In central New York the mania seemed, early in the summer, to take strong hold. In Syracuse John Wieting, an amazingly fluent speaker with much popular humor, who had never before shown any interest in politics, took the stump for an unlimited issue of government paper currency, received the nomination to Congress from the Democrats and sundry independent organizations, and for a time seemed to carry everything before him. Asimilar state of things prevailed at Ithaca and the region round about Cayuga Lake. Two or three people much respected in the community came out for this doctrine, and, having a press under their control, their influence seemed likely to be serious. Managers of the Republican organization in the State seemed at first apathetic; but at last they became alarmed and sent two speakers through these disaffected districts--only two, but each, in his way, a master. The first of them, in order of time, was Senator Roscoe Conkling, and he took as his subject the National Banking System. This had been for a considerable time one of the objects of special attack by uneasy and unsuccessful people throughout the entire country. As a matter of fact, the national banking system, created during the Civil War by Secretary Chase and his advisers, was one of the most admirable expedients ever devised in any country.
Up to the time of its establishment the whole country had suffered enormously from the wretched currency supplied from the State banks. Even in those States where the greatest precaution was taken to insure its redemption all of it was, in time of crisis or panic, fluctuating and much of it worthless. But in other States the case was even worse. I can recall perfectly that through my boyhood and young manhood every merchant and shopkeeper kept on his table what was called a ``bank-note detector,''
which, when any money was tendered him, he was obliged to consult in order to know, first, whether the bill was a counterfeit, as it frequently was; secondly, whether it was on a solvent bank; and thirdly, if good, what discount should be deducted from the face of it. Under this system bank-notes varied in value from week to week, and even from day to day, with the result that all buying and selling became a sort of gambling.
When, then, Mr. Chase established the new system of national banks so based that every bill-holder had security for the entire amount which his note represented, so controlled that a bill issued from any little bank in the remotest State, or even in the remotest corner of a Territory, was equal to one issued by the richest bank in Wall Street, so engraved that counterfeiting was practically impossible, there was an immense gain to every man, woman, and child in the country.
To appreciate this gain one must have had experience of the older system. I remember well the panic of 1857, which arose while I was traveling in eastern and northern New England, and that, arriving in the city of Salem, Massachusetts, having tendered, in payment of my hotel bill, notes issued by a leading New York city bank, guaranteed under what was known as the ``Safety Fund System,'' they were refused. The result was that I had to leave my wife at the hotel, go to Boston, and there manage to get Massachusetts money.
But this was far short of the worst. Professor Roberts of Cornell University once told me that, having in those days collected a considerable debt in one of the Western States, he found the currency so worthless that he attempted to secure New York funds, but that the rate of exchange was so enormous that, as the only way of saving anything, he bought a large quantity of cheap clothing, shipped it to the East, and sold it for what it would bring.
As to the way in which the older banking operations were carried on in some of the Western States, Governor Felch of Michigan once gave me some of his experiences as a bank examiner, and one of them especially amused me. He said that he and a brother examiner made an excursion through the State in a sleigh with a pair of good horses in order to inspect the various banks established in remote villages and hamlets which had the power of issuing currency based upon the specie contained in their vaults. After visiting a few of these, and finding that each had the amount of specie required by law, the examiners began to note a curious similarity between the specie packages in these different banks, and before long their attention was drawn to another curious fact, which was that wherever they went they were preceded by a sleigh drawn by especially fleet horses. On making a careful examination, they found that this sleigh bore from bank to bank a number of kegs of specie sufficient to enable each bank in its turn to show the examiners a temporary basis in hard money for its output of paper.
Such was the state of things which the national banks remedied, and the system had the additional advantage of being elastic, so that any little community which needed currency had only to combine its surplus capital and establish a bank of issue.
But throughout the country there were, as there will doubtless always be, a considerable number of men who, not being able to succeed themselves, distrusted and disliked the successful. There was also a plentiful supply of demagogues skilful in appealing to the prejudices of the ignorant, envious, or perverse, and as a result came a cry against the national banks.
