Page:A History of Banking in the United States.djvu/484



PERIOD VI.— FROM 1863.

CHAPTER XVII.

N his annual report for 1861, Secretary Chase discussed an issue of government treasury notes to serve as currency, but rejected that plan on account of its "possible disasters." He then turned to a scheme whose principal features he described as "first a circulation of notes bearing a common impression, and authenticated by common authority; second, the redemption of these notes by the associations and institutions to which they may be delivered for issue; and third, the security of that redemption by the pledge of United States stocks and an adequate provision of specie." He adopted the computation of the bank circulation at $202 millions, of which $150 millions was within the federal lines. "The whole of this circulation constitutes a loan without interest from the people to the banks, costing them nothing except the expense of issue and redemption, and the interest on the specie kept on hand for the latter purpose; and it deserves consideration whether sound policy does not require that the advantages of this loan be transferred in part at least from the banks, representing only the interests of the stockholders to the government, representing the aggregate interests of the whole people."

The President, in a message of January 17, 1863, expressed his anxiety about the increasing depreciation, and suggested a taxation of bank circulation to prevent it, and also proposed to make the banks bear their just share of public burdens; but the point of the communication was that a uniform currency was necessary for public credit and for contracting loans. "Such a currency can be furnished by bank associations organized under a general act of Congress, as suggested in my message at the beginning of the present session. The securing of this circulation by the pledge of United States