"The Bank of Massachusetts at Boston was the first bank organized in the New England States.

"During the latter portion of the year 1783 a movement was made in the town of Boston, Mass., to obtain subscriptions for the Capital Stock of a Bank, under the following preamble :

" 'Taught by the experience of many nations, that well-regulated Banks are highly useful to society, as they promote punctuality in the performance of contracts, increase the medium of trade-facilitate the payment of taxes,-prevent the exportation of and furnish a safe deposit for cash; and in the way of discount, render easy and expeditious the anticipation of funds at the expense only of common interest; whilst by the same means they advance the interest of the proprietors : We the subscribers, desirous of promoting such an institution, do hereby engage to take the number of shares set against our respective names, in a bank to be established in the town of Boston.'

"Under the foregoing preamble the requisite number of subscribers were readily obtained, and at the Session of the Legislature of Massachusetts, which opened on the first Wednesday in January, 1784, a petition was presented for a Bank Charter, by a committee of the subscribers for stock, consisting of William Phillips, Isaac Smith, Jonathan Mason, Thomas Russell, John Lowell and Stephen Higgin-son, Esquires.

"Upon their application, and after due deliberation, a bill was enacted tinder the name of the President and Directors of the Massachusetts Bank, with a capital not to exceed five hundred thousand pounds, which bill was passed on the 7th day of February, 1784. This bank commenced business July 5th, 1784, with a capital of $300,000, at which time it opened an account with the Bank of North America, Philadelphia, and the Bank of New York, and these are continued with the Massachusetts bank to the present time. In 1865 this bank was organized under the National Bank Act, and its present capital is $800,000."

The necessity for placing the currency on a sound basis and restoring confidence in the credit of the Government led to the attention of Congress being directed to these matters, and pursuant to a resolution of that body of the 9th of August, 1790, the Secretary of the Treasury prepared a report in which he recommended the establishment of a National Bank. That report was referred to a committee, a charter was granted, and the capital was to consist of ten millions of dollars in 25,000 shares of 400 dollars each. The French revolution broke out about the time this bank commenced business, but a considerable degree of success seems to have marked its progress. Mr. Spaulding says on the subject:

"Great advantages, and beneficial results, in consequence of the establishment of a National Bank, were generally experienced by the Government, and by every class of community, during the continuance of its charter, - the public funds were kept in a safe depository,-the credit of the nation was established upon a firm and solid basis, - the demands of public creditors were promptly paid at places convenient to them, and in a currency equal to gold or silver, in all parts of the United States. The Government realized a profit of $671,860 on the sale of two millions of its Stock. A salutary restraint was exercised upon State Banks as to the amount of their issues, and as to a failure in promptly redeeming their bills in specie,-a reasonable amount of circulating medium was afforded to the community, whereby the industry of the country was brought into profitable and successful operation, and a steady, uniform, and safe currency was afforded to every one.

"During the period covered by the charter of the first United States Bank the population increased from 3,929,827 in 1790, to 7,239,814, and 89 new banks were created under State charters with an aggregate capital of $40,601,601. This was no more than was demanded by the increased volume of business. The country flourished in all the essential elements of wealth and power. "Public and private credit was raised from its prostrate condition at the close of the war to a very elevated condition, and the finances of the nation were placed upon the most solid foundation."There was reasonable ground to hope that an institution which had proved so beneficial to the country would be preserved and cherished as the continuing base on which might be permanently established the industrial and commercial policy of the Government."

The charter of this the first United States Bank expired on the 4th of March, 1811. On the 20th of April, 1808, the stockholders memorialized the Senate for a renewal, but the bill was defeated. In June, 1812, war was declared against Great Britain, and the same authority states that "In a short time more than all the disasters to the country predicted by the supporters of the bank in consequence of its dissolution were verified. We soon learned, from sad experience, that although pretended wise legislators could form new plans of finance on paper, which to some would appear quite plausible, still, on trial, the most essential thing was wanting-the State bank machinery would not work for national purposes in a great war. The country was soon flooded with from forty to fifty millions of new State bank currency, with scarcely even a nominal basis of coin for its support. The inevitable consequence was little delayed. In September, 1814, all the banks outside of New England suspended specie payments. The Secretary of the Treasury informed Congress that he had been under the necessity of selecting ninety-four different State banks, from Maine to Louisiana, as depositories of the United States Government.

"The various kinds of paper money in circulation made it necessary to keep four separate ledger accounts in each; and thus, instead of a single account, which was all that the Treasury required when the Bank of the United States was its fiscal agent, the Government finances were represented by 276 different bank accounts, scattered from one end of the country to the other. But, what was still more serious, it was found impossible to maintain that continuous supervision of the revenues, and to exact those periodic settlements which constitute the only effectual safeguard against error, demoralization and fraud. The banks were ready enough to receive the dues of the Government, but, specie being no longer a part of the currency, the Treasury was forced into a corner. It could not receive irredeemable State bank currency, and all its efforts to obtain settlement were futile. Thus the Treasury funds, amounting to nearly nine million dollars, were locked up in the suspended banks. As a consequence, the Government fell in default on the interest of its funded debt. Its Treasury notes were dishonoured, the business of daily life was prostrated, and universal distrust prevailed. 'The multiplication of State banks has so increased the quantity of paper currency,' said Secretary Dallas, in his report to Congress, ' that it would be difficult to calculate its amount, and still more difficult to ascertain its value.'

"The last year of the war presented the singular and melancholy spectacle of a nation abounding in self-devoting patriotism, and a government reduced to the very brink of avowed bankruptcy, solely for the want of a national institution which, at the same time that it would have facilitated the Government loans and other Treasury operations, would have furnished a circulating medium of general credit in every part of the Union.

"The Government borrowed, during a short period of the war, eighty millions of dollars, at an average discount of fifteen per cent., giving certificates of stock, amounting to eighty millions of dollars, in exchange for sixty-eight millions of dollars, in such bank paper as could be obtained. In this statement, Treasury notes are considered as stock, at twenty per cent. discount. Upon the very face of the transaction, therefore, there was a loss of twelve millions of dollars, which would, in all probability, have been saved if the Treasury had been aided by such an institution as the Bank of the United States. But the sum of sixty-eight millions of dollars received by the Government was in a depreciated currency, not more than half as valuable as that in which the stock given in exchange for it has been redeemed. Here, then, was another loss of thirty-four millions, resulting, incontestably and exclusively, from the depreciation of the currency, and making, with the sum lost by the discount, forty-six millions of dollars.

"The finances of the Government continued in a demoralized condition, when on October 6th, 1814, Alexander J. Dallas was called to the head of the Treasury Department. Never before had there been greater need of a master mind in that important office. Within less than a fortnight the new Secretary communicated to Congress a report of extraordinary ability, in which he strongly recommended the establishment of a National Bank, as the remedy required to bring the finances into order. Various plans for a bank were brought forward in Congress, which resulted in nothing until, on January 20th, 1815, a bill was passed. Many of the prominent members of both Houses, who had but five years before defeated a renewal of the former bank, now voted for this bill. It was, however, vetoed, by President Madison, on the ground that it would not accomplish the objects rendered necessary by the state of the revenue and the condition of the country.