The Lancaster gazette. [volume] (Lancaster, Ohio) 1863-1886, 1863-11-12
per cent. stock.

| D. Inc AUTHORIZATION OF the banks
recommended in this report, whose cir
culation would be secured not only by
private capital but by adequate de-
posits of United States stock with the
Government ... ...
~. 70 maintain in the meantime as
near to specie as practicable this Fed
eral currency first, by making it re-
ceivable in all dues to the Government
except for customs; second, by priv
ilege of funding it in United States
stock; third, by enhancing the benefit
ofthis privilege, not only by making
the stock, both principal and interest,
payable in specie, but by making it
gradually the ultimate basis Of our
whole bank circulation, which, as
shown by the Census Tables before re-
terred to, (ncluding deposits) nearly
doubles every decade.
"5. By imposing such tax ON the
circulation of the State banks as, to,
gcther with State or municipal taxes,
would induce them to transfer their
capital to the new banks proposed by
the Secretary.
&c. To relieve the new banks from
all State or municipal taxation.
~. In lien thereof to impose mod
crate Federal tax on all bank circula-
ton as bonus to be paid chcerfully
by these banks for the great privilege
Of furnishing ultimately the whole
paper currency of the country, and the
other advantages secured by these
bills. ..-.......
''rhis tax. as proposed by the Secrc-
tary, WAS one per. cent. semi-annuaIIy,
which in effect, would have reduced the
interest on our principle loans from six
to four per cent. per annum, SO far as
those loans were made the basis OF bank
circulation. Congress, however, fixed
this tax at about one-half, thus making
the interest on such loans equivalent in
fact to five per cent. per annum, so far
rs such loans, at the option Of the hold
cr, are made the basis of banking and
of bank circulation. This is u privil-
cge which gives great additional value
to these loans for Il c right TO issue
bank paper circulation of the country
free from State or municipal taxes is
worth far more than one-half per cent.
semi annually, to be paid on such cir
culation. That this privilege is worth
more than the Federal tax, is proved
by the fact that many banks arealready
being organized under this system and
by the further fact that moro than
20,000000 of the legal tenders have
already been funded in this stock, and
the process continues at the rate OF
from one to two millions of dollars per
day. 1t will be observed that the hold,
ers of such bonds can keep them, if
they please, disconnected with all
banks, receiving the principal at ma
turity, as well as the scmi-annual in,
tercSt in gold, free from all taxes.
"But, besides the financial benefits to
the Government Of Mr., Chase's system
its other advantages are great indeed
1t will ultimately displace our whole
State bank system and circulation, and
give us a national currency, based on
ample private capital and Federal
stocks, II currency of uniform value
throughout the country, and always
certainly convertible on demand into
coin. Besides, by displacing the State
bank circulation. the whole bank note
currency Of the Union will be based
on the stocks Of the Government, and
give to every citizen who holds the
bonds, or the currency(who will en-.
brace the whole community in every
State) direct interest in the mainte
nance Of the Union. -
"Thc annual losses which our pco.
pic sustain under the scperate bank
system, in the rate Of exchange, is c,
normous, whilst the constant and ever.
recurring insolvency of SO many Of
these institutions, accompanied by
general bank suspensions Of specie
! payment, have from time to time
spread ruin and devastation through,
out the country l believe that in q
period of twenty years, the saving tC
the people Of the United States, by the
substitution Of the new system, would
reach sup very nearly approaching
tho total amount Of our public debt
and in time largely exceeding it, AS
a question, then, Of national wealth, as
well as national unity, I believe the
gain to the country in time by the a.
doption of the new system will far eX.
coed the cost of the war. 1t was the
State bank system in the rebel States
that furnished to secession mainly the
sinews Of war. These banks are now
generally insolvent, but if the banking
system now proposed had been in eX.
istence, and the circulating medium il
all the States had been Il uniform ma
tional currency, based entirely on thc
stocks of the United States, the REBEL
ion could never have occurred. Every
bank and allits stock holders, and al
the holders of all the stock and notes
of all the banks, embracing our whole
paper currency, would have been mi
ted to the Government by an Interest
so direct and universal that rebellion
would have been impossible. Hamil
:. ton and Madison, Story and Marshal
and the Supreme Court of the Unitec
9 States, have declared that to the Fed
eral. Government belongs the 'entirC
regulation of the currency Of the coun
try That power they have now ex
ercised in the adoption of the system
recommended by the secretary. Oul