Excerpt from The Establishment of the National Banking System: A Dissertation Submitted to the Faculty of the Graduate School of Arts and Literature for the Degree of Doctor of Philosophy

§1. The national banking system was established in the United States in 1863. Contrary to popular belief, it was not an entirely new venture in the field of banking. If one keeps in mind that uniformity and stability of currency were the great ends sought by its founders, one must confess that these features of a sound bank-note circulation had long been Sought after in many Of the individual states. Both Mr. Chase, who was Secretary of the Treasury when the national system was established. And Senator Sherman, who made the chief speech in the Senate in behalf of the bill, pointed out that the national banks would not be entirely in the nature of an experiment.1 Indeed, Senator Sherman asserted that the bill ought to aecom plish only what all the statesmen of the country had attempted up 'to that time.2 This was, however, not strictly true. As is well known, some had been altogether opposed to anything re sembling a national bank, or a national banking system. Sher man came nearer the truth when he declared that every party that had been organized in this country from the foundation of the government to the present day had, at some period of its history, sought to accomplish the object of a uniform cur rency.3 The reader will recall that the Federalists, under the lead of Hamilton, had brought about some semblance of order in the currency, by the creation Of the United States Bank. For twenty years this gave the country a somewhat stable cur reney. Following the expiration of the charter Of this bank there was a period of four or five years of local bank issues, a time of great confusion and disorder. Then followed the establishment of the Second United States Bank, by the Re.

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