SENATE DISCUSSES THE BANKING SYSTEM.
The bill to carry out these suggestions was introduced in the Senate on the 26th of January, 1863, by Mr. Sherman, and was reported from the Finance Committee on the 2d of February. On the 9th the Senate took it up for consideration. Mr. Sherman advocated the proposed system in an elaborate argument on several distinct grounds: "The banks would furnish a market for United-States bonds; they would absorb the circulation of the State banks gradually and without harsh measures; they would create a community of interest between the stockholders of the banks, the people, and the government, where now there existed a great contrariety of opinion and a great diversity of interests; adequate safeguards would be established against counterfeiting; the currency proposed would be uniform and would take the place of the notes of sixteen hundred banks, differing in style, and so easily imitated and altered that while notes of one-sixth of the existing banks had been counterfeited, 1,861 kinds of imitations were afloat, and 3,039 alterations, in addition to 1,685 spurious notes, in which hardly any care had been taken to show any resemblance to the genuine." The national banks would be depositories of public moneys and their notes would be receivable for taxes. He concluded by declaring that "we cannot maintain our nationality unless we establish a sound and stable financial system, and as the basis of it we must have a uniform national currency." Accordingly he deemed the passage of the pending bill "more important than any other measure now pending either in Senate or House."
—Mr. Henderson of Missouri sought to limit the system to banks with a capital not less then $300,000, and thought "it would be infinitely better that all the banks should be established in New York, Philadelphia, Boston, Cincinnati, St. Louis, and such cities as those." He said "they had had some experience in the West with banking laws which permitted the organization of banks in out-of- the-way places, obscure villages, and unknown cross-roads."
—Mr. Powell of Kentucky, who was most persistent in his advocacy of a currency based on gold and silver coin, moved to "strike from the bill the words which prevented the acceptance of the National bank notes for duties on imports." These duties were payable in coin in order to secure gold with which to pay the interest on the public debt. In supporting his amendment, Senator Powell said that if the bill became a law the fact that they could not be received for customs would tend to depreciate the notes, and he wanted the credit of the paper money kept up if the country was to have no other. His motion was defeated.
—Mr. Ira Harris of New York secured the adoption of three sections, to be added at the end of the bill, which would enable State banks to accept its provisions and become National institutions more readily and more easily. He said that he was not opposed to a fair trial of the new system, but he doubted very much whether the banks of New York could be induced to abandon their State charters. "The banking system of New York was the best in the world. The banks enjoyed privileges which they could not be induced to surrender and the people would be reluctant to trust any others."
—Mr. John Carlile of West Virginia voted against all amendment because he wanted the bill to kill itself, which would happen if it were not improved. He voted against Senator Henderson's amendment to limit charters to banks with $300,000 capital. If the bill passed as it came from the Finance Committee there "will be banks established at every cross-road in the country. The State banks will be destroyed, and widows and orphans whose all is invested in the stock of these institutions will be impoverished."
—Mr. Clark of New Hampshire thought the proposed system might be improved by providing "that there shall be a visitation on the part of the States." He thought it would give confidence to the banks if the States "had the right to know how they stood."
—Mr. Pomeroy of Kansas thought the right to organize with a capital as low as $50,000 was a good provision and would "tend to popularize and extend the National banks throughout the country."
SENATE DISCUSSES THE BANKING SYSTEM.
—Mr. Howard of Michigan opposed the bill because he thought its effect would be to "wage a very unnecessary and dangerous war upon the State institutions," and also because he deplored "the contest which will probably arise out of it in our local politics."