The age-herald., 1898-03-20
BY H. K. NHITE.

thorized to borrow $050 900 900 upon coupon or registered bonds and treasury notes According to the option given him in this act the secretary Issued $50, 900, 900 in treas ury notes, payable on demand in denomi- nations of not less than $10 without inter est. and made payable for salaries and other dues from the United States treasury.
 The second act which was supplementary to the act of July II, among other things, reduced the denomination of these treasury notes to not less than s each, and made them "receiveable In payment Of all public dues" February 12 1862, another actt of congress authorized the issue of $lOOOO,0OO more of these demand notes and made all the issues, s60 100000 altogether, lawful money and a full legal tender. It will be interesting to observe at this point that these $60, 900 900 of demand notes after they were made full legal tender, circulated at par with gold when gold had reached a premium of 1855 per cent over other paper issues of the government which were not receivable in payment of duties on i'm ports and fell shortt of the full power of money.
 Chase's First Report
 In his first report to congress in De- cember, 1S61 Secretary of the Treasury, Salmon P. Chase, recommended the estab- lishment of a national banking system His plan was substantially the same as that afterward adopted. His avowed pur- pose was to establish currency or unl- form value throughout the nation in place of the varying state bank currency. Judge Chase lived to express regret that he had been instrumental in creating the national bank system
 When congress received this report In Decemebr, 1861, from Secretary Chase, subcommittee, consisting of Mesrs Spald- ing. Hooper and Corning, was appointed 10 consider the secretary's recommendatlonS. They at once went to work and prepared a national bank currency bill of sixty sec- tions, one section of which provided Tor large issue of legal tender treasury notes' But the bill as prepared was not then ln- troduced MT Spalding says in his "Finan- cial History of the War" that he conculd- ed that the bank bill of sixty sections could not then be passed through both houses of congress for several months, on account of the opposition of state banks. He there fore changed the legal tender section Of the hank bill into a separate and single blll, and introduced it into the house of repre- sentatives by unanimous consent, Decem- Der 30 1861. The substance or thls plii was that the secretary of the treasury should issue on the credit of the United States slO0 900 900 of treasury notes, non-lhterese hearing, payable generally, without specl- fving any time or place of payment, ana ;n denominations of not less than $5 each and that such notes and the previous ls- s,1es of treasury notes amounting to $6O,-
  inp interest should be receivable for all debts and demands owing by the United States to individuals or corporations Wltn- in the United States; and should also De lawful money and legal tender in pay ment of all debts, public and private, with in the United States; and that such treas urv notes should be receivable the same as coin at their par value. in payment Tor any bonds which the secretary Of the | treasury was then, or might be thereafter, authorized to issue and such treasury notes might be re-issued from time to time. as the exigency of the public service might require.
 Banks Opposed It
 - The banks of New York, Boston and Philadelphia manifested immediate ana active opposition to this bill They sent a number of representatives to Washing ion and on January Il, 1862, conference was held at the office of Secretary Chase, between these bank representatives and the committee of ways and means. The banks, at this conferenc, submitted plan of rais- ing money which contained the following provisions
 1. A bill to raise $125, 900 over and above duties on imports by taxation.
 g. To isue no more demand treasury notes except those already authorized.
 3. To issue $1O0 000, 900 treasury notes pay able in two years, in sums of $5 and up- wards. to be receivable in public dues to the government, except duties on imports. 4. A suspension of the sub-treasury act so as to allow the banks to become de- postories of the government or all loans and to check on the banks from time to time as the government needed the money