States notes
with which to redeem their own notes. While the government had
been issuing its paper money some of the banks were inflating the
currency, by issuing paper money on the basis of United States
money. Illustrations of this inflation were given of existing
banks, showing enormous issues based upon a comparatively small
amount of legal tender notes. The issue of United States notes by
the government, and the making them a legal tender, was made the
basis of an inflated bank circulation in the country, and there
was no way to check this except by uniting the interest of the
government, the banks, and the people, together, by one uniform
common system.

I said that during war local banks were the natural enemies of a
national currency. They were in the War of 1812. Whenever specie
payment was suspended, the power to issue a bank note was the same
as the power to coin money. The power granted to the Bank of France
and the Bank of England to issue circulating notes was greatly
abused during the period of war. It was a power that ought never
to be exercised except by the government, and only when the state
was in danger. It was the power to coin money, because when a bank
issued its bill without the restraint of specie payments, it
substantially coined money and false money. This was a privilege
that no nation could safely surrender to individuals or banks.
Upon this point I cited a number of authorities, not only in our
own country, but in Europe. While I believed that no system of
paper money should depend upon banks, I was far from objecting to
their agency. They were useful and necessary mediums of exchange,
indispensable in all commercial countries. The only power they
derived from corporation not granted to all citizens was to issue
notes as money, and this power was not necessary to their business
or essential to their profit. Their business connected them with
the currency, and whether it should be gold or paper they were
deeply interested in its credit and value. Was it not then possible
to preserve to the government the exclusive right to issue paper
money, and yet not injuriously affect the local banks? This was
the object of that bill.

But, it was asked, why look at all to the interest of the banks,
why not directly issue the notes of the government, and thus save
to the people the interest on the debt represented by the notes in
circulation? The only answer to this was that history