Abbeville press. [volume] (Abbeville, S.C.) 1860-1869, 1866-06-08
MIR. SKINNER ON THE NATIONAL nANK
CURRENCY.

aid OF Friday, he 18th inst headed "Mr.
Spinne,'s Lu. .olls views on the National
Bank Currency" being criticism on my
letter Of the Goth inst. to the Cashier OF
the Mercba IS ka,.onal Bank OF Memphis,
Tenu.-see, Which article, by its numerous
direct qleato' % me, seems to invite IN
answer. Tat it would have been more
just /, n.e TO have printed, in !copnection
with your comments, the whole OF my let
ter, aud that have reason for complaint
that this was not done think you wi! ad-
init, upon ro.petusal Of tho letter and ar
tcle in question. But, waving all matters
Of personal character, my main .ohjections
TIA. LAY bo urged, from whatsoev-
e~ r,,.ivrs, to tic national banking system,
TO advertise 10 the people this fact, viz:
,rat in na::.n;l lank notes we have tho
best secured bank paper circulating ME.
dirm that has ever been devised.
The .r.r;.ld makes m issue with the re-
mark that the notes Of a national bank
HAT has failed are "rather better than
those ola bail; in good standing y but riy
expia.a,ion rs to why they are better was
not given; to wit iii away from the busl-
ness raaY,s or commercial centres Of the
county, for the loason that the Treasurer
ct the United States nacomcs the cashier
cf such defaulliny bank, and viii, through
lis assistants and all other govcrnE.a,it Of
ticcrs, redeem such circulation" [. the
circulating notes of bank in good stand
ing mus: 10 sent to some distant place for
redemption, tho notes Of dcfaulting bank,
being redecmable at over four hundred dit
iercnt government offices scattered through.
out the country, at their face value, are oh.
yiu,sly "ralher better than those Of bank
in good standing"
In tho 47,h section Of the National
Currency act it is provided that in case OF
the failure Of national bank ''the Comp. |
trollcr shall declare tic United State bonds
and securities pledged by such association
oifeitcJ 70 the United States, and the same
shall theseupon be forfeited accordingly I; |
and lhcrcupou the Comptroller shall imme.
Secretary Of the Treasury shall, by general
rules or otherwise, direct, to the holders Of
the circulating notes Of such association, to
present them for payment at the Treasury
of the United States, and the same shall
be paid as presented in the lawful money
of the United States + !" And for
deficiency in the proceeds Of the bonds pied.
ged by such association the United States
shall have a first and paramount lien upon
all assets Of such association
1t seems clear enough that the notes OF
:. national bank in liquidation are liabili-
ties Of the government and are redcemable
at sight by each and all of the hundreds of
designated Icpositarics ofthe United States;
and most people in commercial circles un-
dcrstand this liability Of and certainty of
redemption by tie government. The Uni
ted States is therefore clearly legally bound
to redeem every dollar of the circulation of
a deiaultiug national bank. The govern
lnent virtually undertakes that its Blk per
cent gold interest bearing bonds-and any
other Of its bonds made Of equivalent val
u,--drrosited by national lanks to secure
the redemption of their circulating notes
shall not deprecate more than the difference
between such par value of the bonds at
which they are received and the lesser
amount of circulating notes issued to the
Lank thereon, and that if they do, the gov.
crnincnt guarantees to make good the de-
hclency to the noteholder. 1t agrees to
redeem all su"h notes from its own funds
Ia the Treasury at par, and this, too, wheth.
e: the securities deposited for that purpose,
with the sums that may be afterwards real.
lzed flom tho assets of such defaulting
banks, shall be sufficient or not. In other
words, tho government does not act in
the capacity Of joint trustee of the
na''on:, ....'!ks and the holders of their
notes TO pay the latter such sums MS it NAV
realza from the sa.es OF the securities of
Inc i"rmer; Tut it stands as the perfectly
secured c''iorser Of every circulating + ote
ISSUED by u national bank. The fac. that
all na1iona! bank notes arc legal tender
10 The government Tor all dues except GUS
IONS would be sufficient to establish this
i.ab'i'ty, oven if there had been no posi-
tive enactment of q mandatory cLaracte or
snch rs is contained in section FORTY seven
OF the Ia" above quoted. Such is the
opinion of the Secretary of the treasury
the honolabls Comptroller OF the Curren,
ecy, and of every other person with VIII ON
l ha': converscd who has given tho matter
attention.
In this connection I desire to state ano>
.thcr iact not generally understood that
Is, that on account Of the personal liability
Giausc IN the &C: on the failure of a nation.
q: bapE the whole "capital stock" of the
bank, from stability" Of the bank to it's
stoc,Sholders, , Immediately becomes as 'as.
seIs" 10 lis creditors.
AS an example showing public faith in
.Irrfa \