New-York tribune., 1910-08-13
CENTRAL BANKS ANALYHD
First and Second National In
stjtutions Described.

,,--s,inr-tou. Aug l2.-TEe difference be-
.--.e,, the character and status of the First
- second banks Of the United States. IN
--r,-s+e6 early In the country's history,
- IA. rcrCention Of central bank as de-
,..,o-,az ,lnGer modern conditions in Eu-
-. !. brought out In a foTcible manner
8 vcI,lrr1e ,ust made public by the Ma
.t,,a; Monetary Commission. The volume
...-ssets Of two parts-a study Of the First
po-l, of the United States, by Dr. John
-~r,-, F5oldsworth. of the University OF
I,,4+s,,,1re- and a study Of the Second Bank
- -bA United states, by DR.. Davis X
1ar-ev. Of the Massa chnsetts Institute OF
Technology
--7-a ESSAY cf Dr. EoI6swo-th rccounts
.ta 7Ia1 OF Hamilton 20 found a bank for
.bs ,lf-pose Of aiding the government.
rhic,l became lsw IN T7si- Il is declared
- Hamilton that a national bank was not
- mere matter Of private property, but a
roliticai machine Of the greatest Importance
70 -re state" Thus conceived as politi-
.r1 machine. II is declared by the author
.rat the bank never threw Of entirely its
r,o1ltical trappIngs. and Il finally died as the
result Of polit!cal euIittes and jealousies
The cso:tsl Of the hank. which was fixed at
s160n3 0o6. was allowed 10 be subscribed TO
the PROPORTION Of three-Quarters in United
States stock bearing per cent interest, and
.ha President OF the United States was
authorized to subscribe on behalf Of the
government 100000 An equal amount
vas 70 De loaned by the bank TO the gov
ernr1ent. which vas 70 te repaid IN ter
equal annual instaluents.
The government soon availed itself OF
Tan.iIton's original project to borrow
Freely from the bank, and these loans
proved 10 be larger and for & longer time
-bsr vas Al first expected, causing en-
hsr-asslnent 10 the Treasury and uneasi-
ness 70 the bank before they were finally
settled This Indebtedness amounted
-zirhin four years 10 S6,200.o 600. CT nearly
tvc-tFlrds o. The capital OF the bank. The
loan Of so large e proportion Of its funds
crippled its services 10 commerce and
manufactures and made il difficult even 10
continue the temporary loans required TO
facilitate the financial operations Of the
Forernulent- Ultimately the loan was re
yald, partly from the proceeds Of the sale
Of tie government holdings of bank stock.
As these shares were sold Al premium,
- scre cases As high as 4S per cent the
government made profit CT s671. soc, eX-
elusive Of dividends received 10 the amount
q s1.1o1.72u-
Jefferson never gave VI his sntagonisrn TO
hanks in general ana TO the Bank ot the
United States il particular. He permitted
6IaIlali1. his Secretary OF the Treasury.
however 10 support the recharter Of the
bark and the failure OF Congress to al-
thorize il was dIsagreeable surprise for
the business community. The renewal OF
the charter was indefinitely postponed IN
the House on January p, 1911, by a vote q
G - g. while IN the Senate the bill failed
by the casting vote Of Vice-President Gin
ton The bank Nquidated its affairs as
promptly as possible. ard SIS buildings and
p large part o. its assets were taken over
r. the private bank established ~ Stephen
GIr2-d.
Ia rscoEutIaS the history Of the Second
Bank OF the United States. which was char
tered in Isi6 with capital Of s35. aoaeoe. Pro
1esser Dewey pursEes the plan OF analysis
b subjects rather than d narrative OF
cents II the order of time He points cut
that many OF the difficulties Of the bank
Hnd Of The country were caused by the de-
;iciency Of specie and the excessive issues
O. notes by the local banks.
The political conflict between President
Jackson snd the bank is not discussed in
great detail by Professor Dewey, because
CT 1he fulness with which these aspects Of
1t career have been discussed II political
histories
Ee declares. IN summing I'd the lessons
e be drawn from the history OF the bank.
1aat the circumstances which gave rise 10
TIE esIs bIishment Of the second bank were
altogether different from these which have
brought about Z discussion Of the question
Ct q central bank a. the present juncture,
that the bank in its .aal operations was
nothing more or less than large CONNER
claI bank with practically the same func-
slCus as other banks established under
Etsta Charters. and differed from them in
lIttIe save size and enjoyment OF few spe-
C-zl privileges.