New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1858-02-27

plan for the redemption OF al Wisconsin banK notes
at some central point within the State. Wisconsin
suffers ms do other Western States, from the issue
of paper money by banks situated on its remote
frontier, away from railroad and steamboat routes,
and almost if not quite, beyond the points even &C
cessible by stage coach. BY an ingenious dodge
banks are established at these distant places and
issue Their notes, which are brought into the GEN.
tiers of business and population and there set ahoat
Being only redeemable at the bank, and that point
being entirely out of the way, the bills fill the chan
npls of circulation and hold possession of them
sgainst all the larger and more centro b.nka The
difficulty of sending them home for redemption
makes them really ncOnyertibe except at q dis
count Of from three to five per cent. The Wiscon-
Sin system being after the pattern of New-York
and basiDa its circulation upon stock securities, the
bank notes are intrnsically good, and this aggra-
Yates the evil complained Of. If the banks were
weak and suspicion could be thrown upon their
issues, the snperabundance of distant bank bills
would work it's own cure. But the bills being
Known to be good, they pass currently i'll spite OF
the difficulty that attends their conversion into com.
In the long history of banking, this is COM
psratiyely fresh chapter of experience. 1t is a
worthy subject of study to the theorists of whom
great crop is always Matched by every new COM
mercial revusion. More than one essay has been
written during the existing crisis to prove the value
and excellence of circulating medium not redeem
able at once in coin, but resting upon valid securi
ties, that by crcumlocutory process could at last
command the precious metals. To those who have
faith in such system We can point to Wisconsin
to-day, as furnishing all the essential conditions Of
their theory reduced to practice. But the Wiscon-
sin system even in the features complained Of has
its advantages. 1t provides fuller circulation of
sound paper money than can be obtained under
system which makes bank bills redeemsble after
the New England system. This is certainly sn ad-
vantage For the more money there is ahOat in
any community the better, whether that money be
in coin or in paper, provided, of course, that the
paper money rests on u sound basis and is redeem
able in real money. One of the chief advantages
of banks in the interior Is to issue q circulating
medium. This is equivalent to cutting up the
property Of the country into one dollar or Eve dol
lar parcels and using it in the way of trade aud
business and in paying the wages of labor. This is
principal function of the banks, which they per-
form in cases where it could with difficulty be done
without their agercy. Anything, therefore, that
tends to promote and enlarge the circulation of
solvent banks, that circulation being properly
secured, We are inclined to look upon with favor.
But experience ia constantly suggesting limits to
the operation of the most benefcent general prin-
ciples Of action, in banking as in everything else
In Wisconsin il is evident that bride needs TO be
put upon the principle of free banking, even where
the circulation is well secured. This has been done
in the State Of Newly by an act compelling the
redemption of al bank bills in this city at frac
ticnal rate of discount.
Experience has shown this to be necessary to tn
public convenience, and that experience is identica
with the experience Ofother States. Wisconsin can
not in this respect be better situated than New
York, but worse. That State mutt therefore
sooner or later come to the same results 10 whic
We have come. A redemption BY all the banks q
some central point within the State is q nee sssty
to equalze the value of the circulating medium.
which it appears to US q wise legislation will en-.
force. The question there, as well as here, must
principally turn upon the rate Of discount at which
remote banks shall redeem their issues at the cen.
tral point. If the remote banks are al.
lowed to redeem at one per cent discount, they
should esteem themselves fortunate. One-haf
of this would give them decisive advantage over
the central banks, which can be EASILY reached aud
forced to redeem at par-an advantage which might
well satisfy them, ard which is perhaps enough to
continue the paper emission in sufficient abundance.
We hold to the maintenance at the commercial
center Of some fixed rate of difference between
coin and the general circulating medium of the
State. Ii their value is identical the circulation Of
the country baIk notes becomes too much reduced
std par,aAes too much Of the character Of mere
W. " elctsage Or .he .rat.u5 csl::.- II. W.