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CHAPTER XI
THE NATIONAL BANK.
The financial exigencies of the nation in the Civil War
had shown the necessity for providing a suitable bank cur
rency, secured by Government obligations, in place of the
unsatisfactory State bank circulation, and, at the same time,
provide a market for the bonds which the Government was
obliged to issue to finance the war. During the darkest days
of that great conflict, the so-called National Banking Act was
passed, and on February 25, 1863, President Lincoln approved
the Act of Congress entitled “An Act to provide a National
Currency secured by a pledge of United States stock, and to
provide for the circulation and redemption thereof,” which
authorized the free formation of banks entitled to issue notes
to the amount of ninety per cent of the par value of the United
States bonds which each bank deposited with the Treasury
Department.
Such men as John P. Crozer, John 0. Deshong, Samuel
A. Crozer, and a few others looked with favor upon Secretary
Chase’s scheme for affording a stable currency to the nation;
but as yet no action had been taken by the Pennsylvania Leg
islature contemplating the merger of the chartered state banks
into those operating under the provisions of the Act of Con
gress. The subject had been discussed in the board, and the
opinions of the members were far from harmonious.
The president, Frederick J. Hinkson, strongly objected to
any contemplated action whereby the bank should cease to be
a State and become a National institution, citing the incident
of the United States Bank, and its ultimate downfall in the
Jackson administration, as a warning against such a step.
Gradually, however, the members were won over to the views