The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1910-09-30

vi every Civilized community. The
best practicable currency, in my
Judgment, would be currency of
coin, admitting the use of large notes
only for the convenience of commerce.
such currency, however, is only at
talnable through the legislation of
congress and the action of the general
government"
Chase's Scheme
1t was during the summer of 1861
while deep in the problems of war
nnance, that Mr.. Chase came to rea-
NE the benefits to be derived from
tne preparation and delivery to in,
stltutlons of notes prepared for cir
culation under national direction and
to be secured as to prompt conyerti-
blllty into coin by the pledge of Unit
ed States bonds" This plan. laid
before congress in the finance renort
OF December. 1861, suggested a rene
dy for the currency situation very diff
lerent from that usually proposed.
up to this time state regulation had
been looked to as the way reform
must come.
The merits of his new plan, as Mr..
Chase states them in his report. were
that the people, "in their ordinary
business, would find the advantages
OF uniformity in currency; of uniform
ity in security; of effectual safeguard,
II effectual safeguard is possible.
against depreciation: and of protec-
ton from losses on discounts and ex-
changes; while in the operations of
the government the people would find
the further advantage of a large de-
mand for government securities; of
Increased facilities for obtaining the
loans required by the war; and of
some alienation of the burdens on in
dustry through elimination of the
rate of interest of participation in
the profit of circulation without risk
ing the peril of a great money monopo-
ly. further and important advan-
tage to the people may be reasonably
expected in the increased security to
the union springing from the COM
| mon interest in its preservation Great
ed by the distribution of it's stocks
to associations throughout the coun-
try as basis of circulation"
This plan, Mr.. Davis says, once
launched by Secretary Chase, was
steadfastly adhered to, in spite of
very great opposition from the state
banks and other interests, until con-
law. One of those who supported
him was Alphonso Taft of Cincin-
natl, the father of the president of
the United States. On December IL,
he wrote Mr. Chase complimenting
him upon his report and saying that
if congress should adopt his recon-
mendations it would in itself be no in
considerable compensation for the
war.
Little headway was made during
1862. Mr. Chase, however, was be-
coming more and more convinced of
the vital Importance of his measure.
He renewed his recommendations,
stating that owing to their freedom
from control the banks were enabled
to meet every demand upon them
by new emissions of notes, thus in
creasing their depreciation with every
loan that might be effected through
them. His anxiety over the adoption
of his plan may be seen from a let
ter written to the banker, John j.
Cisco on Dec. 10, 1862. 81 am firmly
convinced" he said. that the adoption
or nonadoption of this plan is the
turning point of credit or discredit.
1t it be adopted, the finances can
be placed on a firm and satisfactory
| footing. If it be not adopted, the
finances are delivered rudderless, to
be tossed helplessly on the gulf of
irredeeamble currency by conflict
ing gust of opinion until the inevita-
BILE wreck"
Sherman's lnuuence
In the opinion of the author, the
| final passage of the act of Feb. 25,
1868. Mr.. Chase owed to Senator
John Sherman. perhaps, more than
to any other person. His support was
secured at time when the Hooper
bill, introduced in the house, was
meeting with opposition greater than
it could overcome. The intercession
of Jay Cooke and other bankers, the
impressive nature of Mr.. Chase's de-
mand the support of the president and
his cabinet, all contributed to Mr..
Sherman's conversion. Sherman made
some amendments in the bill, intro
| duced it in the senate, secured its
passage after a forceful speech, and
then sent it down to the house. Here
in it's new form and subject to the
same pressure which had secured
Sherman's support, it now met with
| success.
The organization Of national banks
proceeded very slowly. Most of
those formed had but little capital.
The national bank act did not at once
secure the support of the financial
world. On June 8, 1864, the Sherman
act was repealed and one more satis-
factory to Mr.. Chase enacted. But
even this did not bring about the
naturalization of the state banks the
secretary had hoped for.
An exclusive national currency was
however, made certain by the pass
age on March 8, 1865, of an act which
laid tax of ten per cent upon the
amount of notes of state banks which
should be paid out by any bank or
banking association after the first
day of July, 1866. The effectiveness
of this drastic measure can be seen
by the following figures. The number
of national banks which was 5S4 on
November IS, 1864, had by Oct. l.,