Evening journal., 1913-08-23
NEW NEWS OF YESTERDAY
Why the New York Banks
Suspended Specie Payments
BY Holland.

once asked the late George s. Coe
why the State banks of New York de-
cided TO suspend specie payments only
about six months after the Inauguration
Of President Lincoln. Mr. Coo WAS for
many years esteemed one OF the ablest
banking forces of the United States In
the directors room of the bank with
which he was long associated. the sec
retary of the treasury. Salmon J.. Chase.
met early in the Civil War representa-.
tives of the New York. Boston and
Philadelphia banks and stated TO them
what the imperative needs of the gov
ernment at Washington for money
were
Mr. Coe has often described TO me
the profound impression which was
made by Secretary Chase. at that time
upon the assembled bankers. saying that
/ il was sufficient 10 induce the bankers
10 agree To furnish fifty millions of gold
on specie and 10 take government bonds
i'm return. and subsequently to furnish
a hundred millions more.
The banks of New York, Boston and
Philadelphia" said Mr.. Coe. bought IN
Ian hundred and ffty millions of gov
ernment bonds rs a patriotic duty AS
Ia pure business proposition at that time
they could not have been persuaded 10
purchase government bonds. The credit
Of the government was not very high.
Secretary Chase rad been compelled TO
ldevise various oXpedients with which TO
meet the immediate demands upon the
treasury department. which he found
practicallv empty when he became sec
lretary. Hi, appeal 10 us was made
lupon patriotic grounds. He told MS that
line people of the North were willingly
submitting 10 very heavy taxation. that
1.-The Young men of the North were enlist
ling i'm great numbers, willing to offer up
their lives ii needed for the preserva-
tion of the Onion. He said that II was
vital that the government at Washing
tom have cold and he felt sure that he
could appeal to our sense OF patroh'
duty 10 help him ont of this emergency
sWell there was no answer to thli
plea except a favorable one. we dit
buy in ali bonds of a par value o
$3.50 900 600. and that action greatly
relieved for the time being the EN-
barrassment Of Secretary Chase h'
told ms that he looked forward 70
legislation by Congress which Woul'
make IL easier for him to meet th'
demands upon the United State
treasury which the cost OF the wal
would entail
well. we got the bonds and w
Welded up our gold and silver w
wanted to sell the bonds as rapidL
as possible. We found speedily ina
there wasn't any market for the bond
unless we were willing TO recelN
State bank notes in payment 10
them We thought when we bough
the bonds that we could sell them !
people a few at time so TO speat
and in that way get our COIN Dacf
But the people were not wiling =
part with their gold and silver. The
were ready enough TO buy the bond
in case they could pay for them !
state bank notes which we're the onl
paper currency at that time in cireu
iation excepting a few millions O
emereency paper which Secretar
Chase had issued.
sWeH, what We're We to do2 w
had a hundred and fifty millions
bonds on our hands. behind Whic
= stood the credit of the United state
, government. which. an that time, wa
not very high We New YORK PAM
ers met many times 10 discuss tn
situation. we KNOW ihdl hoal uihh
gold and silver had begun and "
we're we'll aware that if we paid COZ
over our counters we we're not lik'
iy 10 get It back again. 'Thereioi
the proposition was made that t
, New York banks should suspen
specie payments. The Clearing Houi
Association of New York was reao
10 help us in the emergency, and
3 think that IL was at that time th
the association FIRST issued clearini
house certificates: but the real re-
SON why the banks of New lol
: suspended specie payment IN rs
2 was in answer 10 your question o
8 cause they had bought hundred a.
B 6ftv millions Of bonds from Z
8 government paid for it in golo ~
n found that they were unable TO 81
,- the bonds unless they would recei
Q In payment for Them state hal
lr notes. ,
4 Downright. 1913 by F. J Edward
e All rights reserved)