Pine Bluff daily graphic. (Pine Bluff, Ark.) 1893-1942, 1908-02-23
NEW MONEY MILESTONE
MARKS NATIONS GROWTH
Congress Will Set the Seventh That the Development
Of the United States Has Required - Country's
Bonds Now $3.50, 184, oo0-The West Absorbs
Enormous Issues and Is Rapidly 0vertaking the
East According to N. W. Harris in His Report to
Sneaker Cannon-Com ments of Western Bankers

the government had to depend upon
the State banks. This was a period
of trouble and disorder, brought
about largely by war Of 1919.
Banks suspended specie payments,
except in New England, and bust
ness was disorganized until as a way
out Of the difficulties the second
bank of the United States was es-
tablished In 1916, marking the sec
ond milestone in the country's fnan-
cIal history.
jackson Smashed Milestone No. g.
This bank was run on similar
lines to its predecessor and while
it began It's existence under q cloud
It was soon. put on its feet by the
executive genius Of Langdon Cheves,
of South Carolina and brought Or
der and prosperity out OF the tang
red financial, situation, The respite
granted the country In, this way last
ed until 1929 when President Jack
sou made his famous attack upon
the bank and plunged the country
into a bitter political contest which
only ended with the defeat of Henry
Clay for the presidency In 1882 and
the expiration Of the banks charetr
in 1886.
This may be called the third mile
gtoe, though In a way it marked ret
repression rather than progress.
After several attempts at contract
i've legislation the so-called "inde-
pendent treasury system" was estab-
liehed. by which the government
made its collections and disburse-
ments in specie only and kept It's
funds in the custody Of its own Off
GERS. This left the country depend
ent on the state banks for bank ing
facilities and led to the development
OF the business a'ong many new
lines, some Of them hazardous, and
paved the way for the fourth great
change, in the establishment of the
national bank system in 1863.
Reasons for Present System.
Like all Of the great changes be-
fore 1t was an Emergency measure,
calculated not to establish an deal
system but to meet a critical situa-
ton. The government was faced
with the necessity of finding a new
market for the enormous bond issues
Of the civil war and at the same
tine of establishing a solid currency
as opposed to the food of depreci-
ated legal-tender paper which seem
ed to threaten. The national banks in
corporated under the new law were
granted the privilege which they
now possess of issuing notes secured
by deposits Of government bonds.
and the notes Of state banks were
taxed out of existence.
Snce that time the turning points
of Importance have been the Sher-
man bill Of 1873. the Free Silver
agitation Ut 1896 and the amend
ment of the National Bank Law in
1900 reducing the minimum requir-
ed capitalizat on of national banks
from 100000 to $4,000.
The Aldrich bill, If passed by
Congress. will not cause any such
radical readjustment Of the none
tary system as did the other great
changes just reviewed; for example,
the creation OF the national banks
or the founding of the United States
bank. On the other hand It is aim
ed, as an emergency measure, to put
| an end forever to any possible re-
currence Of such a financial panic
as the country has just weathered,
due to the impossibility of scoring
enough currency to meet a sudden
demand. The attitude of both
houses toward this proposition IS
epitomized in the fol owing unpub-
lished statement Of one of the lead
ers of Congress
"That biz is not intended to yield
! a profit t. tho banks, but IS intend
ed to render = unnecessary 70 even
take the currency ont. may go