Grant County herald. [volume] (Lancaster, Wis.) 1850-1968, 1877-06-21

NEW hampshire ala TINS entirely.
New York, Pennsylvania, New Jersey
Maryland, and Virginia did so in part
This issue, however, went on, and il
January, l777, the depreciation com
menced.
Every possible means were resortec
to by public officers and private com
mittees to enforce the legal tender
character of the bill, but with indif-
ferent success. In 1870 the issue was
$16o,000,000. At this time the notes
were twenty-eight to one; and in 17SC
they were worth only two cents on tbs
dollar.
In 1881, when Morris took charge
of the finances, the notes were re-
garded as utterly worthless, and YET
some eventually were redeemed al
one hundred to one, in Hamilton's
funding scheme.
This was third attempt at sub.
stitute for coin, and much greater
calamity than either that had proceed
ed it. To enhance tho sufferings arts
ing from general suspension of bust.
ness, throwing thousands of men out
of employment, there was an almost
total failure of crops in 1879 and 1880
In 1880, several wealthy men OF
Philadelphia, entering into specific
arrangement, took Government bills
of exchange, and issued their own
notes to purchase supplies for the
army. December 81, 1881, this com.
pany was incorporated by Congress
as the Bank OF North America The
validity of this act being questioned,
a charter was obtained from Pennsyl
vania, in 1888, for ten years, with a
monopoly. In 1885 the State charter
was repealed, but in 1887 renewed
without the monopoly.
This enterprise being apparently
successful, other States adopted q
similar method. Massachusetts Bank
was chartered in 1884; Then, imme-
diately one in New York ,ana another
in Maryland. These temporarily re-
lieved The pressing need Of the coun.
try, and business began to revive
The industrial interests assumed a
more healthfnl appearance, and this
would have continued uninterrupted
had the currency been has ed upon q
coin valuation.
In 1887 the Federal Constitution
was framed and contained this clause;
''no Stqte shall coin money, emit bills
of credit, or make anything but gold
or silver coin a tender in pay
ment of debts Thus did the wise
men of that day express their com.
domination of the paper system oil
money, and the people, grooming I'm.
der recent experience, aequiesced.
The finances OF that period, how
eyer, were in a deplorable condition.
There was enough currency, but it
had an uucertain value. The Con-
federation was little more than =
shadow. 1t could not collect rev.
enue or adjust its accounts. These
were in inextricable confusion, with
no one on whom to charge the re-
sponsibility.
September 2, 1899, the Treasury
Department was established, with
Alexander Hamilton as Secretary.
His Report of the national debt, Jau-
uary II, 1890, was $42, 100000 do
nestle; $l1,ooS,0Oo foreign; States,
S25, 100000.
With this formidable array of fig
ures, and no coin sufficient for needed
purposes, Hamilton p, posed a Ma.
tional Bank. There being no other
alternative, this was incorporated by
act of march 3, 1901, with capital Of
$40. 100000 - $4,000 900 subscribed
by individuals (one-fourth in specie,
three. quarters in United States stock
and 100000 by the Government.
The charter was FOR twenty years, land
no notes below SO were to be issued
Soon after the Government sold its
interest at 90, 25, and 40 per cent.
premium. This was a wonderful in,
centiye, and speculation ran high.
From 1892 to 1912 one hundred and
three banks were chartered, and ex'
pansion began.
In Massachusetts this took the form
of "Wild Cat" The new financial
machine was powerful, in fine condi-
ton, and worked to its utmost capaci,
ty. The stock of specie insignificant
but this did not check the issues. The
precious metal was indeed scarce and
the little that could be collected I'M
der a combination of bankers was
stealthily moved from bank to bank
just in advance Of the inspector.
A crisis under these circumstances
was inevitable. 1t came in 1909.
Some of the banks are reported as
having $50 to $40 in specie, with cir
culation of notes ranging from $780,
600 to$500, 600 Not few of the banks
had not dollar in specie, and none
of them had any very considerable
amount.
The Farmers Exchange Bank OF
Gloucester, Rhode Island, chartered
in 1904, was a fair representation oil
the class, as operated at that time, land
we give citation of facts relative to
this from which to reach proper
understanding of the others.
It's capital stock was put down on
the record at 100000. Only So,
al. however, were ever paid in, and
of .his the directors drew out until
there was working capital of only
s3,0S1. One Dexter, so we arc told
bought up eleven of the directors al
1900 apiece, paying from the bank
finds He then borrowed of the
bank S760, 265. This was sharp
trick of a stock gambler, and threw
the concern into bankruptcy. When
it failed it had 5000 in specie, with
an outstanding circulation of not less
than $3.50, 900.
Similar facts were developed al
over the country, and the distress was
universal. A few individuals, per
haps, had made vast fortunes, but the
great mass OF people were thrown in
to financial crash from which it took
years of patient toll to extricate them
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