CHAPTER VII.

NATIONAL BANKING LAW, 1863-1872.

-

PAGES

Underlying principles of National Bank Act - Attempt of Secretary Dallas

in 1813 to unite State banks in a system― Article in "Analectic Maga-

zine," 1815- Alexander Hamilton's proposition-Letter of Prof. John

McVickar-Banking law of Michigan - Free banking law of New York

- Abijah Mann's claim - Difference between banking law of New York

and National Bank Act - Mr. Potter's proposition - Draft of National

Currency Act - Office of Comptroller of Currency — Appointment of

Hugh McCulloch - Enabling acts- Comptroller's reports of 1863 and

1864- Admission of State banks to the system - Tax on State bank

notes- Meeting of New York Clearing-House - Objections to National

system Unfavorable report - Reply thereto - Report of Comptroller

for 1865- Hon. Freeman Clarke succeeds Mr. McCulloch - Difficulty in

redeeming notes - Freeman Clarke succeeded by Mr. Hulburd - Prog-

ress of system from 1867-1870-— Reports of condition - Interest on de-

posits - Failures - Correction of defects in law - Resumption of specie

payments - Unequal distribution of circulation - Attempted legislation

of 1870-Sherman's prophecy - Increase of circulation- Mr. Knox suc-

ceeds Mr. Hulburd― License and income taxes repealed-Report of 1872. 91-111

CHAPTER VIII.

PROGRESS OF NATIONAL BANKING SYSTEM, 1872-1878.

Criticism of fixed reserves-Great fire in Chicago-Locking up money in

New York-Action of clearing-house- United States not preferred cred-

itor of National banks- Evasion of ten per cent. tax law - Marking

counterfeit and spurious notes-Panic of 1873- Issue of clearing-house

loan certificates-Panic investigations — Reforms of clearing-house-

Forced redemption of notes proposed - Withdrawal act of 1870, difficulty

of execution-Proposed exchequer bank - Act of June 20, 1874-Opin-

ion of Attorney-General — Fluctuations of circulation - Operation of

Section 4, act of 1874-Large reserves held, 1874-75- Comptroller's re-

port of 1875-Gold notes in California—Operation of redemption

agency-Designs and denominations of National bank notes - Discrim-

ination in the taxation of bank shares -Two-cent stamp tax- Usury

-Printing of notes-National bank law consolidated in revised statutes

-Recommendations of the Comptroller.

CHAPTER IX.

CONTEST BETWEEN THE LEGAL-TENDER NOTES AND NATIONAL BANK

NOTES, 1862-1878.

Two measures for furnishing currency for war - Legal-tender act temporary

and the National bank currency a permanent measure-Senator Sher-

man's opinion-Opinion of Mr. Spaulding - Obstacles in the way of the

banking system - Lack of organization among the banks in 1862 - Bank

loans to the Government in 1862--- National system suggested— Could

the war have been carried on with bank notes - Legal-tender funding

repealed - Comparison of legal tenders and bonds in 1863- Secretary

McCulloch's contraction policy - Errors in limiting bank issues - Act

112-131

of July 12, 1870-Effect of premiums on bonds — Unfavorable attitude

of Congress toward banks - Popular opposition to banks - Fiat money

and interchangeable bonds - Greenback convention of 1876- Bills in

House and Senate in 1878-Other measures -- Interview of Comptroller

of Currency with Banking and Currency Committee-Pamphlets in 1878

-Attacks on Resumption Act on the stump - Opinions of financiers and

others before Banking and Currency Committee - Operation of Act of

July, 1870, for redistribution of bank circulation - Redemption of Na-

tional bank notes - Act of June 20, 1874, and its operation - Effect of

Treasury influence on legal-tender notes - Uniformity of value prevents

redemption of bank notes in legal-tender notes - Voluntary retirement

of bank circulation - Act of January 14, 1875 — Operation of act of 1875

-Effect of bond premiums.

-

PAGES

182-151

CHAPTER X.

PROGRESS OF THE NATIONAL BANKING SYSTEM, 1878 TO 1880.

Act of January 14, 1875- Views of the Comptroller on Resumption - His-

tory of National bank circulation - Comptroller's report for 1879 - Gold

obtained for resumption - Refunding of the public debt - Contracts

for sales of bonds - Public debt of England-Imports of gold - Pro-

posals to substitute legal-tender notes for National bank notes — Value

of circulation privilege in 1879 — Illegal certification of checks - Comp-

troller's report for 1880-Gold certificates.

CHAPTER XI.

-

HISTORY OF THE NATIONAL Banking SYSTEM, 1881 TO 1884.

Legislation of 1881-Forcing National banks to buy bonds-Proposed re-

peal of act of June 20, 1874-Synopsis of bill of 1881-Veto of bill-

Withdrawal of bonds by banks - Attitude of the Treasurer of the United

States Extension of bonds in 1881-Renewal of National bank char-

ters-Extension act of 1882-Organization of new banks-Bank failures

in 1882-Losses by National bank insolvency-Contraction of National

bank currency-Comptroller's plan for reducing interest on bonds—

Over-certification of checks - Legislation of 1883-84.

-

CHAPTER XII.

HISTORY OF THE NATIONAL BANKING SYSTEM, 1884-1891.

Henry W. Cannon appointed Comptroller - Panic of 1884-Action of clear-

ing-house-National bank failures in New York - Form of clearing-

house loan certificates - Over-certification of checks - New York law-

Legal-tender certificates -Interest on deposits-Demand loans as a re-

source in panics -- Comptroller's report for 1885 - Liquidation of failed

banks-W. L. Trenholm appointed Comptroller - Decrease in National

bank circulation-Organization of National banks from 1882-1887-Re-

demption of three per cent. bonds - Comptroller's report for 1887-

Government deposits in National banks-Surplus revenues used in the

purchase of bonds — National bank failures in 1888-E. S. Lacey ap-

pointed Comptroller - Suburban banks - Indian Territory banks - Leg-

islation recommended - Reduction of circulation- Panic of 1890- Fail-

152-165

166-180

ures of Panama Canal Company and the French Copper Syndicate —

Baring failure-Action of banks in New York, Boston and Philadelphia

-Bond purchases.

PAGES

181-199

CHAPTER XIII.

PROGRESS OF THE NATIONAL BANKING SYSTEM, 1892-1899.

Decline in National bank circulation - Silver-purchase acts of 1878 and 1890

-Panic of 1893-Bank failures — Clearing-house loan certificates-

Decline in banking profits-Consolidation of banks - State and National

banks in New York - Presidential campaign of 1896-Condition of the

National banks in 1892 and 1896 compared-Gold holdings of the banks

-Increase of deposits and clearings - Per cent. of dividends paid by

failed banks-Use of checks and credit instruments-Branch banks

recommended - Issue of notes by the Government and the banks - Rev-

enues received from the National banks-Comptroller's report for 1898. 200-219

CHAPTER XIV.

REVIEW OF NATIONAL BANK LEGISLATION.

Secretary Chase's report of 1861-Drafting the National Currency Act-

Legal tender act - Debate on legal-tender bill-Tax bill-National Cur-

rency Act-Debate on Currency Act-Amendments-Criticism of sec-

tions - Opposition of State banks - Bill passes Senate-Secretary of the

Treasury on bond negotiations-Repeal of provision of law for funding

legal-tender notes into bonds - Currency bill in House - Debate in House

- Bill passes House and becomes a law-Defects of act of 1863-Comp-

troller McCulloch's report of 1863- President Lincoln on Currency Act. 220-234

CHAPTER XV.

CURRENCY Act of June 3, 1864.

Proposed amendments of the National Currency Act-Secretary Chase's

policy arraigned - Banks of $50,000 capital— Interest to be charged by

National banks - Provisions for redemption of notes -State taxation of

National banks - Proposed conversion of State banks - Deposits of Gov-

ernment funds in the banks - Withdrawal of State bank circulation-

Denunciation of National banks-State taxation amendment - Preju-

dice against National banks - Mr. Hooper's speech - Bill amended and

passed by the House - Senator Sherman's explanation of the measure —

Bank of Commerce, of New York city, exempted from double liability of

shareholders-Senator Sumner's views - Secretary Chase on State taxa-

tion-Market value of bonds as a basis of circulation -- Bill amended

and passed by both Houses-Signed by President.

CHAPTER XVI.

NATIONAL BANK LEGISLATION, 1864-1900.

With-

Act of March 3, 1865- Inequalities in the distribution of circulation

drawal of bonds by banks in liquidation - Certificates of deposit for legal-

tender notes-Trying to account for the panic of 1873 - Remedies pro-

posed - Veto of the inflation act-Repeal of law requiring reserve on

circulation - Proposed resumption of specie payments - The greenback

235-269

theory-Further retirement of legal tenders prohibited - Extension of

corporate existence - Lack of commercial redemption of notes - Indis-

position of Congress to enlarge the circulation privilege - Amendment

of the law in 1900.

CHAPTER XVII.

PORTRAITS AND SKETCHES OF NOTED FINANCIERS OF THE CIVIL

WAR PERIOD.

.

Salmon P. Chase, Lincoln's first Secretary of the Treasury-John Sherman,

author of the Resumption Act - Hugh McCulloch, the first Comptroller

of the Currency and twice Secretary of the Treasury — Elbridge G. Spauld-

ing, the "Father of the Greenbacks."

CHAPTER XVIII.

NATIONAL BANK STATISTICS, 1863 TO 1899.

Complete statement of resources and liabilities of all the National banks in

the United States, and number of banks in operation, for each year from

1863 to 1899.

PAGES

270-286

287-294

295-304

PART II.

BANKING UNDER STATE LAWS.

CHAPTER I.

STATE BANKS IN THE UNITED STATES.

Establishment of the first State banks - Difficulty of procuring statistics—

Condition of banks from 1811 to 1829- Banks of the United States and

State banks, 1811 to 1840-State banks from 1834 to 1898- Financial

heresies from 1811 to 1861- Various laws under which banks were organ-

ized-Losses through bank failures-States as bank stockholders-

Early proposal to tax State bank notes- Failures of State banks.

CHAPTER II.

NEW ENGLAND STATES.

305-328

MAINE.- First banks chartered - Methods of redeeming bills- Losses in

making collections- Maine admitted into the Union-State banking leg-

islation-Operations of the Suffolk system-Suspension of specie pay-

ments in 1837 and 1857- Conversion of State banks into National banks

-Statistics of State and National banks-Savings banks.
. 329-337

NEW HAMPSHIRE. - The New Hampshire Bank - Rival banks operating under
the same charter-State assumes supervision of the banks-Progress of
the banks from 1831 to 1843- Bank failures - Banking law declared to
be aristocratic-Private banking prohibited - Board of Bank Commis-

sioners established-State banks absorbed by National system - Statis-
tics of State and National banks-Savings banks, complete history of
the Savings bank system of the State, with statistics.

VERMONT.-Experience with counterfeit and depreciated paper - Opposition

to a State bank - Banks declared to be productive of gambling, and fatal

to any country where they exist - Bad bank bills from other States-

Vermont State bank-Launching a bank with $500 capital invested in

plates from which to print notes-Stringent laws for collecting debts-

Banks required to redeem in specie - Outline of provisions of bank char-

ters-Safety-fund system- Limitation of circulation -Free banking act

of 1851-Statistics of National and State banks -Savings banks and

trust companies.

MASSACHUSETTS.-Colonial bills issued and loaned to the people - Massa-

chusetts Bank chartered- Issue of notes of small denominations - Suc-

cessful resistance of the crisis of 1814-Forty-one years of banking his-

tory-Banking law of 1829-Financial convulsion of 1837 - Official ex-

amination instituted—A sound system of banks-Free banking law of

1851- The Suffolk banking plan of redemption-Comparison of redemp-

tions under Suffolk and National systems-Statistics of State and Na-

tional banks-Savings banks-Trust companies.

RHODE ISLAND. - Great banking power of a small State - Early banks—

Novel plan of issuing circulation - Penalties imposed on directors for

violation of banking laws - Statistics of State and National banks-Sav-

ings banks and trust companies.

CONNECTICUT.-Colonial bills-Bank notes supplant State currency-

Strength of the banks demonstrated in 1814-Public examination Con-

dition of the banks in 1836-Loans outside the State-Small bills pro-

hibited - Maintaining specie payments in 1839 - Post notes -

Suffolk sys-

tem--General expansion - Banking law of 1852-Panic of 1857-Loans

to the Government during the Civil War - Decline in bank earnings—

Statistics of National and State banks and trust companies-Savings

banks.

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--

PAGES

337-353

354-358

359-370

. 371-374

-

375-389

CHAPTER III.

EASTERN STATES.

NEW YORK.-The chartered banks - How Aaron Burr got a bank charter-
Bank of New York, The Manhattan Company, Bank of America and other
early banks-Safety-fund system of chartered banks-Free banking law
-Comparison of systems -- Why the safety fund was not a complete suc-
cess-Issue of notes on State securities - Imperfect methods of redemp-
tion - Revision and consolidation of the banking laws - Statistics of Na-
tional and State banks-New York Clearing-House Association - Sav-
ings banks-Trust companies - Historic New York city banks.
NEW JERSEY.-Oldest banks of the State-- A royal customer-Assistance
to the Government - First banking law -- Law of 1850-Organization of
banks-Statistics of National and State banks- Revision of the banking
laws in 1899- Savings banks-Trust companies.
PENNSYLVANIA.-Bills of credit issued by the Province and made a legal
tender - Bank of North America - Bank of Pennsylvania and other his-
toric institutions-Act of March 21, 1814-Condition of the banks in

.

.

390-429

430-441