The Guthrie daily leader. [volume] (Guthrie, Okla.) 1893-1996, 1910-08-12

Washington, Aug 1.-THE differ
ente between the character and statn.
|pf the First and Second banks Of the
United States incorporated early III
tic country's history, and the cor
ccptlon Of central bank az develop
ed under modern conditions In Eilt
rope, Is brought out In a forcihle m1n
ner In a volume lust made public BY
the National Monetary commission
The volume consists OF two parts =
o study Of the First bank of the Unit
Cd states, by Dr. John Thorn Holds
worth, OF the University OF pittsbugg
and study of the Second bank Of The
FUnitcd States. by Dr. Davis II. Dew
ey. OF the Massachusetts Institute OF
Technology, tho author Of "A Finan
cial History OF the United States"
The essay OF Doctor IOldsworth re.
counts the plan Of Hamilton to foun
a bank for the purpose Of aiding the
Government, which became law IN
1871 II Is declared by Hamilton that
. national bank was not "a mere mat
ter OF private property, but political
machine of the greatest Importance
to the state Thus conceived as 2
political machine. Il is declared. by
the author that the bank never threw
cf eDtircly It's political trappings, and
Il finally died as the result OF political
enmities and iealousics.' The capital
of the bank. which was fixed at sl0,-
100000. was allowed TO be subserih.
ed to the proportion Of three-quartefs
In United States stock bearing 6 per
cent interest, and the President OF the
United States was authorized to sub
scribe on behalf of the Government
se.c00.000. An equal amount was e.
be loaned by the bank 10 the G0verD-
ment which was to be repaid In ten
equal annual installment.
II is obvious. from these details,
that the capital was raised more large,
" by bookkeeping transfers than by
the actual payment Of specie, at =
time when specie was extremely
scarce. The device by which Haml'.
ton carried through the government.
subscription Is defined as IAN ingen.'
Gus example OF financial Juggling.
sborn Of technicaitics, the Govern
mcnt paid for its stock by bills Of ex.
change on Amsterdam. then II borrow.
ed these bills and gave its note for
81. 900 900. payable. in ten equal an.
nual installments, with interest at 8
per cent. The practice thus instituted
by the Government itself Of paying
subscriptions with stock notes was
followed widely, and In numerous in.
stances with disastrous effects in the
next fifty years. The central Office
of the bank was in Philadelphia, on
the present site of the Girard Nation
al Bank, and of the first board of %
directors II were from Pennsylvania
and from New York.
Hamilton was not in favor Of
branches, but they were soon cstab.
lished at the. leading commercial cen
ters Of the country and entered iEto
clearing and other relations with the
local banks The Government soon
availed itself of Hamllton's original
rroject TO borrow freely from thc
bank. and thesc loans proved to he
larger and for a longer time than
was at first expected. causing embar-
rassment to the treasury aud uneasi'
ness TO the bank before they were fir.
ally settled. This indebtedness
amounted within four years to S..
100000, or nearly twotbirds Of tbs
capital of the bank The loan Of 50
large proportion Of it's funds Grip
ped its services 10 commerce an'l
manufactures and made It difficult
even to continue the temporary loans
required 10 facilitate the finacial op-
erations of the Government Ultimate
ly the loan was repaid. partly from
the proceeds OF The sale of the gov
'ernment holdings of bank stock. Al
these shares we're sold at 4 premiunl
In some cases as high as As per ceG,,
the Government made profit al
s67l.860. exclusive OF dividends rn
ceired 10 the amount Of it.f0t,720.
The First bank of the United State
did not have the exclusive privilege
Of note issue. but customs duties we,, t,
rsdc payable In the notes OF the bsnk
which gave them wide crculatiol
The bank. moreover. exercised a sal
utary restraint upon the other bank,
! by presenting their notes prompt,
for redemption when received ovel
its counters The passing Of the 90
litical control of the country from tn,
bands Of tic Federslsts to those o
the Democrats at the beginning o
the nineteenth century. II is declares
by Doctor Holdsworth. had no immc
date effect upon the interests or for
tuuCq of thp bark Thou~h aiwavp ~,