Cayton's weekly. [volume] (Seattle, Wash.) 1916-1921, 1918-02-09
THE GLORY OF THE AMERICAN RE-
PUBLIC
The Science of Government
The Hope and Dependence Of the Human
Race
Copyright 1917
BY ORLANDO BELKNAP POND
Cali rights reserved)
CHAPTER XII
The Monetary Systems Of the Nation


perience in the subjects Of banking. We
do not mean to say they were ignorant of
financial matters, for such would not be the
truth. They engaged in many enterprises,
some of which were extensive and largely
a monopoly, extending far into the interior;
such for Nuisance as the fur trade; and some
were over the seas including the West In
dia trade and some were purely colonial,
being the trade in foreign and domestic
goods between the colonies; but the greater
part was local and of limited extent. It re-
quired finances and knowledge of trade
to carry on these enterprises successfully;
and those ged in them were people we'll
versed in their special lines and efforts.
But the people generally were engaged in
agricultural pursuits; in the raising of cat
tie, sheep and hogs, and depended largely
upon these for maintenance exchanging
their surplus for other needed articles OF
use and requirements; consequently they
had little or no use for banks and for bank
ing. No such people could gain a knowl-
edge and experience in the subject of ma
tional monetary system and national bank
ing
The first bank of the country was organ
lied in 1880, little before the close of the
war of the revolution. When the present
government was established there were not
more than three or four banks in the coun-
try and these were managed upon such
lines as had been developed in theEuropean
nations at the time, being adapted to the
local conditions and were purely state
banks.
1t will be seen by this that their expert
ence was limited, and they were not pre-
pared to establish national system of fin
ance beyond the coinage of gold and silver.
The future was left to learn by it's expert
ence; and discover it's requirements, and to
establish such system seemed best
adapted to it's conditions.
The state banks increased rapidly in num-
bers as the affairs of the country became
more and more settled. Many of the more
substantial ones held limited amount Of
government coin as a sustaining basis for
their bills of issue, and many others had
little or no sustaining basis except perhaps
the good faith of the officials; while others
still, were mere ''wild cat'' schemes and
often promoters of speculations Of various
kinds and without doubt were in some in
stances engaged in actual swindling.
This system of banking and finance pre-
vailed for more than eighty years from the
organization Of the first bank in 1880 until
the time of the civil war
During this period there was scarcely ever
sufficient coin to meet the requirements Of
trade, which was largely carried on credit.
lie people were IOICcu ny Illc ClIClllISCdu-
ces existing then to depend to large extent
upon bank notes in the transaction of bust
ness and to meet their obligations. These
bank notes when used beyond the local in
fiuence of the bank Of issue were invariably
at discount For instance, the notes, bank
bills of Philadelphia bank when offered
in Boston would be at discount and the
notes Of Boston banks offered in New York
would in the same manner be at discount
and so on ad infnitum.
The people had all the experience Of such
a banking system necessary and desirable
and it should not be lost sight Of, at the
present time and under the present circum-
stances when the country is considering
other and many defects still claimed to ex-
list; though we have no fear Of the resur-
rection of such system, nevertheless it is
part Of the history and experience of the
nation.