooding the country with irred eeu1aDIe
and to a great extent, unsecured paper
currency, which, long before the close of
hostilities, must have led TO a financial
disaster and collapse. For not only
would the then existing banks have
greatly increased their circulation, but
hundreds of others would have been
Of times. This increase Of banks would
naturally have been greatest in those
States where the greatest license of cir-
eulation prevailed, and where there
were feWest checks upon irresponsible
banking. As the only means Of bring
ing financial order Of chaos, Of giving
the country a safe and uniform currsn-
cy, of restoring the confidence Of the
people, and, above all, of furnishing the
sinews OF war, our Government origin
ated, organized, and put in successful
operation, that splendid system Of Ma
tiOnaI Banking institutions, which did
much to enable the nation TO meet its
enormous expenditures, fight the war
to a victorious close, and which still
remains-one Of the noblest fruits Of
our great struggle.
The plan thus devised and put in
operation was not designed as q tempo
rary expedient, to meet a great emer-
gency and die with it-but was meant
to be a permanent financial system,
which should not only strengthen the
nation during costly war, but also
benefit the people through many years
Of peace.
Before introducing the new system, it
was necessary to remove the old, and
the latter was induced to leave the
field partly in consideration of the BEN
sicial features Of the new system, and
partly by cOmpulstOn, Certain rights
and privileges were proffered by the
Government to the old banking corpor-
atoms if they would surrender their
state charters, retire their circulation
md organize under the uniform plan,
iystem. Where these inducements
we're insufficient to effect the change,
he stimulus of force was applied iu the
ihape Of a special tax on the circulation
If all State Banks. One Of these condi-
ions on which the state Banks surren-
Tered their charters, aud couformod
themselves to the National plan, was
he pledge from the Government that
hey should be permitted to issue q GER
ain amount of circulating notes. Par
icular mention is here made of this
me condition Of the change from the
Id system TO the new, because from It
s drawn the chief argument of the op-
lonents of the National Banks, and al-
20 in order that the condition mention
"a may at one of the terms OF the con-
ract between the National Government
nd the old Banking Corporations.
The change ofthe old plan to the new
vas rapid end complete. Tho immedi-
te results of the change, although im-
,ortant beyond measure, may be sketch
d in single sentence It swept from
currency which was at once
nongrel i'm appearance, unstable im val-
Ie, and, with few exceptions, insecure
u character, and substituted therefor
currency uniform i'm features, every
where equal i'm worth and safe as the
Republic itself
1t secured for the Government an Inn
aed late and much needed loan Of three
hundred millions OF bank capital ana
throughout the country, si2f--
cen hundred most efficient and ra oh-
ible agents, for the negotiation and
dissemination of other and far greater
oans. am glad Of this opportunity
# bearing witness to the fact that not
My ia negotiating the first i've nun
red and fourteen million loan OF tlve-
'yventies, but more particularly ln the
ubseQuent negotiation OF the eight nun
red and thirty millions of Seyon-Ihir-
les, the country was largely indebted
o the National Banks tor the prompt
less with which the National IroaHury
vas supplied with sorely needed nds.
md the late soldiers Of the Uni0 army
hould understand that, at a tiue when
heir monthly pay was largely in arr
ears, the money not only for thor
wages, but for their subsistence eVens
gas raised through the active and earn
ct cooperation Of these same NationaL
lanlza.
such was the origin Of the AauonaA
3anldng system.