The old Abe eagle. (White Oaks, Lincoln County, N.M.) 189?-189?, 1894-05-24
SHORT CHAPTERS ON MONEY,

III
This chapter will deal with the paper
circulation up to the adoption Of the
present National banking system.
III the Colonial days and during the
period OF the Federation, from the be.
ginning OF the Revolution to the adop-
ton Of the Constitution, the paper
money Of the country had been issued
by the colonies, each acting in the ca
pacity OF a sovereign or independent
State. 1t is not within the scope of these
PARTICLES to discuss this form OF crculat-
ing medium further than to say that it
was extremely unsatisfactory generally,
and almost worthless at time when
money was most needed,
During the years of the Federation,
however, and after the colonies had es
tablished their freedom from the Mother
Country, there began to appear some
thing like system in the financial aspect
Of the business Of the new nation; and
,anized as private corporation in Phil
ldelphia, was granted perpetual char
er by the Federal Congress December
81, 17SD. 1t afterward received char
ters from Massachusetts and New York
This bank still exists. The two states
named also chartered banks within their
lwn limits soon afterward. In 1890 there
we're four State banks in the country.
When the new Constitution went into
effect (l7s9) the States, as such, were
prohibited from issuing paper money or
making anything but gold and silver a
legal tender; aud these were to be coined
| by the United States. or ii foreign coins
their values in American money were to
be fixed by Congressional legislation, as
noted in the preceding chapter.
In 1871 the United States Bank was
chartered for the period Of 20 years by
the First Congress.
The establishment of this bank greatly
stimulated State banking; and b. 1900
the number OF State banks had grown
from four to 29, and by 1911, the date OF
expiration OF the charter OF the United
States Bank, to more than three times
he latter number. These institutions
we're scattered over the new as we'll af
.he older States, east south and west
They we're unfriendly to the bank pat
ronized by tho Government, and its char
ter was not renewed. (rhe Government
at this time, and until long aiterward
had no depository of its own for its fund
as it now has). So for five years the bank
was without a charter.
But during this period occurred the
war OF 1917, which brought disaster 10 a
very large proportion OF the State banks
aud carried down many hard earned
fortunes with them in their collapse,
bringing great hardships to the busi
ness community.
The charters OF these banks provided
that their issues should be redeemed In
coin-but did not provide the means foI
keeping the coin in their vaults where
with 10 redeem them. Aud as the coun
try was daring all this time rapidly dc
veloping and speculation was the order
everywhere, the banks generally had thu
money that should have been reserved
10 redeem their notes loaned out on 40
ourities that deprecated when the pincl
came, or could mol be realized on. 80
that failure was inevitable.
The distress occasioned by these fail
ures led to the granting VI another
United States Bank charter for a like
period of 20 ysars Qsl6). Tho capita
stock was hred at thirty.hve millions o
: dollars. u which the Government helt
one fii,h. The Government funds wer
= kept by this bank and its notes wer'
mado legal tender. II was empowere'
|, 10 establish branches In certain cities.
=. But the old hostility TO the bank gre'
up again, and was championed by Pres