Evening journal., 1913-04-26
NEW NEWS OF YESTERDAY
The One Bank Which Did
Not Suspend Specie
Payment
Ey Holland.


Il was always of the opinion that
il would have been possible for the
banks of the United States to have
avoided the suspension of specie pay
ments at the beginning Of the Civil
War 1t was the suspension of specie
payments which in part made it
necessary for the government to ere
ate the national banking system"
So said the late George S. Coe to
me year or two before his death.
Mr. Coe was one of the great Ameri-
can bankers Of his generation
1T was in The directors room Of
the bank, OF which he was for years
president that Salmon p. Chase, sec
retary of the treasury nnder Lincoln,
addressed a group of bankers repre-
senting New York, Philadelphia and
Boston institutions, few months
after the Civil War began said MT.
COe.
HE asked these bankers to furnish
the government fifty millions In gold.
The bankers promised to do all that
he requested They furnished IN all
about hundred and fifty millions in
gold, for which they received govern
ment certificates.
You probably know that it has al
ways been the impression that out
side of the banks which were located
west OF the Rocky Mountains all Of
the banks of the United States sus-
pended specie payment
"The California banks being located
within convenient distance of the
great gold mines of that State were
able to procure plenty of gold, so
that il was not necessary for them 10
suspend specie payments.
"This general statement, however
is not absolutely accurate, and il is in
the single exception-for ] have no
knowledge of any other exception
than the one ] have in mind-that |
find abundant reason for the claim
that | have always made that the
banks of the United States we're not
actually forced to suspend specie pay
mont in the time OF the Civil War.
81 remember a very great and mas
terful speccr which was made by
Roscoe Conkiing when he was a
member of the lower House of Con-
gress i'm the sessions which followed
Immediately after the beginning OF
I the Civil War Conking took the
ground then that it was perfectly
/ feasible TO maintain specie payments
and that a very great increase in
the cost Of carrying on the war would
! inevitably folio wthe issuing of paper
money which was not immediately
redeemable in specie.
"The city of Pittsburgh and bank.
! cr of Pittsburgh are entitled TO the
great honor of demonstrating that
il was perfectly feasible TO maintain
specie payments at that time.
~ have always had the warmcsi
admiration for the great ability whici
was displayed by John Harper, of
Pittsburgh. in the management o.
the Bank of Pittsburgh at that time
Mr. Harper had a clearer vision oi
what was coming just before the be
ginning of the Civil War than did any
other American banker of whom
have any knowledge. His theory wat
that his bank. thcn a State institu
ton. should always be able to re
deem its notes in specie He demon
strated that this could be done.
Il had heard that the Bank of Pitts
burh some months before the Civi
War. began. was securing gold in New
York and Philadelphia. | presumed
that this was for some special emer
gency. but for one which Mr.. Harpc
foresaw and which at the TING die
not exist
by laying in a very large stor'
of gold and by carefully outstanding
the notes of his bank and by observ
ing great caution in emitting thcs
notes, Mr. Harper was able Away
to meet a demand for the paymen
Of notes in specie.
IF he could do il, why couldn't TIN
other banks of the United State
have done it? | think it ought to s.
down in history that there was on
American bank east of the Rock
Mountains, located in the busy cit
OF Pittsburgh, and bearing the nau
OF that city, which was so skillfull
managed that il was able to pas
through the great crisis without sus
pending specie payment hav
sometimes estimated that the in
creased cost Of carrying on the wa
and the general business of the coun
try which mas occasioned by tn
exclusive use of paper money, whic
was at a heavy discount as com
pared with gold. was at least 33 pc
cent of the entire government deb
or about a thousand million dollars.
Copyright, 1918. by p. ] Edwards
All rights reserved.