The Columbia herald. [volume] (Columbia, Tenn.) 1850-1873, 1873-10-24
A BRIEF HISTORY OF AMERI-
CAN BANKING.

CAN BANKING.
The Washington correspondent of the
Chicago Tribune indulges in the follow
ing "reminiscences, which will be found
readable in this juncture
Currency in America began with to-
baeco. corn. wampum, etc., all recog-
nized by different colonial courts. In
1645 Virginia adopted the Spanish silver
coinage for currency, and soon after
mint was set up in Massachusetts,. Pa
per money was first issued in Massa-
chusetts in 1890 and South Carolina
created bank in 1902. Pennsylvania
issued paper money IN 1723. but Vlr-
ginia never did prior to the war of indie
pendence.
THE REVOLUTIONARY PERIOD.
Then came the Continental money in
Nav, 1785. which did not depreciate up
to the issue of 5000, 900, and was well
maintained until the subsistence of the
triumph over Burgoyne's capture. At
last the whole $500, 600, 600 was worth
in silver only 50, 800, 900. In 1871 con-
gress offered to give new money for the
old. at the rate of ane dollar for forty,
and then both sunk in one day to moth
ing. In 1761-the war still going on,
congrese chartered the bank of North
America, which began the following
year, and declared dividends OF from
II to 16 per cent. per annum. Penn
sylvania repealed the charter OF this
bank, but it refused to close up, claim
ing a national paternity. The general
constitution then came into play, for
bidding any state to coin money, emit
bills of credit, make any thing but gold
and silver coin a tender in payment OF
debts, or pass any law impairing the
obligation of contracts. This left un-
said the light or want of right OF con-
gress to establish a national bank, al
though Judge Story maintains the right,
Hamilton at once drew up plan OF
such a bank, and the cabinet divided
upon it, but it was approved by Wash
ington, and the bank went into being in
1891, with a capital of 10000, 900, one
fifth government subscription. 1t was
success, and paid s per cent. dividends,
and it's stock-partly held in Europe
rose above par. In 1911 Madisonian
congress refused to renew its charter.
THE SUSPENSION OF 1914.
In 1914, fall of the year, the Ameri-
can State banks suspended for the
same reason as at present, to close up
before they should be drained and
bankrupt. The middle states, which
had subscribed to the war-loans most
literally, led the panic, as now, for
thew had contribed $36, 900, 900 out of
$4,000, 900. Government taxes were,
of necessity, receivable in state curren-
cy: treasury notes or bills of exche-
duer, bearing interest, were, therefore,
issued for time, but a second bank OF
the United States became imperative.
It was created in 1916, and began busi-
ness the following year with $S35, 900, 900
capital, one-ffth government subscrip-
ton. as before. This bank, by import
ing S7.OOO,OOO of specie, lifted the
state banks to their feet, and resump-
ton was general throughout the Union.
THE MIDDLE PERIOD,
with the exception of commercial diff
culties in 1919, everything went on
smoothly until 1882, when a re-charter
of the United States bank was vetoed by
congress followed by the removal of the
government deposits (more than 81 ZOO
OOO) in 1888. The charter ran out IN
1886 but new charter was obtained
bv device from the state of Pennsyl-
yania. At that date there were about
six hundred banks in the country, with
$3.50, 600, 900 capital, q circulation OF
S1O3. 100000 and $45, 100000 specie.
One hundred and sixty-fve banks had
| failed in all between 1911 and 1880. The
| facility of our system of banking had
| its advocates in England, among them
Lord Althrop but the joint-stock banks
of that kingdom being of unlimited liza
bility, and covered by the private prop.
erty of every shareholder, were perferred
by parliament. It was not until 1856
| that the English jOint-stock company
was ''limited in individual liability
and even now director or official of any
4" limited" company engaged IN banking
| insurance, etc, VINO publishes traudlen'
accounts or false advertisements, is liza
BILE criminally and for damages. There
| moval of deposits led to their transfer tc
| certain selected banks as repositories
The " specie circular of Genl jackson
being rescinded by congress, all kinds
| of bank-notes became receivable for the
| public dues and lands, making vas
| surplus of paper truck, which for saft
| keeping was distributed among tht
| states.
| THE SUSPENSION OF 1887.
May 10, 1887, specie payments wer'
suspended over the country generally
and New York city was garrisoned will
| militia. Shinplasters, tokens and de
preciated bills of exchange were nov
the currency; the government wa
threatened with treasury deficit, ant
Van Buren, had to call congress in ses
sion five days after the suspension. Ill
| opposed the re-charter of natlona
bank, and recommended a. perpetua
| dissolution of the connection betweel
the federal government and any banl
of issue, even as a depOsitor. CaleI
Cushing led off against the message
Clay, Webster, Bayard, Quincy Adams
Fillmore, Dick Biddle, Wise, etc.. FOL
lowed. Van Buren, was defended b.
Silas Wright, Calhoun, Buchanan
Benton, Bob Walker, etc. The presl
dent prevailed. Treasury notes wer
issued toprovide for deficiency. CaleI
Gushing, that young, or old, lawyer
Babylon, touched the issue of the da,
thus on the retention of an lnstallmen
| of money due rotten states
"The American government, SAL
Caleb, ''isnOt to exert itselffOr the relle
of the American people Very well
If this be your policy, ], as representa-
the people; will not exert myself for tn
relief of your administration.
Benton says this was "chlcanery.
THE INDEPENDENT TREASURY.
| In January 1888, the treasury wa
bankrupt but this stopped the distri
button of surplus to the states, led t
bank-resumption, and foundered tn
Independent Treasury. Biddle's 'Penn
sylvania legislature bank of the Unite
States" meantime made use of its dea
circulation as assets, and claimed nearl
$40. .OOO, 900 circulation which conduc
congress stopped by severe enactment
The banks of New York resumed Ma
10, 1888. August II, following, all tn
banks resumed, including Biddle's bank
which kept it's stock meantime up to
psemium of $12 per share. October
Biddle's bank followed him into retire
ment, carrying with it nearly all tn
banks of nearly half the union: Yet, a
late as January, 1910, this chimera re
turned its assets at S74, 900, 900, and it
liabilities at only 100000. 1t sol
ficticious bills in Europe, and thus ra
more honest banks hard for specie, an
professed to be solvent long after 1t re
nooIed the Tndipendent Treasury bill