The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1900-10-15

9 ullhepucepuUnt ABROAD 10 the minds OF
Some people, perhaps none is more pre-
valent than that relating to the nation
al banking SYSTEM. 1t has been vehe-
mently, charged that the national bank
act was conceived by the banks and for
the banks that II was thus inaugurated,
and that following this purpose and for
this purpose only It Is perpetuated. En-.
roneous opinion upon q subject SO i'm
1 portant as this, Is to be deprecated,
while the truth about 1t should be en-
courpged and disseminated.
Origin Of the National Banking
{ System.
In order to: understand the matter at
tall, 1t is necessary tolook back to the
timeEwhen the national bank act was
adopted by Congress and became law.
As early as December, 1861, Salmon P.
Chase, secretary Of the treasury, pro-
posed a series Of measures which re.
ceiyed little favor from Congress until
the month Of February, 1863. BY that
time, owing to the enormous expendi-
lures incident to the civil war, the
finances Of the government were in a
i dangerous situation. For the suppress
sion OF the rebellion, extraordinary ex-
pendltures to the, amount Of nearly So
900 900 day were an absolute necessity.
i The power Of taxation could not be ex-
tended SO as to take from the people the
NECESSARY means to provide for this
enormous outgo. The resources Of the
future were OF necessity anticipated.
Borrowing was resorted to-horrowing
by every device known to official in
genuity. Government bonds bearing 6
: per cent interest were authorized by
law, and sold as rapidly as purchasers
for. them could be found; but this re-
source did not bring IN. money enough.
The government issued it; own notes OF
hand. paying them out for supplies.
These were followed By Issue; OF green
backs, the purchasing power CT which
rapidly fell, SO that in February. 1868.
the POWER Of the grcenhack to purcha5e
I commodities, compared with coin, had
fallen TO sixty-two cents on the dollar,
Tasre were then outstanding OF these
obligations over 1881. coo, co.,. Tie g Ter
cent lntercst-bcaring bonds of the gov
ernment were selling at less than, par in
greanhacks. which made their real value
about sixty cents on the dollar. 1t was
this situation that forced upon the mind
II the secretary of the treasury the, nee
tssity for finding an enlarged market
for the increasing debt OF the govern
nsea.. and the national bank acr WIS
passed.
The fundamental idea OF the act was
4 to compel the banks of the United
States to. become, buyers of government
bonds, When the act was passed, banks
were in existence In every state in the
Union. operating their functions under
state laws, and enjoying the privilege OF
issuing their notes to circulate as
money, subject to various restrictions
according to the legislative ideas of the
various states where they were located.
Secretary Chase conceived the Idea Of
wiping out the whole. system OF cilcu-
lating notes. and OF substituting. for It :
uniform system of bank.note circula-
ton, based upon United States boads as
security. The national banking act
gave to an association under 1t the right
to issue Its circulating notes. condition.
ed rinon SIrh orsnciot,ons b,,,,,r Sr-,
deposited with the treasurer OF the
United States, an amount of United
States bonds 10 per cent In excess OF the
amount Of notes authorized. 1t also
had the mandatory requirement. that
every association organized under the
act should deposit Il certain proportion
Of Its, capital with the treasurer Of the
United States in the form OF United
States bonds. whether the association
took out circulation or not.
Supplementary thereto, a prohlbitive
tax OF ten per cent per annum was i'm
Z posed upon the Issues OF all banks except
those Of national banking associations.
Th!srprohibitive tax operated to eStIn-
grish. In short period of time, 10000
900 OF bank notes then In circulation
among the people. the issues of banks
organized under state laws.
1t ought to be remembered that this
4 act was never asked for by the banking
interest itself: In fact. It was bitterly
4 opposed as being an arbitrary and I'M
Just exercise OF power by the federal
government, In striking down, by n tax,
{ chartered privileges derived from the
power OF the states. So strenuous was
this feeling that the bill would have
failed in the senate except for the cner-
getlc5 appeals OF Secretary Chase, who
Represented to opposing senators thai Its
passage was necessary to carry on the
war. ASH was. tho change of one vote
from the affirmative to the negative
would have produced a til and the. bill
wotiid thcu have failed
Forcing Market for Government
bonds.
In Its general influence upon tho gov
erirncnt credit the &c: seemed to iuSti-
fy the hopes and expectations OF secre-
tnry Chase. While the per cent bonds
OF the government werr selling. when
the act was passed, n, discount OF 2
or a,t per cent upon their face value. be-
fore tho close OF tho year they had i'd
Z vapcei 10 premium or AZ 10 per
cent. and during the following year,
1861. they ross 10 los TO 10