The Cincinnati daily star. [volume] ([Cincinnati, Ohio]) 1875-1880, 1876-07-24
Our National Bank system.

A higAly7 esteemed correspondent,
writing nom InIiiana on behalf of him,
self ana others, requests us to A"eXplain
through ourIcolumns the system OF the
National Banking business" HI
Inasmaeh as thirteen years have
elapsed since our National Bank sys-
tenn was instituted it may not be aniiSs
10 givefa synopsis of its features and the
requirements OF the law governing its
business procedure; the more SO as
considerable discussion is going Oh
among the people concerning the contin-
uanee Of the, system as part OF our sys-
tenn of national finance. a..e
Atthe outbreak of the late civil war
the country had no banking institutions
of national character. AL the banks
of, issue then in existence we've, organ
lied under State legislation, either by
special charters on general laws. Upon
the outbreak Of the war all those Stats
banking institutions suspended specie
try at once fell into confusion. The cur
rency Of one state was not current in
other States. On this account the Ma
tional Government was compelled to
supply currency that should meet the
public exigency, and enable it to carry
on the waf. -.....
But il was not till 1858, two years
after the war commenced, that the plan
now known as the NATIONAL Bank Sys-
lem was devised. Mir. Chase was then
Secretary of the Treasuary; and 1t was
chiefly through his instrumsntality,
aided by consultation with the most
experienced iinanciers OF the country,
that this system was inaugurated as a
means Of giving a uniform currency to
the Nation. In that year the first Ma
tional Bank Act was passed by Con
gress. Prior to this time the States oi
OHIO and New onk had organized bank
ing institutions under general laws,
famiIiarly known as the State Bank Sys-
ten; and which had been in operation in
those two States then for about twenty
years. The successful operation of the
banking systems of the two States dur
ing so Tonga period OF time naturally
attracted the favorable attention of the
Treasury Department and tinanciers
generally TO the consideration of their
principles, which were indeed almost
Identical In those States. The result OF
this was that the general principles
upon which those State Banks were
founded were adopted as the basis for
the National Banking system. The lat
ter system was, in fact, but little more
Than an amplfication Of those State sys.
tens, so as TO apply to all the States a
currency system which before had been
merely local, and thereby give uniform
currency to the whole country.
The first Act, OF February, 1888, estab
fishing the National Banking system
having beeniouHd faulty in some details
was repealed by the Act Of June 3, 1864
which latter act with some amendments
IS the one now governing the National
banks.
Under that law separate Bureau i,
established in the Treasury Department
charged with the execution of all thu
laws resi- peeling the n atiODal bank cur
rency, and the. chief Of this Bureau i.
el!led the Comptroller of the Currency
;rd his term of Office is for five yeas
The law provides that tuis officer shall
not in any manner be interested in AM
bank or association issuing nationa
curreney.
Associations for carrying ON the busl
ness OF banking, now commonly know
rs National banks, may be, formed b.
any DambeY of persons, not less thai
five. under articles Of association, set
Ling, forth the name, place OK business
amount Of capital stock and number o
shares, names of all shareholders Will
their residence and number of sharel
held, with any other appropriate pro
visions. These articles. are to be tiiet
with the Comptroller Of the currenc,
and recOrGed. BY approval Of the Sec
setaTy Of the Treasury. banks Of not les
than $so,ee0 eapissl may be organized il
any place with population not exceed
ing six. theusaad. In a city Of fifty thou
saBa aud over the capital can not be lesi
than $2eO,eUe. Such association has
power to elect its own officers, and to d,
general banking business as in ease o
any etkeF corporation for banking pur
poses. There mnst be not less than fiv,
Directors, and all to be citizens of tni
United states and for one year citizen
lofthe State, and must each own not les
tbaR ten.shares OF the capital stock.
Before being authorized to commsnci
business at least ffty per cent. of tn
capital stock must be paid in; and th'
remainder mast all be paid up withil
ave moptbs. Upon all prelirntnaFies be
Ing complied with, the Cemptsoiier is
snes authority 10 osmmsnne business a
bank undsrtho law But so''ee sh'