Year: 1867

I


financial situation was at its loves


sbb. The Government could not, a


any extent. avail itself Of the t6ti
existing banking system, for, with th


exception of the noble response o


the New York, Philadelphia. an,


Boston associated banks, in furnish


ing the 6rst dRy million loan, ii,
Secretary of the Treasury sought il
VAIN for that concert Of action an,
financial strength among the banks o


the country necessary to NEE this dali,
increasing wants. The only msnnet
in which the old system could hav,
been made even temporarily availabl,
would have been by granting -.
State banks the WIDEST license Of is
sue, thus flooding the country with
an irredeemable, and, TO greal
extent, unsecured paper currency
which long before the close of hostil.
tiles, must have led to financial dis
aster aud collapse. For not only
would the then existing banks have
greatly increased their circulation
but hundreds of others would have
been established to profit by the con
fusion of the times The increase OF
bauks would naturally have beer
greatest in those States where the
greatest license of circulation pre-
vailed, aad where there were fewest
checks upon irresponsible banking.
As the only means Of bringing 6nan
cisI order out of chaos, of giving the
country a safe aud uniform currency,
Of restoring the confidence Of the
people, aud, above all, of furnishing
the sinews of war, our Government
originated, organized, and put in sue
cessiul operation, that splendid sys.
TEN of National Banking institutions,
which did much to enable the nation
to meet its enormous expenditures
fight the war TO q victorious close
and which still remains one of the
nobleSt fruits Of our great struggle.


The plan thus devised and put in
operation was not designed az a TEN
porary eIpediSnt to meet a great
emergency and die with it, but was
meant to be a permanent financial
system, which should not only
strengthen the nation during costly
war, but also benefit the people
through m'ny years of peace.


Before Introducing the new system
il was necessary to remove the old
and the latter was induced 20 leave
the 6eld partly in consideration of
the beneficial features Of the new
system, and partly by compulsiou.
Certain rights aud privileges were
proffered by the Government to the
old banking corporations If they
would surrender their State charters,
retire their circulation, and nrqanize
under the uniform plan, now known
as the National Banking system.
Where these inducements were insult
fcieut to elfsct the change, the stimu
lus Of force was applied in the shape
of a special tax on the circulation of
all State banks. One of these con
ditions on which the State banks sur
rendered their charters, and confirm
ed themselves 10 the national plan,
was the pledge from the Government
that they should be permitted to is
sue certain amount of circulating
notes. Particular mention is here
made of this one condition of the
change from the old system to the
new, because from it is drawn the
chief argument Of the opponents of
the national banks, and also in order
that the condition mentioned may, at
the outset appear in its true charac-
ter, as one of the terms Of the con
trast between the National Govern
ment aud the old banking corpora
tions 3f9


The change from the old plan to
the new was rapid and complete. The
immediate results of the change, al
though important beyond measure,
may be sketcbed in a single sentence:
1t swept from existence currency
which was at once mongrel in ap.
pearance, unstable in value, and, with
few exceptions, insecure in character,
and substituted therefor a currency
uniform in feature, everywhere equal
in worth, and safe as the Republic
itself.


1t secured for the Government an
immediate aud much needed loan Of
three hundred millions Of bunk oapi-
tai, and established throughout the
country sixteen hundred most efficient
and responsible agents, for the nego
tiation and dissemination of other
and far greater loans. am glad Of
this opportunity Of bearing witness
to the fact that, not only in negotist-
ing the frst FIVE hundred and four
teen million loan Of five!twenties, but
more particularly in the subsequent
negotiation Of the eight hundred and
thirty millions of seven .thirties the
country was largely indebted to the
National Banks for the promptness
with which the National Treasury was
supplied with sorely needed funds.
Auu NhO ldNc nOidlSlb VI liAo phAVh
army should understand that, at a
time when their monthly pay was
largely in arrears, the money not only
for their wages, but for their subsist-
ence, even, was raised through the
action and earnest cooperation Of
these same National Banks.


Such was the origin of the National
Banking system.


II. CHARACTER OF THE NATIONAL


BANK CURRENCY.


The notes of the National Banks
possess every element required in a
good circulating medium. AS already
remarked, they are uniform in ap
pearance, everywhere equal in yalu,
aud just as secure as public and
private credit combined can make
them.


]. This uniformity in the appear
'anee of the National Bank notes en-
ables every one, even those who can
not read IN raoaynixa tho curranaN