The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1893-02-12
SINEWS OF WAR.
How the Banks Helped
the Treasury.
MILLIONS WERE NEEDED.
Secretary Chase's Conference With
wam-strea Magnates-Basis of
CUR Banking System.

Thursday last in furnishing the United
States Government with 100000 in gold
to save the national treasury from the pos
sble dire consequences of cutting into its
500. coo reserve recalls another men,
orable occasion when the bankers of the
great metropolis came TO the rescue of the
country.
1t was upon no less critical emergency
than that of the breaking out Of the War OF
the Rebellion. when no man could f0resee
the fate OF the great republic for even an
hour ahead, and when patriotic men trem-
bled with apprehension lest the dissolution
of the Union was at hand.
Ex-Governor Chase of Ohio had been
called by Abraham Lincoln into his Cabi-
net as Secretary of the Treasury. He was
the originator of the greenback note and
died while serving his country as Chief
Justice of the United States Supreme
Court.
Looking back to those eventful days the
loan OF a couple of million dollars in gold
by the Wall-street bankers of 1898 seems TO
be a small matter cOntrasted with the gen.
erOus action of the same class of men in
1861. The condition of the country in re-
spect to wealth and population was very
different at the two periods. The political
horizon WAS then 0bScured by dark and por-
tentous clouds. To-day the skies every
where are bright. Then the total amount
of specie in the United States was less than
two hundred and seventy-lye millions.
To-day it is estimated the amount is over
six hundred millions. And yet in 1861
the New York bankers met one morning
and subscribed S50.000.00 in gold coin,
which they turned over 20 Salmon =. Chase
as a pledge that a government Of the peo-
pie by the people and for the people should
not perish from the earth.
M nd tAffo ~ han
which nothing so superbly illustrates the
spirit OF those days. 1t was, however, but
tie beginning of a tremendous OutpOurng
of both blood and treasure. Those fifty
millions were sorely needed by an
almost bankrupt Government face to
face with the most costly war of
modern times. We are stirred to day
in tile era of Asst :, Vanderbilts, Gouds
and RCckefellers and countless minor
multi-millionaires by the tender Of two
millions in gold TO a Secretary of the Treas
ury with hundred millions In his eX-
cheouer. What shall be said of the men
of the Wall street of 1851, who passed over
fifty millions to a Secretary If the Treasury
whose excheQuer was an aching voidP
/ have lived 20 hear these men since de-
Gounced and stigmatiZed in newspapers
and on the stump as "bloated bond
imbursed
A brief review Of the negotiations carried
forward so successfully by Secretary Chase
may be OF historic interest in view of the
present financial strait in which the Gov
eminent finds Itself involved.
Representatives from the banking instI-
tutiOns of New York, PHILADELPHIA and
Boston met MI Chase for consultation In
New York and. after full conference, agreed
TO unite as associates in mOneyed support
to the Government aud TO subscribe
Of which 100000 was to be paid
mmediately and the residue, also in coin, as
needed for disbursement Secretary Chase.
on his part, agree to issue thTee-yeaT 7-30
bonds or treasury notes, bearing even date
with the subscriptions and of equal amount;
10 cause books Of subscription 10 the ma
tiOnal loan 10 be Immediately opened; 10
reimburse the advances Of the banks as far
as practicable from the national subscrip-
ton; and TO deliver TO them $50 bonds or
treasury notes for the amount not thus re-
imbuTsed.
1t was further understood that the Score
tarY Of the Treasury should issue a limited
amount of United States notes, payable on
demand. in aid of the operations OF the
treasury, and that the associated institu-
tons, when the frst advance of fifty mil
lions should be expended, would, ii practi-
cable. make another, and when that should
be exhausted. still another advance TO the
Government OF the same amount and on
similar terms.
When President Lincoln was Informed of
relieved and declared that he entertained
no fear that there would be any lack of
funds to carry on the war for the malnte-
nance OF the Union.
The objects of the arran cement were:
First, 70 place at the command of the Gov
eminent the large sums Immediately needed
for the payment of maturing treasury notes,
aud for other disbursements, ordinary and
extraordinary; second. TO secure to
the people equal opportunity with
the banks FOR participation In the loan
third, TO avoid competition between the
Government and the associated Institutions
in the disposal Of bonds; fourth, to facili-
tate and secure further advances 10 the Gov
eminent by the associates. II required; and
fifth, to insure, II possible, the maintenance
OF payments in specie. or It's actual equiva-
Tents and representatives.
All these objects, except the fifth, were
happily accomplished. Fifty millions was
Immediately advanced by the banks. Secre-
taTy Chase caused books Of subscription 20
be opened throughout the country. and the
people subscribed freely to the loan.
The amounts thus subscribed were re-
imbursed to the banks. and the sum reim-
burSed, though then covering but little
more than half the amount. enabled those
institutions, when a second loan was re-
0uiTed to make a second advance Of S5O,-
100000 Subsequently. and in the same
year, third loan Of one hundred millions
was negotiated by agreeing to issue TO the
associated banks fifty millions Of dollars in
per cent bonds. at a rate equivalent 10 par
for the bonds bearing per cent interest.
This negotiation, though less advantage
Gus TO the Government. considered under
the light Of a simple money transaction,
than the first two loans, was in some re-
spects at least, more so. II was coupled
with no arrangement for reimbursement,
and entailed no immediate expense TO the
treasury, beyond that of preparing and is
suing the bonds. 1t was coupled also with
an understanding. in the form OF an option
to the associates, that a fourth advance of
fifty millions should be made on the same
terms as the first and second, If practicable.
and required by the Secretary of the
Treasury.
have mentioned only the facts relating
to the first loans. Others of greater magni-
tude followed as the needs OF the Govern
meut expanded with the stupendOus char
acter OF the struggle for existence.
While The action of the banking institu-
tinns Of 1861 in assuming the immediate
responsibility OF the whole advances first
required as we'll as the final responsibility
Of much the largest portion of them, calls
for the highest euiogism, the prompt
patriotism with which citizens of moderate
means and workingmen and working
women brought their individual offerings to
the service of their country will never be
forgotten. HENRY q. SHAW.