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 partly because it was obvious that "wild cat" banking, as it was aptly called, was not only discreditable but also potentially disastrous to the commercial and business interests of the nation. Accordingly there was devised and enacted a scheme for the organization of a system of national banks, chartered and supervised by the Federal government, the notes of which, used as currency, would be guaranteed by government bonds purchased by the banks and deposited by them with the Federal government as security. The act of February 25, 1863, with some subsequent amendments, was the beginning of the national bank system which has ever since prevailed and of which the London Times, not always a friendly critic of things American, said that "the genius of man has never invented a better system of finance." The creation of the national bank system was of great service to the government during the war inasmuch as it assured a certain market for the government bonds which were then issued. The national banks which were organized had to buy them as security for their notes. But in addition to that it rendered the people the inestimable service of providing them with a convenient banknote currency of stable and uniform value. It was not necessary to examine a bill to see what bank had issued it and then to look up its current value in the market reports. A dollar bill of any national bank was worth a hundred cents at any time and at any place. The bank that issued it might fail but the note would still be good for its face value.

The National Bank act became law in 1863. In 1864 there were 508 such banks; in 1865, 1,513; in 1875, 2,088; in 1885, 2,714; in 1895, 3,712; in 1905, 5,757; and in 1915, 7,560.