Evening journal., 1913-08-19
NEW NEWS OF YESTERDAY
Men Responsible for Ma
tiOnal Banking System
By Holland.


When i recall the agitation which
preceded the passing of our present
national banking law 1 sometimes
think that good argument would be
supplied to those who have some
times asserted that the ablest financial
constructive forces in the United
States so far as national finance and
hscal. policy are concerned were
men who never had much training
as bankers This remark was made
TO me by the late John Thompson.
who was one of the first, if not the
nrst to advocate, in communications
to Lincoln's. secretary OF the treas
ury, Salmon P. Chase, and to members
OF Congress the enactment of legis-
lation by which national banking
system could be secured.
Il know that after Secretary Chase
accepted the fundamental principles
OF the national banking law, quite a
number of leading New York city
bankers went over TO Washington
Tor the purpose of dissauding the ad-
mlnlstration from recommending any
plan of that kind" he continued
| won't name the men who went
TO Washington. Two OF three are
now living. They had ali gained
bankers, managing banks which were
operating under state charters.
Ihey were, Of course, apprehen-
sive that If a national banking law
were adopted the result would be
disastrous to state banks. They re-
allied that under the proposed bank
ing system the government itself
would stand as sponsor to these in
stitutions and would be able to fur
nish perfect guarantee for the Sc
curities of notes issued by national
banks
"on the other hand, who we're the
men who were responsible for per
suading Secretary Chase and Mr.
Lincolns administration and Con-
gress itself to support the plan for
a national banking system There
we're several of them and none OF
them so far as | know was a prac-
teal or experienced banker.
II is curious fact that the funda-
mental idea Of the National banking
system, which was the issuing of ma
honal bonds held at Washington as a
sort OF collateral trust security, oc-
CURED to several men at the same
time. They are all entitled to what
ever credit there may be in the plan
Il had no idea when I worked out
the plan for the national bank system
that my longtime friend, Orlando B
Potter, of New York, had also worked
out an almost identical scheme. Both
Mr.. Potter and ! were unframed as
bankers. although Of course, / had a
good deal Of familiarity with the state
banks through my publication of the
Bank Note Reporter But Mr.. Potter
was a lawyer. It is my recollection
that he was not and had never been a
stockholder of a state bank Both OF
US as lads we're compelled to earn our
living / think Mr. Potter was a sort
or peddler of farm produce in Cape
Cod when a young man and earned
money enough In that way to pay for
a partial college course. j was far
mer's boy and ! began my career in
New York as. manager Of a lottery
which was legalized by..the state ol
New York TO aid Union College.
The representative in Congress, p
9. Spalding of Buffalo. who intro
auced the bill providing for the estab.
ishment of national bank system
was a lawyer. and he once told me
that he never had very much practi-
cal experience in banking. II was a
plain, obscure citizen of Ohio-I have
forgotten his name--who recon-
mended to Secretary Chase that a
law be adopted which would enable
the latter to issue government notes
carrying the legal tender qualities
Governor Chase at first thought the
proposition indefensble because un-
constitutional. But he afterward
adopted il and so did Congress. In
that way the greenbacks. so called
we're issued. and with this great re-
source, coupled with the national
banking system, the tide began to
turn in favor Of the north in war
days because by means of the green
backs and national bank currency il
was possible to realize upon the stu.
pendous natural resources of the
north and thus secure the funds
needed for carrying on the war.
think l could safely say that our ma.
tional banking system and the green.
backs represent plain common sense
ce nlain men who had no practical
experience at banking, and who were
at the beginning opposed by a great
majority Of the leading bankers oi
The United States"
(Copyrght, 1913, by E. J. Edwards
All rights reserved).
Tomorrow Mr. Edwards will tell o.