Butler citizen. [volume] (Butler, Pa.) 1877-1922, 1893-12-01
u nited States Banks.
OR. G. Horr IN New York Tribune }

tinental paper money" In June, No.
81, 600 600 of such money was put IN eireu'
lation. This amount was increased from
month to month and year to year during
the war of the American Revolution until
$500, ,000, 900 had been issued.
1t is difficult for us to conceive what ar
immense sum that was for a young and
struggling nation of less than 1900, 00t
people. A depreciation of these issues tool
place in spite of the law which made them
legal-tender in payment of debts. II
continued until they became absolutely
worthless None of them have ever beer
redeemed. The loss of this enormous sun
fell upon the individuals in the United
States who happened to hold the bills
when they ceased to circulate. The com
mon expression "Not worth Continental
had its origin at that time. The Cont
mental money had behind it the same ''fiat
of the Government that our "greenbacks'
have to-day. What made that money
worthless was the failure of the Govern
ment to redeem it when presented for pay
ment-
In the spring of 1850 banking associa
ton was formed in the city of Philadelphi,
without any charter, and was the starting
point for National bank. On May IL
1881, Robert Morris, who was then Super
intendent of Finance for our young Repub
lie, presented to Congress plan for organ
izing the Bank OF North America at Phila
delphia with capital stock of 100000.
On May &c Congress passed a resolution
approving the plan. In the December
following Congress passed an ordinance to
/ incorporate the subscribers to the "Banl
OF North America" April IS, 1882, the
State of Pennsylvania granted charter to
the same bank. Thus the association first
formed became an organized, incorporated
and chartered bank.
The Bank of North America" com
menced business in January, 1852, the
| Government having subscribed for $254,
900 of its stock 1t is still doing business
to-day. That bank has always done gem
eral banking business, but the Govern
ment sold its stock at an early day. and
the bank has never been known or desig.
mated as "Bank of the United States.
Its last charter was granted in 1854. 1t
| was afterwards changed into National
bank, and is now prosperous institution,
with capital of 81, 900, 900 and a surplus
of more than that amount.
On February z, 1884, the State of Mas
sacnusetts incorporated the Bank of Mas
sachusetts, located at Boston.
March 81, 1871, the State of New York
chartered the Bank of New York, located
in the city of New York. This institution
had been doing business for Some time
previous as an association, under articles
drawn by Alexander Hamilton, who was
one of its first directors.
Both of the institutions above named are
still in existance, and doing profitable
business as National banks.
The first "Bank of the United States
was proposed by Alexander Hamilton in
1870 in his report as Secretary. The meas-
ure received vigorous opposition, but it
passed the Senate January 20, 179l, and
the House in February, 1791. The capi-
tai stock of that bank was fixed at $l0,-
0OO, 600, divided into 25, 900 shares of $4O0
each. The subscriptions, except those OF
the United States, were made payable, one
fourth in coin and three fourths in 6 per
cent United States bonds. The bank vas
prohibited by its charter from loaning to
the United States sum greater than
800, 900, and to any State more than $780,
900. 1t was forbidden to loan to any for
eign prince or State any money whatever,
except after the passage of a special law
1t had power to issue bank notes, and all
bills of the bank were made payable in
coin and were to be received in psym ent
OF all dues to the United States. The
Government was authorized to subscribe
for 80, ,O00, 900 of its stock. The charter
was to continue to 1911, and the Govern
ment was to establish no other banks dur
ing the existan ce of this one.
The bank was located in the city of
Philadelphia, did gen eral banking busi-
twenty-five directors elected by the stock
holders, The dividends of the bank we've
regularly from 8 to 10 per cent each year.
Congress refused to renew the charter
at the time of it's expiration, and the bank
was compelled to wind up its affairs. Its
depositors were paid in full; its stockhold-
ers were also paid in full, and received q
premium of 81 per cent on the final settle
ment. The Government had previously
sold its stock at large premium.
After the war Of 1872 Alexander j. Dal
las, who was Secretary of the Treasury in
1914 recommended, in an able report, the
establishment OF another "Bank of the
United States" In January, 1915, bill
was passed for that purpose, but was Veto
ed by President Madison.
On April 3, 1916, another bill was passed
and was then signed by the President. 1t
incorporated an institution under this title:
''The President, Directors and Company Of
the Bank of the United States" The cap
ital stock of this second Bank of the Uni
ted States was fixed at $35, 600, 900, divid-
ed into $50, 900 shares of 800 each, ST.
600, 900 of this stock to be subscribed by
the United States. The remaining $26,
600 600 was to be subscribed by individuals,
companies or corporations. Its charter
was to run until March 3, 1886 AT the ex-
piraton of its charter Congress refused to
renew it; but charter was granted by the
State of Pennsylvania, giving the bank
power to do business in that State. 1t
should be mentioned that the Government
had sold it's stock and the books of the
Treasury Department show profit to the
Government by the transaction of So, $780,,
l67, On October 9, 1889, this bank s1s-
pended specie payments, as did most OF the
other banks of the country. 1t was in a
little while compelled to wind up its bust
ness, and did SO at great loss. 1t paid its
depositors and bills issued in full, but its
stockholders never received anything.
They lost every dollar they had invested in
the enterprise.
No other "Bank of the United States
has been organized since the failure of the
second one Of that name in 1889. That
bank did general banking business
and was managed by board OF directors
elected by its stockholders, precisely the
same as are all other banking institutions
1t issued bills and redeemed them in coin
on presentation
The first bank of the United States grew
out of the War of the Revolution;the second
one grew out of the War Of 1872; and the
present National banks of the United
States grew out of the necessities of the
w ar of the Rebellion.
During the late Civil War the National
Government was again compelled To resort
to the issue of Treasury notes and paper
money which are known as "greenbacks."
Suct paper money was issued TO meet the
extreme necessities of the Government;
and durng the war an amount appfoximat-
ing $500, 600, 900 was issued and was in
circulation at one time. The entire Ma
4 II.