What little measure of success I may have attained in the bureau with which I have been connected so long, I owe wholly to a faithful and conscientious discharge, to the best of my ability, of such duties as were assigned to me from time to time in the various positions which I held, and to an appreciation of my services by all of the official superiors under whom I have had the honor to serve, and whose confidence and esteem, I am proud to say, I possessed to the fullest extent during their respective terms of office and since their retirement from the service, with a single exception.

It has been my privilege and my pleasure to know personally every Comptroller of the Currency from Hugh McCulloch, who organized the bureau in 1863, and was its first Comptroller, down to the present Comptroller, Mr. Crissinger, with the exception of Freeman Clarke and Hiland R. Hulburd, the second and third Comptrollers, and to have served five of them in the confidential capacity of secretary. These five were William L. Trenholm, Edward S. Lacey, A. Barton Hepburn, James H. Eckels and Charles G. Dawes-two Democrats and three Republicans. Upon the recommendation of Mr. Dawes, I was appointed Deputy Comptroller on June 29, 1899, to succeed Lawrence O. Murray.

When Mr. Murray resigned as Deputy Comptroller, Mr. Dawes, who was then Comptroller, was absent in the West. Some of the chiefs of division and others connected with the Comptroller's office were applicants for the place, and requested me to recommend them to Mr. Dawes for appointment to the vacancy. I wrote to Mr. Dawes at Chicago, advising him of Mr. Murray's resignation, who were applicants for the vacancy, and what I knew of their relative merits and qualifications. The only reply I received from him was a request to ask Mr. Murray not to make public his resignation until he returned to Washington. The morning following Mr. Dawes' return I met one of the applicants in the corridor of the Treasury Department, who had spent the evening before at Mr. Dawes' house and inquired of him who was to be the new deputy. He replied that while he knew, he was not at liberty to say, but that I would learn as soon as Mr. Dawes came to the office. When Mr. Dawes arrived at the office he said to me on entering the room: "Get me a stenographer, I want to

dictate a letter to the Secretary of the Treasury." As I had always done his stenographic correspondence I thought the request unusual, but sent for one of the office stenographers. Mr. Dawes commenced his letter to the Secretary by informing him of the resignation of Mr. Murray and concluded by recommending me for the vacancy. I was completely surprised when I heard my name mentioned, and told Mr. Dawes that I was not an applicant for the place and had not thought of myself in connection with it. He replied that that was one of the reasons why he had recommended me, and the other was that he believed me to be better qualified for the place than any one of those who had applied for it.

This brief narrative of how I became connected with the Bureau of the Currency and my subsequent advancement grade by grade to the second position in rank in the bureau, many times and for long periods acting as its head, is not presented in any spirit of egotism, but simply as an introduction to what follows in the line of reminiscences of the bureau and a discussion of the principal events of each administration since the establishment of the national banking system, viewed at short range from the vantage ground of the opportunities afforded by thirty-six years' connection with the Comptroller's office, a close association with nine Comptrollers, and a personal acquaintance with all of the Comptrollers but two since the Currency Bureau was established.

WASHINGTON, OCTOBER, 1922.

THOMAS P. KANE.

I'

CHAPTER I

The National Bank Act and Its Origin

T never has been definitely determined who is entitled to the most credit for having originated the National Bank Act. Like all important instruments of this character, it is conceded to be the product of several minds. It was originally a war measure, and grew out of the urgent necessities of the Government to replenish the public treasury by creating a market for its bonds through the inducement offered banks to obtain circulation based upon the security of such bonds. The paramount purpose of the Act was to secure a uniform national banking system of currency, without the creation of a great central institution like the old United States Bank. Opposition to such an institution was widespread and deep-seated and the sponsors of the various plans which took final shape in the National Banking Act were careful to point out that the objections to the United States Bank had been duly considered and had been avoided by them.

In August, 1861, O. B. Potter of New York submitted to the Secretary of the Treasury a scheme to permit state banks and bankers to issue notes secured by United States bonds. He said that none of the objections urged against a United States bank could lie against the plan proposed. It would give to the Government no power to bestow favors and would not place a dollar in the Government's hands to lend. It was impossible, therefore, it was claimed, to see how such a system could be made use of for political ends.

Samuel Hooper, a member of the House of Representatives from Massachusetts, who was an active agent in the attainment of the end sought, said in support of one of the early measures proposed, which did not become a law, that it

secured all the benefits of the old United States Bank
without many of those objectionable features which aroused
opposition. It was affirmed that, by its favors, the govern-

ment enabled that bank to monopolize the business of the
country. Here no such system of favoritism exists * * *
It was affirmed that frequently great inconvenience and
sometimes terrible disaster resulted to the trade and com-
merce of different localities by the mother bank of the
United States arbitrarily interfering with the management
of the branches by reducing suddenly their loans and some-
times withdrawing large amounts of their specie, for poli-
tical effect. Here each bank transacts its own business
upon its own capital, and is subject to no demands except
those of its own customers and its own business. It will
be as if the bank of the United States had been divided into
many parts, and each part endowed with the life, motion,
and similitude of the whole, revolving in its own orbit,
managed by its own board of directors, attending to the
business interests of its own locality; and yet to the bills of
each will be given as wide a circulation and as fixed a
value as were given to those of the Bank of the United
States in its palmiest days.

In the National Banking Act as passed in 1863 it was believed that the desired result had been obtained.

As far back as the days of Alexander Hamilton and Albert Gallatin, the question of creating a uniform state bank currency was frequently discussed, but none of the plans of the distinguished financiers of those days seemed to contemplate governmental assumption of responsibility for the redemption of such note issues.

Secretary Dallas in 1813 advocated a uniform state bank circulation with governmental supervision of the banks, and many of the features of his plan were similar to those contained in the National Bank Acts of 1863 and 1864.

In 1837, the State of Michigan adopted a banking law which required the banks to deposit with the State Government bonds and mortgages as security for their circulating notes, but this law was subsequently declared by the State courts to be unconstitutional.

The Free Banking Law adopted by the State of New York in 1838 was also analogous to the national banking laws, and many of the provisions of the latter were taken therefrom. There was