oncealing some facts, misstating others, and creating thereby the
impression that they were endeavoring to win the favor of the banking
institutions. Added to this were the efforts of those controlling the
national bank in the great money centres to secure a permanency of the
note-issuing feature of their system, after a very general public
sentiment against it had been aroused, and even after its evil effects
had been felt by smaller banks located among, and supported more
directly by, the producing classes. But now, when the discussion is
removed from the arena of politics, when the volume of the bank-note
system is rapidly disappearing, and when many of the best and
strongest banks are seeking to be relieved from the burden of
note-issuance, it is opportune to discuss calmly and without prejudice
the wisdom of the original acts and their effects upon the country.

It has been claimed that by the organization of the national banks
the government was enabled to dispose of its bonds and aided in
carrying on the war. Do the facts warrant the claim? All national bank
notes have been redeemable solely in Treasury notes. They do not
possess the legal-tender qualification equal to the Treasury note, and
cannot therefore be considered any better than the currency in which
they are alone redeemable, and in comparison with which they have less
uses. These are truths that were just as palpable twenty-five years
ago as to-day. It follows that the issue of the bank notes did not
furnish any better form of currency than that which came directly from
the government to the people. Every dollar of such notes issued
contributed just as much towards an inflation of the currency as the
issue of an equal amount of Treasury notes. With these facts in mind,
a review of the organization of the banks and their issue of notes
will reveal the effect of such acts.

In 1864 the notes of the government had been depreciated to such an
extent that coin was quoted at a premium ranging from 80 per cent to
150 per cent. The record of a single bank organized and issuing notes
under such circumstances is illustrative of the whole system.

Take a bank with one hundred thousand dollars to invest in government
bonds as a basis for its issuance of currency. The bonds were bought
with the depreciated Treasury notes. Deposited with the Comptroller of
the Currency at Washington, the bank received ninety thousand dollars
of notes to issue as money. It also rec