tion with a matter where the chief errors and difficulties arise from confusion of thought, the same precision of definition, upon lines which will throw out all the distinctions into the sharpest possible relief, is also of the first importance. In the last analysis, all the fallacies of bimetallism rest upon a lack of a due conception of the money function in its full distinctness and isolation from everything else.
The Constitution of 1849 allowed no banking institutions for anything but safe deposit, and explicitly forbade all issue of paper currency to serve as money. A law of April 19, 1855, prescribed as a penalty for issuing any circulating paper a punishment, for the first offense, of imprisonment in the county jail for not more than three months, or fine not to exceed $2,000, or both; for the second, and every subsequent offense, not less than one year's imprisonment in the State prison; or the term might extend to five years, at the discretion of the Court.
The Oregon Constitution of 1857 forbade the existence in the State of any institution whatever issuing notes to serve as currency.
The average bank note circulation per capita was as follows:
| 1834 to 1840 | $13.66 | 1846 to 1850 | $9.89 | 1856 to 1860 | $14.26 |
| 1841 to 1845 | 8.25 | 1851 to 1855 | 13.55 | 1861 to 1863 | 15.66 |
For the whole thirty years $12.41.
The States in which, in 1859, the circulation of notes under five dollars was illegal were Pennsylvania, Maryland, Virginia, Alabama, Louisiana and Missouri.
The ratio of specie to circulation and deposits in the different States, in 1859, varied from $4.25 on $100 in Illinois to $52.46 in Louisiana. Massachusetts had $21.63; New York, $20.39.[1]
In the Spring of 1861 four banks failed at Albany. Apropos of these failures the Banker's Magazine said: "A radical change in the banking system is required in this and particularly in Western States," and it spoke of the New York country banks as mushroom concerns. "The recent course of events in Illinois, Wisconsin and Missouri has demonstrated more strongly than ever the insecurity of the bank note currency of those States, and of other States where bank notes are issued on the security of State bonds."[2] This is the last general verdict on the old local bank system which we can quote from a friendly source before the upheaval of the whole currency and banking system by the civil war. If there had been no war, the banking and currency system of the country would have been a pressing, distressing, and unsolved problem. If the then-existing system was satisfactory, we find no proofs of it in the literature where that fact should have found expression.
