The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1910-08-12
branches. but they were soon estab-
hshed at the leading commercial GEN.
ters OF the country and entered into
clearing and other relations with the

availed itself of Hamilton,s original
project to borrow freely from the
bank, and these loans proved to be
larger and for for longer time than
/ was at first expected, causing embar-
rassment to the treasury and uneasi-
ness to the bank before they were fin
ally settled. This Indebtedness
amounted within four years to &c.
10000, or nearly two-thirds of the
capital OF the bank. The loan Of 60
large a proportion of its funds Grip
pied Its services to commerce and
manufactures and made 1t difficult
even to continue the temporary loans
required to facilitate the financial
operations of the government. Ulu-
mately the loan was repaid, partly
from the proceeds of the sale of the
government holdings of bank stock.
AS these shares were sold at a pre-
MUM, IN some cases as high as forty
five per cent, the government made a
profit Of $671, 800 exclusive Of divi-
. 1ends received to the amount of ST.
72o.
r, n frst bank of the United States
did, 70 have the exclusive privilege
of not., Issue, but customs duties were
made payable in the notes of the bank
which gave them a wide circulation.
The bank, moreover, exercised salu-
tary restraint upon the other banks
by presenting their notes promptly
for redemption when received over its
counters. The passing Of the political
control of the country from the hands
Of the Federalists to those of the DEM
ocrats at the beginning of the nine
teenth century, it is declared by DIR.
Holdsworth, had no immediate effect
upon the interests or fortunes of the
bank. Though always regarded as a
federalist institution, and managed
| largely by men of Federalist leanings,
its affairs were administered in the
main with neye single to business
and profit. and it never became em-
broiled in political controversies as
did its successor, the second bank Of
the United States. Only once did the
treasury. under Democratic admins
tration, apply to the bank for aid, and
then it was as cheerfully and gener-
ously given as under earlier Federal
ist administrations.
Jefferson never gave up his anita
gonism to banks in general and to
the bank of the United States in par
ticular. He permitted Gallatin, his
secretary of the treasury, however, to
support the recharter of the bank, and
the failure of congress to authorize
it was disagreeable surprise for the
business community. The renewal Of
the charter was indefinitely postpon-
ed in the house on January "a, 1911,
by vote of 65 to 81, while in the SEN
ate the bill failed by the casting vote
Of Vice President Clinton. The bank
| liquidated it's affairs as promptly as
possible, and its buildings and large
part of Its assets were taken over by
the private bank, established by
Stephen Girard.
The Second Bank
In recounting the history of the Sec
ond bank of the United States, which
was chartered in 1916 with a capital
of $35, 100000, Prof. Dewey pursues
the plan of analysis by subjects rath-
er than narrative of events in the
order of time. He points out that
many Of the difficulties Of the bank
and of the country were caused by the
deficiency Of specie and the excessive
issues of notes by the local banks.
During the period OF expansion after
1911 and the speculative profits
which attended specie suspension and
unwise local legislation state banking
had assumed proportions which were
beyond control. II the bank Of the
United States had been organized
when commercial operations were
normal and banking methods were
sound, the bank would undoubtedly
hshed, however, after the local banks
hnI hot
operations, 1t was we'll nigh impossi-
ing with local and selfish interests.
The pressure Of the bank and the ma
tional treasury threatened to force
resumption of specie payments by the
local banks, but their resistance de-
layed resumption until the summer of
1917, after a conference in February
with representatives of the banks of
New York, Philadelphia, Baltimore,
and Richmond. The bank of the Unit
ed States itself made mistakes in
speculative loans, difficult to avoid
in an undeveloped country, and al
lowed the branches, especially in the
south and west, to extend discounts
beyond the margin of safety.
The political conflict between Presi-
NOAC C0NhoOh 0s1U Iu0 UcAAh 40 uOI Nio.
cussed in great detail by Prof. Dewey,
because Of the fullness with which
these aspects of dts career have been
discussed in political histories. He
declares, in summing up the lessons
to be drawn from the history of the
bank, that "the circumstances which
gave rise to the establishment of the
second bank were altogether different
| from thnaa which have hrOlloht about
a discussion Of the question of CEN
trail bank at the present juncture;
that the bank in It's final operations
was nothing more or less than large
commercial bank with practically the
same functions as other banks estab-
lished under state charters, and diff
ferent from them in little save size
and enjoyment of few privileges;
that the bank began its operations
during period Of commercial de-
moraldzation and developed its prac-
tice during q period Of crude banking
methods as measured by current
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