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Bulloch History with Roger Allen: America (finally) fixes on, adopts national banking system
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Roger Allen - photo by Special

    Note: The following is part of a series of columns looking at the establishment and evolution of the banking system in Georgia and Bulloch County.

    By 1854, "Van Courts Counterfeit Detector and Bank Note List" declared that 13 of Georgia's 21 banks had failed. Except for one Savannah bank, they were all small "up country" banks used by speculators.
    The first of these was the Bank of Macon, which had been purchased by New York "interests." After one of its bank officers was shot and killed for refusing to turn over the bank's books, the Grand Jury set his killer free.
    In 1861, Bankers Magazine reported 15 of 33 private Georgia banks were now owned by the New York City "Bank of the Republic." This bank was owned largely by none other than Georgia tycoon Gazaway Bugg Lamar.

The Bank of the Confederate States (that wasn't)
    In April 1861, William Murdoch (a Scottish stonemason) suggested to Confederate President Jeff Davis that the Confederacy create a new Confederate Bank modeled after the Bank of England.
    Murdoch's plan was based on each of the seven Confederate states depositing $1 million dollars in bonds and the public adding another $7 million dollars, to create this new Confederate Bank.
    Nothing ever came of his idea. South Carolinian Langdon Cheves, former president of the Second National Bank of the U.S., led the fight against forming any such Confederate Bank.

The Union's National Bank Acts of 1863, 1864 and 1865
    In January 1862 the Chicago Tribune asked, "What power shall put the curb on … the makers of paper money in the States of the Union?"
    The Chicago Tribune later explained that 1,395 Union banks printed 8,370 varieties of bank notes, with differently engravings and in a wide array of denominations.
    Secretary of the Treasury Salmon P. Chase proposed that "notes prepared for circulation under national direction ... be secured as to prompt convertibility into coin by the pledge of United States bonds."
    Europeans were fed up. In 1863, the London Times accused "different States (of treating) their bank notes (as) so many foreign nations each refusing the paper of the other."
    They stated incredulously that the Americans' "Federal Government refused all paper monies of any kind. Its import duties were taken only in gold."
    Thus, the Congress passed the National Bank Act of 1863. Now, new federal "greenbacks" were accepted almost everywhere because they were backed by the government's reserves.
    The second Bank Act of 1864 corrected several problems caused by the Act of 1863. Finally, on March 3, 1865, the third Banking Act created a totally new national-bank-only system.
    By 1868, 598 state banks had closed, 879 had reopened as national banks, and 752 new banks had been established. By the end of 1872, there were 11 national banks in Georgia.
   
    Roger Allen is a local lover of history. Allen provides a brief look each week at the area's past. Email Roger at rwasr1953@gmail.com.

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