The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1895-11-01
OUR BANKING SYSTEn.
Some of Its Beneficial Effects Clearly
Pointed Out,

Some of Its Beneficial Effects Clearly
Pointed Out.
Following is the paper by j. &.
Wise Jr. opening the discussion on
Banking System and Laws" before
the Social Science club Tuesday eve
ming, the first paper having been pub
lished yesterday:
Ii my friend, who SO ably opened
this discussion, is justified in saying
that he approached it with trepida-
ton, | certainly, so much his junior
in years, practical business expert
ence and information, am more than
justified in the fear OF my ability to
interest, instruct or amuse. We're
our mission merely to give an cpl
tome OF the several enactments per-
tanning to our national and state
banking systems, Mr.. Currier has
pretty well covered the field, but as a
liberal license is allowable in the dis
cussiOn OF topics before this society,
SO l may be able to occupy your
time for short period, even if | do
not contribute to your information.
The banking system OF the United
States, to which l assume the title Of
our discussion refers, was the out
growth of the late civil war, was
devised and recommended to congress
largely by the late S. 2. Chase, Sec
rotary OF the Treasury, under Mr..
Lincoln, and it's purpose was two
fOld-tO create sure market for the
sale OF government bonds; and to
provide a safe, uniform and convent
ent monetary system for the conduct
a do hA
people.
Whatever preiudices may prevail
against banks and bankers-and the
objections urged are largely the out
growth OF prejudice-the conception
was OppOrtune, wisely directed, and
has contributed greatly to the mar
Vicious growth and development OF
the great business interests of the
country. 1t has given to the people
what this country never SO fully en-
jOyed before, seize, uniform currency,
good in all parts of the Union. ten
dered and received in the course OF
business transactions without the
need of scrutiny or inspection, and
whether paid out again or hOrded,
always sure and certain OF the full
value that it's it's face affirms. | de-
sire here to emphasize the fact that in
the thirty years of their eXistance
with its immense circulation, not a
single dollar has been passed or re-
deemed at a depreciation of it's face
value.
Prior to the establishment of this
system, which was first authorized
by Congress in an act approved by
Mr.. Lincoln, February 18th, 1868, and
revised and re-enacted June I'd vi the
following year, State Banks Oflssue
universally prevailed, there being In
the then 81 states about l,6O1 state
banks with an aggregate capital OF
nearly five million dollars. 1t is said
that more than ten thousand differ
eht kinds OF bank notes were in use,
aggregating more than two hundred
million dollars, each issue separate
and distinct MS to it's responsibility
and value. Wisconsin, Michigan
and Northwestern bank notes gener-
ally had little value outside their
respective state limits, and even at
home their position In public conf
dence depended largely upon the
bonds pledged for their redemption,
and the personal character and IT,
SpOnsibility OF the prOprletOrs. In
some of the western states any mark
etable state bonds were receivable to
secure circulation, many banks had
pledged Southern bonds, and amid
the slavery discussion, accompanied
by threats OF secession for few years
before actual hOstilities, their value
was seriously impaired; and when the
war broke out, totally destroyed.
Referring to files OF our local papers
published just before the war, stand
ing warnings were printed, in con-
junction with the market reports, for
farmers not to take Wisconsin
money, or that OF some other state, or
particular bank, in exchangefO their
produce. There was some gold and
subsidiary silver in circulation, and
possibly more in Minnesota, proper
tionately, than in any of the Western
States, because OF thepayments made
by the government to Indians, al
ways in coin, which readily found
circulation among the people, but it
wasnOt an uncommon thing about
1859 and 1860, for a person going east,
TO exchange his currency, always
standing a "shave" either light or
heavy, several times, before reaching
his place of destination.
Minnesota authorized it's state
banks to base their issue upon
state bonds, few deposited those OF
accredited value, while the great
majority put up what was known as
the old railroad bonds. The state
was bountifully supplied with this
currency, but when, within the first
year of the states existence, these
securities went to protest for non.
pay ment of interest, it was in
stantly transformed to the worst
kind of worthless wild cats. Then
| followed brief era of 'shinplaster, :"
printed on thin and cheap paper,
nearly every merchant having a dis
| tinctive issue, in sums of five cents
upwards, receivable for goods or re-
deemable in amounts of five dollars.
| These answered the purposes OF
small coin, and prevailed until the
government substituted what was
known as the postal currency.
sa With this preliminary experience
he whole public welcomed the ma