nnot issue them at all. Is not this a clear indication of
the intent of the constitution to restrain the states, as well from
establishing a paper circulation as from interfering with the
metallic circulation? Banks have been created by states with no
capital whatever, their notes being put into circulation simply on
the credit of the state or the state law. What are the issues of
such banks but bills of credit issued by the state? I confess,
Mr. president, that the more I reflect on this subject, the more
clearly does my mind approach the conclusion that the creation of
state banks, for the purpose and with the power of circulating
paper, is not consistent with the grants and prohibitions of the
constitution."

I insisted that if there was no money in this country but United
States notes, the process of funding would be going on day by day.
Whenever there was too great an accumulation of these notes they
would be converted into bonds; the operation would go on quietly
and silently. I quoted the authority of Secretary Chase that it
was his deliberate judgment, after watching this process with all
his conceded ability, that but for the influence of this local bank
paper he would be able to carry on the war without the issue of
more paper money, that the currency then outstanding and that which
by law he was authorized to issue would be sufficient to carry it
on. Such a currency would lead to the conversion of the notes into
bonds, and by this process the people would absorb the national
loan and enable him to carry on the government without any sacrifice
to them.

It was not strange that Mr. Jefferson, near the close of the War
of 1812, stated more clearly than I could do the conflict between
local bank paper and United States notes. He, who during his whole
life was so mindful of the rights of the states, and so jealous of
paper money, in brief and terse language designated the only way
in which our country could carry on war. In his letter to Mr.
Cooper, dated September 10, 1814, just at the close of the war, he
said:

"The banks have discontinued themselves. We are now without any
medium, and necessity, as well as patriotism and confidence, will
make us all eager to receive treasury notes, if founded on specific
taxes.

"Congress may now borrow of the public, and without interest, all
the money they may want, to the amount of a competent circulation,
by merely issuing their own promissory notes of prop