The Tiffin weekly tribune. (Tiffin, Ohio) 1859-1868, 1867-10-31


IL they organized under the new Nat
ioual systcm, they should be entitled
to a certain proportion Of circulation.
This was also the principle induce
mont offered for the formation Of
new banking institutions. Without
this pledge Of circulation few. it any
Of the old banks, would have surren
dered their old charters, sud it would
have been impossible TO establish the
National system at all That circu
latiou cannot now ba taken away
without a palpable breach of faith to
ward the combined capital Of the na
tion such a breach of faith as would
svcr after render capital tmid, eau.
tlous aud backward in its dealing
with Government which would thus
dis'5sard it- pledges. However
plausible tue proposition may seem,
the people cannot possibly bc bcnef
ted b. any financial measure which
practically rcpudiatcs the contracts
of their Government.
3. This claim would be equally
good against any system of banking,
Tor the actual point Of the argument
is, that SO long as there shall be a
National debt, the Government ought
to supply all the currency Of the
country, in order to save interest.
Suppose the old State Bank system
were now in existence, with three
hundred millions Of comparatively
unsecured circulation, there would be
still stranger reasons why the Gov
ernmcut should force the State Banks
to retire their circulating notes, aud
aud itself supply the needed currency.
The people would, in this supposed
case, save just ~ much interest as
they would now save by retiring the
National Bank notes. Hence. the
real question is, shall We have any
banking system at sll1 for. if the
present excellent system be destroyed
it would be impossible to originate
another which would not be open tc
the same objections. If any e1olu.
siyoly greenback currency be adopted,
of course, we can have no system of
banks, either State or National,
having the privilege of circulation.
A. But it is not true, that the Gov.
ernment would annually save eigh.
tesu millions of dollars, or any part
Of that sum, by destroying the
National Banking system, aud issuing
greenbacks in place Of the National
Bank currency now in circulation
The fact, wi ioh shall soou
substantiate, indicates how little this
subject is understood by those who
are most persistent in their attacks
upon the present system Of banking
1t is not question whether the
Government ought, or ought not, to
pay to tho banks the interest on the
United States bonds, Owned BY them |
and deposited at Washington to
secure their circulating notes These
bonds are the private property Of the
bsnks-ths agglomerated capital of
individuals who have thus united |
their means in legitimate business
aud no matter who held these Gov
ernmeut securities the interest would |
have to be paid all tho same The
National Banks are just as much |
entitled to the interest on the United
States bonds thoy have bought and
paid for as, are the farmer, the me
ehanic and the merchant, to the
interest on the bonds held by them
1t being plain, then, that the Gov
crnment prefers no special privilege
upon the banks by simply paying
them interest on the United States
bond, they hold, il becomes necessary |
10 look further for the "favoritism'
and loss 10 Government, of which we
hear complaint My statement made
above being necessarily admitted, it |
will be claimed that the National
Banks are permitted to issue three
hundred millions of circulating notes,
which amount they loan TO their Gus.
toners at an average interest of six |
per cent-thus in reality receiving a
double in crest on a single Investment
of three hundred millions of dollars.
Then follows the additional claim
that tho Government may jus. as well
supply this three hundred millions of
circulation, and with il buy up aud
cancel an equal amount of United
States bonds, thus saving to the peo
pie the eighteen millions Of annual
interest.
This has a plausible look and mis-
leads many. By this showing the
banks charged with eighteen millions
OF an annual interest derived from
their circulating notes, which amount,
il it really be received, aud no equiv.
alent be rendered by the banks, is
virtually gratuitY or special privi-
lege enjoyed by the National Banks
The interest on Government bonds
has nothing to do with the subject
the "fayoritism, if such there be, is
connected exclusively with the cirou-
lation of the banks.
But, | reply the National Banks
do not receive anything like eighteen
millions Of interest on their three
hundred millions of circulation.
What they do receive, the following
facts, which are accessible to all, will
show;
Tho very law which authorizes the
National Banks 10 issue circulating |
notes at all, also requires aud eompes |
them to keep constantly in their
vaults an average of twenty per cen
tum, (twenty five per cent. in cities,
fifteen per sent. in the oountry) Of the
amount of that circulation, as re
serve. Here are sixty of the three
hundred millions Of circulation, lying |
idle in bond the yer round, aud the |
amount on which tho banks can re
ceiye interest is thus reduced to two
hundred and forty millions
Again, the same law requires aud |
compels the banks to keep reserve
equal to twenty per cent twenty-five
per cent. in the cities and fifteen in
4. a Al.