Daily Ohio statesman. [volume] (Columbus, Ohio) 1855-1870, 1862-01-07

associateu IN tne system, liable, to the full Z
tent OF all their means and assets, for the
sues Oh each Branch. II has O "Safoty Fund
put that innd Ia not, as In other systems
banking-and is often misapprebended. as
y this-held as fund for the protection of b
note-holder, but for the benefit of the ban
themselves. The "Safety Fund" SO to spea
from which the note-holder is protected, co
n sss o. the entire capital, assets and means
ail the branches, and IL is tho duty of the ma
ayers, In case of the insolvency OF any OF
branch, to make immediate provision for II
payment Of the notes OF such, in coin, by r.
qulsltlon upon the solvent branches.
Thus in the exhibit above stated, the entiI
four millions Of coin is liable for the redeml
tion OF the notes of any insolvent branch.
But this is not tho only means Of sustainin
the credit of these issues in the event of
failure. Every branch Is required to receiy
The Issues OF such failing bank, in payment
all debts, at their par value. This prevent
! their depreciation, as they are current In an
part oil tho State for this purpose alone. IL
through the operation OF these two influence,
that the principle of immediate availability. Al
distinguished from that of ultimate security
has been attained, whereby this system has beer
distinguished from all others
The third object, that of apportoninp thu
banking capital of the State to the business
. which can only be attained by periodical adjust
ments of the same TO tho changing deyelop
ments in the business, activity, energy and dc
mand OF different communities. OF these the
Legislature is the best Judge.
IL 10 due to this Institution that tho fact
should be here stated that it has always chow.
ed readiness to aid the State in its financial
operations, and under tbe administration of nv
immediate predecessor, at the time of the dis
covery OF the great defalcation in the Treasury,
rendered such efficient aid as materially assist.
ed in protecting the honor and credit of the
State. Is has also made liberal inv in
Ihe bonds OF the State and of the General Gov.
ument, iseued to obtain the means of SUP.
,ssDg the existing rebellion. have looked
W 1t and depended upon it, aud still do, 40 q
certain source Of greater assistance, il crcum.
1ces should render II necessary to call upon
Fsvlng thus called the attention of the Leg
Ire to this subject, will only add that I
teArd 1t az one OF the most important that can
Jome before you ut this session, and hope it NAV
be treated in the. calm, unprejudiced spirit in
hich all purely business questions should be
acted upon and disposed OF. am aware that
questions as to the constitutional powers of the
Legislature are involved respecting the manner
OF effecting the object here recommended.
-
with entire confidence to the wisdom of the
Legislature in regard to the mode and extent of
taxation required under the Constitution and
laws of the State, and other notifications
which experience may have shown to be neces-
sary or expedient.
The Secretary of the Treasury, in his recent
able report to Congress, on the finances of the
Government, has called in question the consti.
tutional power of the States to authorize the
issue OF paper currency by local institutions.
He also suggests that rhe exercise of this
COVER may be controlled by Congress under its
constitutional powers TO levy taxes, to regulate
commerce, and to regulate the value Of coin
the judgment of the Secretary, the time has
arrived when Congress should exercise their
4 lthority.
\ Passing, for the present. the considerations
taat the power thus called in question has been
exercised by every State in the Union, and this
rom the foundation of the Government to the
present day; that 1t has been recognized and
| sustained by the highest tribunals of the coun
try in every epartment-executive legislative,
and Judicial; that it has entered into and be-
ONE incorporated with all the business trans- |
otions of the people; and that the introduction |
new basis and system of credits for thirty |
illions OF people, by the summary removal of |
Ie that has thus been established and acted |
lon, would be attended with most serious diff |
4lties under any circumstances, and especial |
nder the existing embarrassments Of the cout- |
Ey;-passng ell these considerations, see the |
ost serious objections to the whole project in |
fIe means suggested for its accomplishment.
The Secretary suggests that the gradual with |
eirawSl of the notes of private corporations and
the issue, In their stead, of United States notes,
payable in coin on demand, may be effected by |
the exercise, by Congress, of the power to levy |
taxes, and that moderate tax, gradually aug
mented, on bank-notes, will relieve the national
from the competition of local circulation III
the Government will furnish a better currency
to the people than that of their local banks, no
such process as that OF tax, gradually aug |
mented, to the extinction of the latter, will be
necessary for the protection of the former.
The people are not only competent to decide, |
but will be ready and quick to choose the better
currency.
The right to discriminate in the imposition of |
taxes, for the encouragement and protection Of |
particular interests OF the people, may be ad- |
mitted, and it's exercise under peculiar circum- |
stances expected, but the right to discriminate |
against a specific interest, and to levy tax |
graduated to the declared purpose and object OF |
its destruction, is power which, once conceded,
may prove to be an engine of crushing force to |
any local or State interest, or State institution.
ing paper currency as substitutes for that now |
furnished by local or State banks, both Of which
are liable to serious, and, as ! think, fatal OBJ.
jections. "The first cohtemplates the gradual |
withdrawal from circulation of the notes of |
private corporations, and for the issue, in their
stead, OF United States notes, payable in coin |
on demand, in amounts sufficient for the useful |
ends of representative currency" To this |
plan such serious objections presented themsel- |
yes to the mind Of its author, that he abandons |
it, and dismisses 1t by saying he contents him
self with observing that, in his judgment, these
possible disasters Gncident to the Elan) so far
outweigh the probable benefits of the plan, that |
he feels himself constrained to iOrbear recon-
mending its adoption. Ii may, therefore, be
dismissed from further consideration.
The second plan of the Secretary is simply |
the system of local banks, as now in existence, |
with circulation based exclusively on United |
States stocks. II differs in no essential particu-
lar from the stock bank system, now in use in |
this State, except IL excludes the stocks of the |
State, and requires those of the United States |
as the cole basis Of security for the crcula- |
tion.
To the objection already stated 10 this sys-
tenn of banking, namely, its want of immediate |
availability as distinguished from ultimate secu
rity, the plan proposed is liable to other objec-
tions, among which l may enumerate the liabil- |
ity OF greater huctuaton in the market value
Of United States than in Ohio bonds; the estab-
fishing Of a paper currency for all the States
upon one basis, the depreciation of which, aside
from its ultimate security, would affect and |
damage the entire system; the discredit of State
bonds, as basis OF security, and throwing large !
amounts upon the market in order to effect the
proposed changes.
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