Daily State sentinel. [volume] (Indianapolis, Ind.) 1861-1865, 1865-09-06
Lean wIshous Intsrest.

n
According TO the theory Of Mr.. Chase, "the
entire circulation Of the banks is loan without
interest from the people 20 the banks costing the
latter nothing except the expense OF issue and
REDEEM ption, and the interest on the specie kept
on hand for the latter purpose In accordance
with this idea be insists that sound policy re-
auirsd that the advantages OF this loan be trans
ferred from the bsnks. representing the interests
Of the stockholders TO the Government, repre-
sen,ing the aggregate Interests OF the whole PEG
ple.
Thi. wa, attempted. and partially accom-
plished in the legal tender system, but the Ma
tional Banking act was q complete reversal Of
this avowed policy, aud was designed TO transfer
the advantages OF this loan from the Govern
meEt to such banks as might place themselves
under the control Of the National Treasury
That act, however. did not propose that the cur
rency thus issued should have any advantage
over the old bank issues on the score Of not be-
ing subject to redemption Ii is true that the act
does not require convertibility into specie, bat
il especially provided for system Of redemption
in legal tender notes, aud proposed To secure
this By severe penalties.
A large part OF all that il is written about en-
forcing this redemption Is either done IN the
grossest ignorance, or for the purpose OF throw
ing dust in the eyes of the people TO accomplish
some selfish end bank located at the South,
we will say, deposits Its SIX per cent. bonds at
Washington and obtains one hundred thousand
dollars ia circulating notes. These are printed
at the expense Of the people. but they are TO be
signed in each case by the banker issuing them,
who thus becomes responsible for their redemp
ton. The bank loans 500 900 10 its customers
and pays out these notes TO them. As long "a
the notes stay out the bank is drawing double in
terest, first on the bonds a. Washington, and
secondly on this loan When the notes come
| in, its investment s reduced 10 simple interest
again. but it has only to pay them out to renew
the double profit. Now this process 10 perfectly
legitimate as long the bank prepares 20 redeem
the notes at the moment their proper function is
ended. A few OF the notes will DE boarded BY
people living near the bank, bu. the great bulk
of the issue start at once their travel TO the
financial centre. They are RENTED by merchants
direct TO the city. or 20 by more clrcuitous
route but this is their inevitable tendency The
moment they reach the centre their natural
movement is ended They are paid into a reser-
| voir, assorted and should be taken up in ex
change for legal tender, and carried back in
packages to their place OF issue. to begin again
their round OF travel. The bank is allow
ed to reckon in It's legal reserve every dollar it
| keeps at the financial centre TO meet these notes
rs they arrive, so that IL has all the legitimate
| profit which can DO made out Of the circulation.
But, it may be asked. why need they be re
deemed here, a. the financial centrer The notes
| OF most distant banks are not thus redeemed
now, and what is the Tesultg 0Eo bank here has
! $3.50 900 of these notes now In its vaults. Who
does not see that il is osning that SUN without
interest to the banks which have issued them and
failed to provide here for their rsdempton2 The
| various City banks now hold several millions OF
distant bank notes thus useless TO them. loan to
this amount for which they have no interest Do
you ask, why not pay them cut sgaing IL is true
that the banks could pay them out as fast re-
ceiyed, but this would be to convert the whole Of
| the currency used here into this class of notes.
The city banks. and others easy Of access, would
| be s@iiad ~ --~-s ---.'..o {. legal tender
to redeem their notes, ard thus the issues OF dls-
tsnt banks would furnish the whole circulation
! But more than this: The fact that every note of
this class once here was kept sfost. would induce
| selfish bankers at distance TO send their issues
to the market direct and thrust them into circu-
| lation. In the absence of regular system OF
| redemption, any bank who wished to borrow one
hundred thousand dollars need only bring its
| notes to this or some other financial centre and
| pay them out. Once here, the banks must keep
them going until they are worn beyond recog-
| milton
IL no regular system of redemption is adopted
! the banks will soon be compelled to do as in
| olden time with country bank issues; each large
| holder will seal up those il receives and return
4
| small holders will cell theirs at discount as un
| current.
| But why not have a system of redemption with
| these issues, precisely as il these notes did not
come at first from Washington Neither their
ccumulation here, nor continued circulation can
in any way benef. the National Treasury. All
this talk about "discrsditiDg the national issues
is mere cover OF some stock iobbing writer who
has his own personal ends to serve What ad
aufo IA in ahaD tn (t.S
to the Secretary Of the Treasury that the Park
National Bank Of New York should hold here
| $50 600 notes issued by the Bank of kenOsha?
| Ii is not loan to the Treasury. but to the he
nosha institution. IL the Park Bank seals the
notes up and sends them for redemption il is not
because 1t has any pque against the eagle on
these issues but because il does not desire to loan
a bank IN the wilderness that amount Of money
without interest.
No man can make an argument against sound
system Of redemption that will stand tue test OF
a moments serious examination. We are not
urging the adoption OF any given plan, but only
| the Establishment of some sound, judicous sys
TEN, oy which the paper money, when il has ac
| complished its natural function. and reached
the commercial center, may be exchanged for
It's equivalent in legal tender. at the option Of
| the holder.
What plea can be made agains, such sys-
teml The use OF abusive epthets does not meet
the case. Those who resort to this style OF writ
ing are merely trying TO defeat by clamor pro
position which they cannot refute by logic. II
a man is opposed to any system of redemption,
let him boldly advocate reputation. on the
| ground that no Que ought TO pay his debts
unless be shall hnd il perfectly COW enent but il
Is eowsrdly 20 contest this demand for equity
behind the presence OF aregard Tor the natlona
| credit The national bank note is the pro mise OF
an individual bank to pay certain amount in
legal tender on demand. this promise being Sc
cured by pledge OF Government stock In the
vaults Of another bank, this is a loan to the is
suer for that amount without interest The de
mand for redemption is discredit 10 the
plghted stocks, but an intimaton that the
amount loaned 10 wanted. la the adoption of
plan to meet this service, there !. need Of the
highes. wisdom; but no one can oppose all plans
for redemption without fairly subjeeting himself
! 90 TOE charge Of ignorance or ssi6shness New
ork Journal of Commerce.
THE INV Albany PsnsrrrrY-The New
Albany Presbytery has Just closed pleasant
session at Bedford. Indiana This BODY embraces
in lie own care twenty Two churches in the six
counties around New Albany. IL i COMPOSED
Of ten bishops and lay delegate. an elder from
each OF is churches. Ia numbers 1916 conmu-
Nc 81 4.