The Guthrie daily leader. [volume] (Guthrie, Okla.) 1893-1996, 1910-08-12
FIRST AND SECOND u. S. BANKS
Difference Between the Charters Of Early Day
Financial Institutions

Esrded as 10 Federalat institution,
and managed largely by men Of Fed
eralist leanInxs, It's affairs we're ad'
ministered In the main with an eye
single 10 business and profit, and It
never be came embroilcd In political
controversies as did IT'S successor, The
Second bank of tho United states
Only once did the treasury, under
Democratic. n administrator apply 70
toe bank for aid, AMI then 1t was as
cheerfullyl and generously given ar
under earlier Fcderalist ajmiulstra
It.oDH.
JEFFERSON never gave up his anta$
onism TO banks In general, and 10 the
Bank Of the United States In partic.
uja, lie permitted Gallatin. bis sec
rctary of tho treasury, however. t,
support the rcchartor Of the hanN
and the failure Of congress 70 author
.izc II was a disagrccablc surprise for
the business community. The renew
al .ofi fhe charter was indefinitely pos.
poncd Ia. she house on January ~
1911, by a vote Of IS to g.. while n
the senate the bill failed by the cas-.
ing vote ct Vice President Clinton
The bank liquidatcd Its affairs n
promptly as possible, and its build
ings and 4 large part OF Its assets
were taken over by the private banN
established by Stenhen Girard.
In recounting the history of the
Second bank Of the United States,
which was chartered in 1916 with u
capital OF s35 100000. Professor Dewey
pursues the plan Of analysis y; SUD,
jccts rather than a narrative of
events IN the order Of time. He points
out that many OF the difficulties %
the bank and OF the country were
caused by the deficiency OF specie aud
,1,c cvresalye issues Of notes By the
local banks. During the period OF eN-
nansion after 1911 and the speculative
profits which attended specie suspcn'
sion and uuwise local legislation state
barking 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 undoub'.
edlv have had a different history. Es.
tablished. however, after the local
banks had enjoyed a free license FOR
their operations. it was we'll nigh i'm
possible for II to do its work without
clashing with local and selfish inter.
csts. The pressure OF the bank and
the national treasury threatened u
force resumption Of specie payments
by the local banks, but their resist
ance delayed resumption until the
summer OF 1917. after conference IN
February with representatives Of the
banks Of New York, Philadelphia. Ba'.
timore and Richmond The Bank of
the United states itself made mis-
takes in speculative loans. difficult %
avoid in an .undevclopcd country. and
allowed the branches, especially IN
the South and West. to extend dis
counts beyond the margin of safe.i.
The political conflict between Pres
ident Jackson and the bank Is not dis
cusscd In great detail by Professor
Dewey. because of the fullness with
which these aspects Of It's career bar.
been discussed In political histories.
lie declares, In summing up the les.
sons to be drawn from the blitory OF
the bank that "the circumstanc %
which gave rise to the establishment
OF the second bank we're altogether
different from those which hsga
brought about discussion of the
question of q central bank al the pres
cpt juncture: that the bank In it's hp-
al operations VAS nothing more or
less than large commercial baak
with practically The same functions rs
other banks established uuier state
charters, and differed from them in
little save size and enjoyment OF i
fev special privileges: that The bang
bssu It's operations during q period
of commercial decentralization and de-
velopeJ It's practice during period
of crude banking methods as meas-
urcd by current standards and, fin
ally, that the bank In its closing years
was subject to political attack
violent, lndiscriminaliug aud even M
scrupuIous IN its character. II Is dIf'
fcult, therefore, TO find in the expert
cnce OF this institution any lesson
OF importance which may be of spr
tial service in the preparation of s
plan for ? national central bank at a
later period. when business metho,s
have been transformed by the rail
road. the telegraph. aud by the de
vcfopuiont of corporate enterprise, IL
say nothing OF the change in banking
law through the general substitution
Of national supervision for state cot.
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