the redemption
of the bills which the bank puts in circulation. The United-States
Bank circulated its bills according to its own discretion, and
there was no assurance to the holder against an over-issue and no
certainty of ultimate redemption. The National Bank can issue no
bills except those furnished by the Treasury Department in exchange
for the bonds deposited to secure prompt redemption. In the former
case there was no protection to the people who trusted the bank by
taking its bills. In the case of the National Bank, the government
holds the security in its own hands and protects the public from
the possibility of loss.

The one defective element in the National bank system is that it
requires the permanence of National debt as the basis of its
existence. In a Republican government the people naturally oppose
a perpetual debt, and could with difficulty be persuaded to consent
to it for any incidental purpose however desirable. But so long
as a National debt exists no use has been found for it more conducive
to the general prosperity than making it the basis of a banking
system in which flexibility and safety are combined to a degree
never before enjoyed in this country and never excelled in any
other. In no other system of banking have the bills had such wide
circulation and such absolute credit. They are not limited to the
United States. They are current in almost every part of the American
continent, and are readily exchangeable for coin in all the marts
of Europe.

CHAPTER XXIII.

Depression among the People in 1863.--Military Situation.--Hostility
to the Administration.--Determination to break it down.--Vallandigham's
Disloyal Speech.--Two Rebellions threatened.--General Burnside
takes Command of the Department of the Ohio.--Arrests Vallandigham.
--Tries him by Military Commission.--His Sentence commuted by Mr.
Lincoln.--Habeas Corpus refused.--Democratic Party protests.--
Meeting in Albany.--Letter of Governor Seymour.--Ohio Democrats
send a Committee to Washington.--Mr. Lincoln's Replies to Albany
Meeting and to the Ohio Committee.--Effect of his Words upon the
Country.--Army of the Potomac.--General Hooker's Defeat at
Chancellorsville.--Gloom in the Country.--The President's Letters
to General Hooker.--General Meade succeeds Hooker in Command of
the Army.--Battle of Gettysburg.--Important Victory for the Union.
--Relief to the Country.--General Grant's Victory at Vicksburg.--
Fourth of Jul