Evening Star Newspaper, December 22, 1929, Page 120

CSZE3 NIoN Ay, 2 Good ‘gDt s VATE X CREDIT COINS OF THE CIVIL WAR. uRlNG THE CIVIL WAR THE PUBLIC HOARDED | s 5 //‘"”;’ ILVER COINS UNTIL THERE WAS HARDLY ANY “SMALL CHANGE " e IN CIRCULATION . THE FEDERAL GOVERNMENT IN 1862 1SSUED PAPER NOTES FOR. 2 FRACTIONS OF A DOLLAR . THESE SMALL BILLS WERE POPULARLY KNOWN AS'SHINPLASTERS. @ENN!ES MINTED BY STATES SHORTLY AFTER THE REVOLUTIONARY WAR .— © HIGH LIGHTS OF HISTORY -~ History of Banking in America, rarrz = By J. CARROLL MANSFIELD' .'-IE WAR OF 1812, HAVING LEFT AMER- ICAN FINANCES IN A SORRY STATE, PRESI+ DENT MADISON RECOMMENDEDTHE RE -~ ESTABLISHMENTOF A NATIONAL BANK,AND INIBI6THE 2N BANKOF THE UNITED STATES WAS CHARTERED. THE BANK WAS UN- POPULAR BECAUSE 'T WAS OWNED 8Y A SMALL GROUPOFRICH MEN, ANDREW JACKSON, ELECTED BY THE FOES OF THE BANK, CARRIED ON A'WAR"AGANST IT WITH TNE RESULT THAT (N 1836 CONGRESS WOULD NOT RENEW ITS CHARTER , —* JACKSON CAUSED THE PUBLIC FUNDS T0 BE DEPOSITED IN SELECTED STATE BANKS, WHICH HIS OPPONENTS DUBBED "PETBANKS, IN 1806 THERE MAD BEEN BUT 68 BANKS IN THE ENTIRE COUNTRY, BUT WITH THE BEGINNING OF WESTWARD EXPANSION A HOST OF STATE AND> PRIVATE RANKS SPRANG UP, ——o — | [l EARLY AMERICAN BANKING WAS THAT ONE BANK WOULD NOT REDEEM THE NOTES OF ANOTHER AT FULL VALUE. THE SUFFOLW BANK OF BOSTON TOOK THE ) -NE DAILY REPORTS TO THE CLEAR- ING HOUSE DISCLOSED A BANKS TRUE CONDITION. BECAUSE OF THIS BANKERS BECAME MORE CAREFUL AND SOUNDER BANKING CONDITIONS RESULTED, BEFORE LONG CLEARING HOUSES MAD BEEN ESTABLISHED IN ALL LARGE CITIES. ° B+ acreep 1o REpEEM ATPAR THE .m-n FEW. LAWS TO RESTRICT THEM, MOST OF THE NEW BANKS WERE LINSOUND AND'SOME FRAUDULENT, AN OVERISSUE OF (3 NOTES OF ANY BANK THAT WOULD KEEP A SPEQAL REDEMPTION FUND> ON DEPOSIT "IN TNE SUFPOLK .BANKS CO-OPERATING WTHR TN!SELAN FOUNP THEIR CREDIT GREAYLY INCREASED AND THEIR NOTES ACCEPTED AT FULL VALUE EVERYWHERE. asSN . \\.‘~. BANKS PROVED UNEQUAL TO THE EMERG- ENCY, AND IN 1863 CONGRESS ADOPTED THE NATIONAL BANK SYSTEM, LocAL BANKS OBTAINED NATIONAL CHARTERS ISSUED NOYES SECURED BY GOVERN~ MENT BONDS AND CONDUCTE]D BUSINESS UNDER GOVERNMENT SUPERVISION.—* .PeaAcuLAr-z BOOMS WERE FOLLOWED | BY DISASTROUS FINANCIAL PANICS IN'S ' | | WHICH HUNDREDS OF BANKS WERE SWEPT AWAY, A NUMBER OF THE " PET BANKS "FAILED AND #9,000,000 1IN PUBLIC FUNDS WERE LOST IN THE CRASH. BANKING PROGRESS WAS MARKED IN 1853 WHEN THE FIRST CLEARING MOUSE WAS ESTABLISHED IN NEW YORIC CITY. BEFORE THAT TIME A BANK HAD BEEN OBLIGED TO SEND'RUNNERS’ DALY TO ALL THE OTHER BANKS,TO BALANCE ITS ACCOUNTS WITH THEM, ————— o NATION A SOUND AND UNIFORMW CURRENCY. TOMEET THE NEED FOR A MORE ELASTIC CURRENCY AND AN IMPROVED EXCHANGE SYSTEM THE FEDERAL RESERVE SYSTEM WAS ADOPTED IN IN3. TWELVE GREAT DISTRICTY FEDERAL RESERVE BANKS WERE ESTABLISHE, .o PROTECT THE GOVERMNMENTS MONEY PRESIDENT VAN BUREN IN I840 SECURED | THE PASSAGE OF THE INDEPENDENT TREAS- URY(5UB-TREASURY ) ACT WHICH PROVIDED THAT FEDERAL FUNDS SHOULD BE RE- CEWED AND KEPT IN GOVERNMENT VAUD BOW A BANK COULD DEAL WITH ALL THE OTHERS THROUGH T™HE ONE CENTRAL CLEARING HOUSE WIS MEANT A GREAT SAVING OF TIME ,MEMBER. BANKS CAME TO USE CLEARING HOUSE CREDIT CERTIFICATES IN PLACE OF DAILY SHIPMENTS OF MONEY IN MAKING SETTLEMENTS AMONG THEMSELVES. D ] 2}' HE—SE BANKS HOLD THE RESERVES OF ALL NATIONAL BANKSAND SUCH STATE BANKS IN THEIR DISTRICTS AS WISH TO JON THE SYSTEM, SERVE AS CLEAR- ING HOUSES FOR MEMBER BANKS AND ISSUE "RESERVE NOTES THAT ARE USED ALL OVER THE WORLD. e NEXT WEEK: THE ROMANCE OF THE MAILS. —