Evening star., 1928-02-26
j. S. TREASURY IS CLASSED
AS GREATEST BANK IN WORLD
As Chief Financial Officer, Secretary Has
Supervision of Receipt and Disburse-
ment of $4,0O0,OO0,000 Annually.

into existence by the close of 1890
the Bank Of Massachusetts at Boston.
the Bank OF New York in New York
and the Bank Of Maryland in Balti-
more. It would seem probabl, that pre-
vious to the organization of banks. es-
pccially In the later colonial period. the
leading merchants to some extent must
have performed banking functions or
accommodated their brother merchants
with the exchange facilities needed in
making their settlements abroad. Again.
there must have been some interchange
Of credit facilities between the mcr-
wise it is hard to conceive how the
business of those somewhat primitive
communities could have been carried on
Brought about by the need for bank
ing facilities on considerable scale,
Alexander Hamilton laid before Con-
gress on December IA. 1890. his notable
report on a National Bank. In this
report Hamilton sets forth the need
for credit facilities and explains how
they can be met and concludes by rec
ommending the organization of bank
for this purpose. to be under Govern
ment auspices, with capital provided
partly by the Government and part
~ by the public III general and
managed by board Of directors So
lected by the stockholders. The plan
for organization and operation was not
so different from that under which the
Bank Of England functions. this being
a private corporation operated. how
ever. in close touch With the Govern
ment and almost as a branch of the
finance department Of the Government.
The Bank Of the United States wcs
not organized without opposition, but
finally it came into being on December
i2. 1891. with a capital of $4,000 900,
Of which $4,000. 900 was subscribed by
the United States Government. AS the
Government had no money with which
to make this subscription. 1t was in
geniously arranged that the bank should
lend 10 the Government the amount
necessary for its participation. the
sums so lent TO be repaid in 10 annual
installments Thus the subscription Of
the United States Government did not
at first contribute 10 the capial re-
sources of the bank. but 1t did give
the bank the prestige of having the
Government Itself as stockholder.
The bank was made sole depository
of governmental funds and given the
sole right of issuing circulating notes:
that Is. so far as the Federal Govern
ment was concerned II could not in
terfere with the rights of the States to
organize banks which could issue cir
culating notes. The bank was chartered
for a period of 20 years and operated
for that period. AT the end of this
time it wound up its affairs and went
out Of business. because. influenced by
the jealousy of the State banks, which
by that time had increased very much
in number. Congress refused to renew
its charter Then followed a period
during which the Federal Government
was compelled to depend on the facili-
ties afforded by the State banks for
handling its receipts and disbursements,
and the country as whole was de-
prived Of the advantages of a currency
issued by a central bank and was COM
PEELED to use the currency of the vari-
Gus State banks. some issues of which
were good and some decidedly other
wise This state of affairs was SO un-
satisfactory that in 1916 Congress char
tered the second Bank of the United
States. which was net as well managed
as the first bank. especially in It's
earlier history. when 1t very nearly be-
came involved in serious financial dif-
6ci1fffeS