Daily Ohio statesman. [volume] (Columbus, Ohio) 1855-1870, 1861-12-17
A National nant and u National
80 DebT.

A national nank and NatiOnei
'-- DebS.
Those who remember the hard money DOC
trlnes enunoiated In the messages OF secretar
cH.sE while Governor Of Ohio, were doubles
somewhat surprised at the Recommendation
his late Treasury Report, that the Federal GOV
eminent should abolish the State banks an
provide the people, not with netalic' but wlt
apsper currency.
In his messages TO the Legislsture OF Ohio
Governor CEASE expressed the same doubt
that he does in his report about the constitution
ality of bank notes issued under State authori
~. and bis belief that Congress under the po"
ar "to regulate commerce" "cOin money" etc
possessed ample authority to prevent the oircu
la.ion as money, BY State banks OF .!
banks chartered by the several States
Of paper or Of any substitute for CON-
He did not, however, suggest, as noW' ina
Congress could constitutiOnally provide TO
a paper currency for the people in lieu OF tina
furoished by the State banks. On the contrary
he strongly ;nsimAted that It's power IN this re
spect was limited TO the coining Of money an'
fixing the value thereof, as It could make moth
ing but gold and silver legal tender. Tb'
roeder will find Governor CHAsE's views on tn'
subject of the currency set forth at length II
his message to the Ohio Legislature, dated Jan
uary 4, 1858. ..... ~ . GOWN
The present Secretary CHASE appears to diff
fer in one important point from the late Gov
eruor CHASE. The former alleges that sit !
too clear to be reasonably disputed that Con
grets possesses ample authority to CONTROL" mol
simply the cash, but "the CREDIT CIRCULATION
of the country, and, in his Judgment, "the time
has arrived when Congress should exercise this
authority" .e-ss.-.t e4@
The Secretary presents two plans Tor the ex-
ercise of this authority. The first contemplates
the practical extinction Of all the State Banks
tnow some 1000 in NUMBER as banks OF issue,
and the substitution for their notes OF "united
States notes, payable in coin on demand"
The State banks are 10 be extinguished BY "a
moderate tax gradually augmented on bank
notes." which in smother part Of the report are
enumerated as proper subjects Of Internal taxa
tion or excise, and included in the same class
as tobacco" and distilled liquors"
The secrstary, however, sees serious objec'
tlons TO national currency, thus directly issued
on the credit of the United States, as ID vonld
.snccun.ss the risk of "a deprecated, depre-
eiating, and finally worthless paper currency,
and the iunumerable evils Of dishonOred public
faith and national BANKRUPTCY"
These considerations lead the Secretary to
reject the first and recommend the second plan,
which is 'the preparation and delivery to insh-
tutions and associations of notes prepared for
circulation under national direction and to be
secured, as to prompt convertibllity into coin,
by the pledge of United States bonds and other
needful regulations" This scheme will, In the
opinion Of the Secretary, secure "the safest cnr-
rsDcy the world has ever enjoyed" and have
this particular advantage, thatit will cause ga
large demand for government securities, and In
creased facilities for obtaining the loans re-
quired by the war" Aa e ,e
It will be seen at once that both plans have
this in common, that they create paper circu.
latIon based upon the CREDIT Of the Government
or In other words, both propose the creation Of
q United States bank Of issue. According 10
.he frat plan, the notes would be Issued direct
" by the Government; according 70 the second,
they would be issued under Its direction and
control, by institutions and associations acting
as lts agents. which in reality amounts TO the
same thing. II the credit Of the Government
should sink, and Its bonds become depreciated,
the notes circulating under Its authority would
sink below par. and might become worthless,
under the operation Of the second plan as we'll
as under that Of the first. rs n
wshAye no preference to express at present
for either plan. The second, which appears to
be Secretary CHAss's pet scheme. proposes 70
establish Bank Of the United States similar
in its main features to the Bank Of England.
He, however, says nothing in his report about
specie reserve. By an csof Parliament passed
in 1874, the amount Of notes to be issued by the
Bank Of England on government securities is
limited TO Ell,OoO0 900 or $4,000 900, and all
further Issues are 70 be founded on deposits Of
coin or bullion. Perhaps Secretary CHASE antic-
ipates what seems highly probable that the
National Debt will soon swell 10 30 large an
amount that government securities will form q
basis, at least broad enough, II not safe enough,
for the whole paper circulation Of the country.
The recommendation Of Secretary CHASE, II
followed out, will bsa close imitation of Eng
land In the creation Of National Bank and the
funding Of National Debt ct the same lime.
proposition Is TO create United States Bank,
10 bs, like the Bank Of England, subordinate
and auxiliary to the National Debt. This debt
is TO be funded In Che shape Of bonds and other
securities on which promises to pay" are to be
issued by The authority Of the Government,
which win be merely and simply certificates Of
is indebtedness. These certificates will be
held, IN greater or less amount, By nearly every
Individual 10 the country, and will not all be
,Aksn up and redeemed fcE generatons 70 come,
psrhaEsnever. Thus, the foundation will be
easily and securely tassd for psrmanent Ma.
tIonol Debt, and permanent National Bank,
controlling both the currency and the business
80 A.