Indiana State sentinel. (Indianapolis, Ind.) 1861-1865, 1863-09-28
answer. of the Comp,ro,,er of the
Currency 90 Questions i'm Relation
TO the National Currency Act. 81
TREASURY DEPARTMENT,

have been answered in the forms ane instructions
which have been sent from this Office, and by
letters to the interrogators- There are 4 few,
however, that can be more conveniently and
satisfactorily answered in this form than in any
other.
LIST Question. Is there any reasonable doubt"
of the constitutionality Of this actf
AnspeT. The constitutionality Of the act Of
Congress establishing, in time of peace, a United
States Bank, with power to locate in the States,
branches thereof, having been affirmstively de-
cided by the Supreme Court of the United
States, the constitutionality of the national cur
rency act is not considered to be an open ques.
ton.
In ordinary times the constitutionalitv Of this
act would hardly be questioned: but in the exist
ing emergency Of the Government, engaged, as
i. is, in a war of gigantic proportions-with specie
no longer a circulating medium-with a large
internal revenue to be collected in the States and
Territories. such a currency as is provided for in
this act is an absolute necessity. To deny to the
Government. through such agencies as Congress
might create, the power 10 provide a currency
to deny its sovereignty, but its authority to per
form properly and safely its acknowledged func-
tons.
ID Question. What are stockholders of State
banks to gain by disseminating their present
organizations, and organizing under the national
lawf
Ansrer. The chief gain will be in a circulation
of notes. which can not long be secured through
the agency of State Institutions. Legal tender
notes have created a taste and prepared the way
for a national bank note circulation. These notes,
in all sections of the country, have a better credit
and are in greater demand than the notes of the
strongest banks. Country bankers. notwithstaDd
ing the ~largeness of the issue. find it difficult to
supply the call for them. and are frequent under
the necessity Of ordering them. at considerable
expense, from commercial points, to meet the
demand that will not be satisfied with anything
else. The preference for these notes is not
chiefly to be attributed to the fact that they are a
illegal tender" but to the fact that they are
Government money, and must be good if the
Government is good. do not say that their
general credit is not, in a measure. owing to the
fact that they are declared to be "lawful money"
or that il was not necessary to make them so. to
place them beyond the influences that might, at
the time, have been combined to depreciate them;
but / do say, that the people, who control the
currency, as they do the legislation OF the coun
try, prefer legal tenders to bank notes. because
they are Government issues, are receivable for
G ,vernment dues. and must. every dollar of
them, be redeemed, if the Government is main
tanned.
The national bank note circulation is intended
gradually to take the place of the direct issues of
the Government. Il is not expected that they
will, at once, have the credit that has been
attained by the illegal tenders" nor that the
notes of the National Associations, scattered
from Maine to California, will be of uniform value
throughout the Union; but it is expected that
these notes, sustained by the credit and secured
ny the resources of the nation. receivable for all
public dues, except duties upon imports, and in
payment of all claims against the Government.
and, in case of the failure of the banks, to be
redeemed at the Treasury of the United States,
will challenge to a greater degree. the public
confidence. and possess more uniformity of value
than can he attained BY the issues of the best
managed State institutions. / will go further
than this: through the instrumentality of clearing
houses, or redeeming agencies. which. in due
time, may become a necessary feature of the sys
TEN, the notes of the national banks. wherever
situated, will be as nearly of uniform value
throughout the Union as the commercial inter
ests of the country will require. Z
There will not be, in my judgment, for any
considerable time. two systems of corporate bank
ing Zone State and the other nationally in the
United States; not that there is a necessary
antagonism between the two systems, but because
both will not be equally acceptable to the people
and equally profitable to the banker. One or the
other will fully occupy the field; and. aside from
the manner in which the national SYSTEMS being
regarded by the people. and the rapidity with
which National Associations are being formed. IL
requires no spirit of prophecy to predict chich of
the tiro is destined to giUe trGy. The losses which
the people have sustained by bank failures; the
inadequate protection which State legislation,
with rare exceptions, has given to the bill hold
ers; the fact that the good credit of the issues of
the strongest and best conducted State banks,
outside OF the States, or the section where they
exist, is not the result of public confidence in
their solvencv, but of the influence of bankers
and money dealers, who can as easily depress
that credit as they can sustain il, and who do not
unfrequentlv depress or sustain il. as suits their
own interests or convenience alone; that all the
credit that State banks have at a distance from
home, is artificial and unreliable; all these things
have given rise to a widespread dissatisfaction
with the existing bank note circulation. and Gre
ated a popular desire for a circulation, of whose
solvency there can be no question. and whose
credit will not be at the mercy of bank note
brokers
The Government of the United States is not
TO he overthrow by the attempted secession of
the Southern States, and the war in which it il
engaged. On the contrary, it will he vastly
strengthened ay the severe ordeal to which it is
being Observation-Disclosures by the evidence,
which is every day being exhibited of its inherent
power. and the conviction that is constantly
spreading and deepening in the minds of the
people. that tleir personal destinies are identified
with t-strengthened by the very debt it is con
tracing. and the evidences of value that are to
be based upon this debt.
Banks whose issues are secured by the Gov
eminent, and which are to become, to some
extent. the financial agents of the Government,
will. in my opinion. ere long. be the only ones
that will be tolerated BY the people; and If the
banks of the older and richer States continue, as
they have done, and are now to a large extent
doing, to furnish the newer and less wealthy
States with a bank note circulation, they will
have to do It through the agency of national
banks. In availing themselves of the privileges
of the national currency act. for loaning their
capital and credit TO the people Of the new States,
they will have the satisfaction of knowing that
while adding to their own wealth, they are
strengthening the Government. and creating a
powerful influence against reputation, by aiding
in furnishing to the people a circulation, secured
by the stocks. ard representing the unity of the
nation.
Aside from the matter of circulation the ma
tional currency act is as favorable to bankers as
the banking laws of most of the States. Should
it prove to be too stringent. il is safe to expect
that such amendments will be made TO il as will
accommodate il to the reasonable requirements of
capitalists, and the wants of a great and growing
nation.
Question. Will State banks be furnished
with the national circulation. according to the
provisions of the SD section of the act?
Ansper This section is a part of the law, and
must be obeyed. | have hoped, however. that
very few banks would claim the advantages of il,
The ENGRAVING upon a national system Of bank
ing of a provision that to some extent denaiioa
allies il, was. in my opinion, a great mistake
Nor can | understand how State banks, without
the aid Of State legislation. can avail themselves
of the provisions of this section without violating
their charters, or the laws under which they are