, 1863-02-05

Ny reasons for this suggested change are
as follows:
H. system proposed by you sxtenas 59 oyers
provisions based on that consideration, and
calculated to give stability and permauency
to the system. The new circulation shonld
be adequate in amount to become substitute
gradually for the notes Of all the present
banks, not by coercion, but by their own
choice, and the preference which the people
would certainly give to the new system By |
table 81, p. 1913, Of the eighth census, the con-
dition Of the banks was as follows:
Capital for sso o5
Capital Tor ls5U.. .........--.--....-.-. s!16!O.5
Loans Tor 1sCO o9a-Sa9,5oo
Loans for 1e11 .-.......:....-...-'.' 1aS6gt' 'e5t
specie lot laN. ...-'.-----.-----.-.-. oSoot'5s5
Circulation Of 1850 6o..........~-....... ao714a.47
Circulation Of 1856. 155,0l2,8Sl
Deposits for 1sG0.. -a3-at.lS3
Deposits for 1850. 1s, 67,6o5
Tins you will perceive that in 1860 the cir
culation proper of the banks, exclusive Of |
specie, exceeded 500, ,00O, ,0o0 and the circu-
laton and deposits reached s46o, 900, 600. You I
viii perceive, also, that from 80 to 60 the |
increase Of circulation proper exceeded |
aae eqeeedsa ths RGSsass ESs S5
Now, By reference to table thirty-fiye of tho |
ciglltl. census, p. l95, our wealth increased
from 1850 to 1sG0, laG.4 IS per cent. As wealth
is the true standard by which our currency
should increase, our bank circulation, inelnd-
ing deposits, increasing at tls rate, would
hare been 81 ,09 GOO Geo in 1870, and 81, 34o,-
496, 900 in 1850. But, il ne diminish the
| amour. at the end Of the fret decade by one
fourth, the result wonld be SIi9, i00, 900 in
1910, and S, ,76a, 1a22 900 in 1880, specie not
| being included in these tables or calculations.
| Bank deposits are equivalent to circulation
| in swelling the volume Of currency, there
| being no difference in TINT respect, between
| bank notes held hy individuals in their safes.
and bank notes deposited by them, with the
new bank notes were limited to 500, 600 900,
F.! more than one half the amount would be re-
presented by bank deposits, as shown by
liable "a.
As thc object Of your bill is to substitute
| loans taken by the new banks at par for our
! present currency, and to fund legal-tendcrs
| in United States stock, and thus arrest the
alarming depreciation Of these notes, and re-
store Til public credit, why limit the extent
to which these notes may be funded! If it
hc said the amount may be increased hereafter,
tinEency: Now is the time when it Is inpor-
| tant to arrest depreciation, and advance the
National credit. and this cannot be accom-
plishsd 70 my great extent, with the lisnita-
we shall certainly hare two hank paper sys-
tens, the present and the new system. each
warning against the other; but In the absence
Of such limitation, the present banks will
gradually, without any injury or conyulsion,
transfer their capital to the new system. Sure
not he presented hy any limitation, but, on
the contrary, encouraged in every proper man
ncr. Fully concurring with you us to the i'm
State bank issues, yet do not desire, nor do
believe you do, to do any injustice to these
institutions; but rather to frame sucha bill as
would make 1t clearly the interest of the old
banks TO transfer their capital gradually to
the new System.
Experience has shown that there is no dam
ger Of too large bank Issues, where such re-
stYietions exist as are found in your bill, and
where United States stock, with such mar-
. gin as you provide, must be deposited before
+ Fccciying the notes. 1 think. therefore, that
there should be no limitation as to amount.
In any event, these notes cannot be deprc-
ciatcd as much rs legaltcnders, because they
: will be secured by the Government stock,
| with margin OF At least ten per cent. addi-
sides, under prior lien. Indeed, so import
: ant is this mcasnrc deemed By me, that be-
. lieye its passage would soon be recognized, at
: home and abroad, both North and South, as
! | insuring the speedy overthrow Of the rebel
. . lion. But If Congress adjourn without the
! adoption Of such measure, our finances may
be uycrthroun III a few weeks or months, be-
tore decisive victories areaehieyed in the field,
and thus tempt foreign Intervention, increase
: the 1amentah1c divisions III the loyal states,
|
tions, and expose the Union to imminent
I peril. am assured, If the bill pass now,
= that new banks under this act would
!. he ut encc organized in New Orleans
y y which would be most important step toward
2 restoring the allegiance Of Louisiana and tht
I whole Southwest. Doubtless such new bank:
!; would also soon he organizcd In Memphis
u Nashville, Alexandria, Norfolk, NeWber11 allt
5 other Southern cities, as, from time to time
they might be permallen'ly occupied by oul
$..$- sH$$
{ banks and currency into the South woult
: operate as IN immense reinforcement to ou
t t armies armies in restoring the supremacy Of tn
! two per cent. Of the bonds hcla ny the nev
y hanks in lieu Of the taxes. As these bonds
IL By your bill, must exceed the secured ciycula
= tion at least ten per cent, this provisio,
: would make the tax in this form upon circula
Z tion, ten per cent. greater than that propose,
'e nation might eudanger the success Of the nes
. system. IN my opinion tie tax on the circu
. lntion Of the old and new banks should be til
- ea1nc, say two per cent. NJ you propose, an
a Of tho Government, should be in lieu Of a
~ other taxation, State or National.
- Thifd-1n sections forty-four and forty
~ eight, think ST. Louis aud Chicago shout
IT, b. added.
= Fourth-As to section forty-uine, th;ul
s Congress should prescribe in this act or,,a1
~ izirg these national banks, one uniform max
J, ianuIn rate Of interest, taking seven per cen,
~ which prevails in New York: It docs not fo
e e low (as wc now see in New York; that so his
T., .o be regulated b. the law Of supply and ,!f
nc W mand. One Of the great powers Of the Ban
" OF England, and Of other European banks,
Is to check dangerous mutations by ra:siu
=, the rate Of interest on loans BY th
i Ie nanks and siz T. Per sent hsTs IT,, .; 3;
ny al1-i1nportant object. If the rate Of Intcre:
y. be not uniform, great advantages will b
~ niyen to these new banks in some States orc
81 double tie rate Of interest, thus restrictin
ne the benefit OF extending the new syste1
e;1 sT equally throughout the Jnion.. In 50 ne
IL the States different rate Of interest is pr
~ scribed in different counties. As these ne'
~ States stock and fiscal agents Of the Cover
W ment It Is essential that no State sAonld haz
the power to destroy them or impair the
usefulness By taxation, By regulating the raj
Of interest they ma! receive, or in any oth'
~, | way.
At AL national bank charters heretofore la,
ii provided one uniform rate Of Interest on LOAF
of made by such banks throughout the Unio'
ne Besides, the ratc Of seven per cent. wonla II
9n IN md tho gradual transfer 10 It Of the capt;
i'll Of the present banks:
ID Flth.-1n section 81, these new banks shoul
he ! be made and declared to be fiscal Hgfhfs q
81 ! Gc,y4n1ntht. This would place their const
lie nationality beyond question, according to til
-. principles already settled By the Suprc1u
~ ! Court Of the United States.
H. H. screnth-scction % confines the lowest d
~ nomination Of notes to be issned By the ne
~ banks, to S. This would be we'll, aud even
~ ~; higher limitation, when peace shall be r
" stored and specie payments resumed. But
y: think at present there should be a dit1ercl
Ees provision. The banks Qfany) that will be II
Ut ~ most injured By the new system are mani
Il, ~ the small country banks. 70 prevent II
u u such injurious operation, I weu1a give |
~ banks having capital not exceeding 1900 90
ais :ns all the Issue Of notes Of lower denomin
ne ton than IS. This would be vast inducemel
" to these small banks TO transfer their capt.
M u to the new system, thus funding larE
Wy amount Of our national currency, under $50
IL, III United States stock. This provision as
-, notes under S.. % should continue until spec
'Ii payment w,as resumed By the Goycznmcn
led and, after that period, Ill paper cur1cnt
M under $500, cmauating from any source WIN
NC ctcr, should be positively prohibited By Co
u Ercss. Ifthe present provision as to $500 I
" retained in the bill VIC shall hare all the eyi
u u oftwo conflicting bank systems, the old At
ne the new; and the notes Of the old banks und
ne $500 {nlainly entirely unsecurcd) will pa
On chiefly into the hands Of the working c1asse
er- who, above all others, ought to be protecis
D[hh, [h, against losses by bank notes.
esE