of hope to brighten the darkness of the war cloud. To some
among the metropolitan bankers who in after years prated so loudly of
their patriotism and financial sagacity, it brought to view only
the danger of curtailed profits. The government Treasury was empty;
troops in the field were unpaid and uncomplaining; merchants
furnishing supplies, seriously embarrassed for the lack of money in
the channels of trade. The sixty millions of demand notes were
absorbed by the nation's commerce like a summer storm on parched
soil. Under such circumstances, at the urgent request of the
Secretary of the Treasury, the Ways and Means Committee of the House
of Representatives framed a bill authorizing the issue of one
hundred and fifty millions of bonds, and the same amount of Treasury
notes, the latter to be a full legal tender, and fundable in an
interest-bearing bond at the option of the holder. The contest between
the popular branch of the government and the Senate, upon this
measure, forms one of the most interesting and instructive lessons
of the financial legislation of the nation. In the Senate, a
bitter and determined opposition to the legal-tender clause was
developed. The associated banks of New York had adopted a resolution
that the Treasury notes of the government should only be received
by the different banks from their customers as "a special deposit to
be paid in kind;" and it was one of the lessons of the war, that
notices containing the announcement above quoted remained posted in
the New York banks until a high premium on those very notes, over
the dishonored greenbacks, caused a shrewd depositor to demand of
the bank his deposits in kind. The demand was settled by a delivery
of greenbacks, which were a full legal tender for the purpose, and
the notices suddenly disappeared. The compromise effected between
the two Houses resulted in the issue of the emasculated greenback,
and it also led the way to the establishment of the National Banking
system, and the issue of the promissory notes of the banks to be
used as money.

Much of the force of all criticism of the system so devised has been
weakened by the fact that the attack has been aimed at the banks
themselves, and not against one special feature of the system. In
explanation, though not in excuse for this, should be stated the fact
that every issue of the annual finance report of the government
contained the special pleadings of the comptrollers of the currency,
c