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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