The  panic  especially  affected  the  state  banks.  These  banks
were  authorized  by  the  laws  of  the  several  states  to  issue  notes

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154  RECOLLECTIONS

as  money  payable  on  demand,  with  no  common  system  or
methods  of  redemption,  and  varying  in  value  according  to  the
solvency  of  the  banks  issuing  them.  The  banks  in  a  few  of
the  states  maintained  their  notes  at  par,  or  at  a  small  discount,
but  the  great  body  of  the  notes  could  circulate  only  in  the
states  where  issued,  and  then  only  because  their  people  could
get  no  other  money  in  exchange  for  their  products.  The
necessities  created  by  the  Civil  War  compelled  the  United
States  to  borrow  large  Bums,  and  to  aid  in  this  a  national  cur
rency  was  provided,  concerning  which  a  statement  of  the
measures  adopted  will  be  made  hereafter.  It  is  sufficient  here
to  state  that  the  national  currency  adopted  proved  one  of  the
most  beneficial  results  of  the  war.
The  financial  stringency  of  1857  led  to  a  careful  scrutiny  of
appropriations  for  the  support  of  the  government.
