It has been claimed that by the organization of the national banks the government was enabled to dispose of its bonds and aided in carrying on the war. Do the facts warrant the claim? All national bank notes have been redeemable solely in Treasury notes. They do not possess the legal-tender qualification equal to the Treasury note, and cannot therefore be considered any better than the currency in which they are alone redeemable, and in comparison with which they have less uses. These are truths that were just as palpable twenty-five years ago as to-day. It follows that the issue of the bank notes did not furnish any better form of currency than that which came directly from the government to the people. Every dollar of such notes issued contributed just as much towards an inflation of the currency as the issue of an equal amount of Treasury notes. With these facts in mind, a review of the organization of the banks and their issue of notes will reveal the effect of such acts. In 1864 the notes of the government had been depreciated to such an extent that coin was quoted at a premium ranging from 80 per cent to 150 per cent. The record of a single bank organized and issuing notes under such circumstances is illustrative of the whole system. Take a bank with one hundred thousand dollars to invest in government bonds as a basis for its issuance of currency. The bonds were bought with the depreciated Treasury notes. Deposited with the Comptroller of the Currency at Washington, the bank received ninety thousand dollars of notes to issue as money. It also received six thousand dollars in coin as one year's advance interest upon its deposited bonds, under the law of March 17, 1884. This coin, not being available for use as money, was sold or converted into Treasury notes at a ratio of from two to two and a half for one. The bank, therefore, had received, as a working cash capital, a sum in excess of the money invested in its bonds. The transaction stands as follows: Invested in bonds $100,000 Received notes to issue $90,000 Received coin equal to, say 12,000--102,000 ------ Bank gains by transaction $2,000