The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-05-16

m0ny between the NOrtn anu tne ooutn, nnu
plant the Union upon drmer foundation than
ever. Without they do this, and unless they
can furnish better evidences Of the beneficial
workings Of the system than those now before
the public, the whole system must eventually
be abandoned.
The Evils OF the National Banks and
Mismanaxenent OF Government FL
nances.
The rottenness of the Merchants National
Bank at Washington ought to arouse the peo-
ple to consciousness of the evils Of this ma
tional bank system. There have been some
failures before, but this is the worst of any.
We may very justly denounce the men who
have been concern in these failures, and
those who have been guilty of such gross mis-
management Of other peoples money. In this
last case Of the Merchants National Bank there
seems to be good ground tor criminal prose-
cution; and it is to be hoped that if the gov
eminent can reach any Of the parties in this
way they may be arrested and tried forthwith.
The managers of the bank, Bayne & Co., Pay
master Paulding, and every one concerned in
this infamous transaction, should certainly be
oyerhauled without gloves. But it IL not this
particular case that concerns as 80 much as 1t
is the whole rotten system of national banks.
They are o snare for con6ding depositors
and fraud upon the country. We have been
endeavoring to make the people understand
this for some time past and now we think their
attention will be aroused. There are undoubt-
eddy many sound banks, and particularly in
this city, organized under the National Bank
act, but this is not because they are national
banks. They were sound before as old banks,
and are sound independent of their existence
as national banks. But throughout the country
the new system gives facilities for the widest
speculation and swindling
These national banks have not been long
in existence and have greater advantages
than banks ever had before both to preserve
their credit and make money; yet we see
by the late failures that they may be as
rotten as the worst wildcat banks. The peo-
ple have been disposed to regard them as safe
as the sub-Treasury itself because they are
called national banks, and have no doubt
trusted them with deposits 70 q very great
extent on that account. 1t is seen by this last
failure that an agent Of the government placed
q very large sum in the hands Of one of
them and lost it. Others may do the same.
We caution the public not 10 be too confding.
The bonds deposited as security for their cir
culaton are no security for deposits. tits the
duty Of the government to protect the people
in this respect, especially as the banks have
been given sort of national character by the
legislation of Congress. II there be any law in
existence by which these institutions can be
overhauled they ought TO be thoroughly ven
tilated at once II there be not such law
Congress ought to pass one Immediately. Let
all their transactions be exhibited to the public
at short and regular intervals, and let the gov
emment have an inspecting and supervisory
power over them. The sooner they are put out
of existence the better; but while they exist
under the authority of the general government
it is the imperative duty Of the government to
see that the people be not swindled by them,
for they have been brought into existence by
and in the name Of the government, and the
people trust them on that account.
1t may require little time to remodel our
banking system, but the process ought to be
commenced at once. The present national
bank system has not yet got 80 deeply rooted
as to create much disarrangement in eradicat'
ing It, Let the INDUSTRIOUS evil be uprooted
then, before it acquires too much power. +
has all the elements for becoming more power
full and dangerous than the old National Bank
Congress ought, therefore, during the presen,
session to repeal the act creating the national
banks. II ought to provide for the Withdrawal
Of their circulation and substituting for that III
own legal tender greenbacks, which would be 9
far more desirable and sounder currency. The
amount thus issued in greenbacks In place o
the national bank currency, would buy up OF
retire the interest paying bonds now deposited
by the national banks as security for their cir
culation, and save from fifteen to twenty mil
lions of dollars year TO the country. AT th'
same time we should be saving this vas
amount the people would have currsnc!
they much prefer-a currency based upon and
guaranteed by the government itself-a cur
rency which would approximate 10 speci
standard much sooner than any other. tn
entire volume Of the currency would not b.
increased; ii would be only substituting on
kind for anothef--the national bank for III
grcenback, the less valuable for more valu
able one.