, abandon great principles, which are as
unchangeable as the laws developed by the physical sciences. When Mr.
Chase, in his first annual Treasury Report of the 9th of December, 1861,
recommended his system of United States banks, organized by Congress
throughout the country, furnishing a circulation based upon private
means and credit, but secured also by an adequate amount of Federal
stock, held by the Government as security for its redemption, it was
very unpopular, and encountered most violent opposition. The State
banks, and all the great interests connected with them, were arrayed
against the proposed system. When we reflect that many of these banks
(especially in the great State of New York) were based on State stocks,
and in many States that the banks yielded large revenues to the local
Government;--when we see, by our Census Tables of 1860 (p. 193), that
these banks numbered 1642, with a capital paid up of $421,890,095, loans
$691,495,580, and a circulation and deposits, including specie, of
$544,469,134,--we may realize in part the tremendous power arrayed
against the Secretary. This opposition was so formidable, that neither
in the public press nor in Congress did this recommendation of Mr. Chase
receive any considerable support. Speaking of the _currency_ issued by
the State banks, and of the substitute proposed by Mr. Chase, he
presented the following views in his first annual Report before referred
to, of December, 1861:--

'The whole of this circulation constitutes a loan without interest
from the people to the banks, costing them nothing except the
expense of issue and redemption and the interest on the specie kept
on hand for the latter purpose; and it deserves consideration
whether sound policy does not require that the advantages of this
loan be transferred in part at least, from the banks, representing
only the interests of the stockholders, to the Government,
representing the aggregate interests of the whole people.

'It has been well questioned by the most eminent statesmen whether
a currency of bank notes, issued by local institutions under State
laws, is not, in fact, prohibited by the national Constitution.
Such emissions certainly fall within the spirit, if not within the
letter, of the constitutional prohibition of the emission of bills
of credit by the States, and of the making by them of anything
except gold and silv