In his finance report of 1861, Secretary Chase first stated the advantages to be derived from "the preparation and delivery to institutions and associations of notes prepared for circulation under national direction and secured as to prompt convertibility into coin by the pledge of United States bonds." The advantages claimed were:
1. Uniformity In Currency.
2. Uniformity In Security.
3. Effectual safeguard, if effectual safeguard is possible, against depreciation.
4. Protection From Losses On Discounts And Exchanges.
5. A Large Demand For Government Securities.
6. Increased Facilities For Obtaining War Loans.
7. Some alleviation of the burdens on industry, through a diminution of the rate of interest or a participation in the profit of circulation without risking the peril of a great money monopoly.
8. Increased security to the Union, springing from the common interest in its preservation, created by the distribution of its stocks to associations throughout the country as the basis of circulation.
9. Easy and desirable method of accomplishment through voluntary action of existing institutions.
In 1862 Chase drew attention to the further advantage that the note-issuing banks would provide the government with safe and convenient agencies for the deposit of government moneys. His two fundamental motives were: to create a safe uniform currency, and to secure a market for government bonds. He opposed making the greenbacks legal tender and objected to their issue, suggesting as an alternative the issue of bond-secured bank notes. The plan necessitated the nationalization of the banks, a step which the banks strongly opposed in Congress on the grounds that: (1) nationalization would force the state bonds already deposited against circulation on the market in competition with United States bonds; (2) the total note circulation was but $200,000,000, and the market created for bonds would therefore be negligible; (3) nationalization would take place slowly and the government would secure no considerable relief for two or three years.