60 



BALTIMORE AND OHIO B. R. 



BANKS, U. S. 



BALTIMORE AND OHIO RAILROAD. 



This costly and important railway, extending 

 from Baltimore to the Ohio River at Wheeling, 

 and by its connection with Western roads 

 forming one of the four great trunk roads be- 

 tween the Atlantic and the Mississippi, has 

 suffered severely from the destruction of its 

 track, bridges, locomotives, and cars by order 

 of the Confederate Generals, who seemed de- 

 termined to so far destroy it as to prevent its 

 being used during the war for the transporta- 

 tion of Union troops or stores. On the 16th 

 of May several bridges on the road were de- 

 stroyed, and portions of the tracks torn up ; 

 on the 14th of June the village of Harper's 

 Ferry was burned and the costly railroad 

 bridge there destroyed ; on the 23d of the 

 same month, by order of General J. E. John- 

 ston, then in command of the Confederate 

 forces in that section, 46 locomotives and 305 

 cars were gathered at Martinsburg, Va., and 

 wood from the Railroad Company's supplies 

 piled around them and set on fire, thus ensur- 

 ing their complete destruction. The property 

 thus burned was valued at $400,000 or $450,000. 

 Still later, orders were issued, about the 20th 

 of October, by the Confederate General com- 

 manding, directing the destruction of bridges 

 and tunnels as far as the south branch of the 

 road. A part of these orders were executed, 

 but the mischief intended was checked before 

 its fall consummation by the capture of the 

 colonel who was directed to superintend it at 

 Eomney, Va., Oct. 25. In Dec., after the oc- 

 cupation of the line of the railroad by the Fed- 

 eral troops, and the commencement of its re- 

 pair by the Railroad Company under their pro- 

 tection, efforts were again made to obstruct the 

 work and destroy some of the bridges and tunnels 

 yet remaining. These efforts were unsuccess- 

 ful, and on the 31st of December only 50 miles 

 of its entire length (379 miles) remained un- 

 repaired. 



BANKS, U. S. The general stagnation that 

 overtook the business of the country in 1861, 

 produced a great change in the condition and 

 operations of the banks through which that 

 business is for the most part conducted. The 

 banking business had been very prosperous for 

 a period running back to the close of the Mex- 

 ican war. When the famine in Ireland and 

 Western Europe caused an unprecedented de- 

 mand for breadstuffs and provisions, the ac- 

 tivity imparted to trade by that occurrence 

 was attended by a demand for currency and 

 banking facilities, which manifested itself in 

 the increased profits of the existing institutions, 

 and in a rapid multiplication of new banks, 

 following the law of trade by which profitable 

 employment attracts capital. 



The settlement of California was, in 1849, 

 followed by the gold discoveries which power- 

 fully excited all civilized countries, sent a 

 crowd of emigrants to the new mines, and im- 

 parted a new impulse to trade in the United 

 States. Raw products and merchandise were 



largely shipped to profit by the gold produc- 

 tion, and the spirit of enterprise was not slow 

 in affecting the banks. They soon showed 

 signs of a greater degree of prosperity than 

 ever before. New York City, as the financial 

 centre of the Union, added rapidly to the num- 

 ber of its banks, and all of the States, to a 

 greater or less extent, followed in the same di- 

 rection. The banking system underwent a 

 change, however. In 1838, when all the banks 

 of the country were involved in a common dis- 

 aster and the system became very unpopular, 

 the State of New York projected the " free 

 banking system," by which all banks of circu- 

 lation in the State were required to deposit 

 with the State Comptroller security in the 

 public stocks to an amount equal to their cir- 

 culation. In case they failed to redeem their 

 notes in specie, the stocks were to be sold and 

 the redemption made good. The law was from 

 time to time amended until it approached as 

 near perfection as was possible. The principle 

 of it was embodied in the State Constitution 

 of 1846, which required " ample security " 

 from all banks of circulation. It seems to be 

 a misnomer to call that " free banking," where 

 restrictions were imposed where there had 

 been none before ; but the ingenuity of legisla- 

 tors had been taxed to make banking secure by 

 legislation, and the chartered banks had been 

 restricted in the amount of their loans and lia- 

 bilities in proportion to their capitals, while 

 there was no restriction upon the circulation. 

 That plan failed. It was now thought if the 

 circulation should be made entirely secure, the 

 associations might organize under a general law 

 without a charter, and be unlimited as to the 

 amount of capital or loans. This system work- 

 ing well in New York, became popular, and 

 under the favor with which it was received 

 banks began to multiply in the Western States. 

 The law was adopted by several States at the 

 following dates : 



The multiplication of banks was thus rapid in 

 the Northern and Southwestern States during a 

 period when railroad expenditure in those sec- 

 tions was very great, and their operations be- 

 came extended, but apparently not more so than 

 the general increase of population and business 

 warranted. The following table will show the 

 general state of affairs at various periods : 



