Bisbee daily review., 1910-08-14
FIRST AND SECOND BANKS OF
THE UNITED STATES DESCRIBED

newal OF the charter was indefinitely
postponed in the house on January
"a, 1911, by a vote OF 65 to e4. while
in the senate the bill failed by the
casting vote of Vice President Gin
ton. The bank liquidated its af-
fairs as promptly as possible. and its
buildings and a large part of its
assets were taken over by The pri-
vate bank established by Stephen CT
rard.
In recounting the history Of the
Second bank OF the United States,
which was chartered In 1916 with a
capital of $4,000. 900. Professor Dew
ey pursues the plan of analysis by
subjects rather than a narrative Of
events in the order Of time. He
points out that many of the difficult
ties of the bank and OF the country
were caused by the deficiency OF
specie and the xecessive issues of
notes by the local banks. During the
period of expansion after 1911 and
the speculative profits which attend
ed specie suspension and unwise 10
cal legislation state banking bad as
sumed proportions which were beyond
control If the bank of the United
States had been organized when com
mereial operations were normal and
banking methods were sound. the
bank would undoubtedly have had a
different history. Established. how
ever after the local banks had en-
joyed a free license for their opera
tions. it was well nigh impossible for
it to do its work without clashing
with local and selfish interests. The
pressure of the bank and the nation
al treasury threatened to force re-
sumption of specie payments by the
local banks. but their resistance de-
llayed resumption until the summer
of 1917, after a conference in Febru-
lary with representatives Of the
banks of New York, Philadelphia.
Baltimore and Richmond. The bank
of the United States itself made
mistakes in speculative loans. difficult
to avoid in an undeveloped country,
and allowed the branches. especially
. in the South and West, to extend
discounts beyond the margin of
; safety.
i The political conflict between Presi
{ ldent Jackson and the bank is not
!. discussed in great detail by Profes
2 isor Dewey, because of the fullnes.
/ with which these aspects of its ca
r ireer have been discussed in politica
v histories. He declares, in summing
, up the lessons to be drawn from tn
/ history of the bank, that the cir
+ Icumstances which gave rise to tn
g establishment of the Second banl
e were altogether different from thos
n which have brought about a discus
+ sion of the question of a centra
) bank at the present juncture; that
= the bank in its final operations was
lnothing more nor less than a large
I the same functions as the othel
; banks established under state char
? ters, and differed from them in LITTLE
+ Save size and enjoyment OF few
0 special privileges; that the bank be
e gan its operations during a period O
a commercial decentralization and de
/ veloped it's practice during a period
e lof crude banking methods as meas
g lured by current standards; and, Fl
q nally, that the bank in its closing
+ years was subject to political at
+ tack-violent, indiscriminating. and
e even INSCRIPTIONS in its character
S lit is difficult, therefore, to find in
: the experience Of this institution any
e lIesson of Importance which may be
0 of special service in the preparation
4 af a plan for a national central bank
+ lat a later period. when business
a methods have been Transformed by
; 1.-THE railroad, the telegraph. and by
= the development of cooperative enter
: lprise. to say nothing of the change
' in banking law tharough the general
e substitution of natnonal supervision
!. lfor state control"