The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1867-12-12
The National Banks.

From the ~. Y. World.
These institutions will make hard struggle
for life, aided by such powerful auxiliaries
that we do not expect to see their death war
rant till after the Presidential election, nor
even then if Chief Justice Chase should be
the successful candidate. Their continuance
will be one of the issues of the contest, and
the public mind must be prepared to.form an
intelligent judgment thereon.
The manifesto of Jay Cooke and the reports
of the Secretary of the Treasury and the
Comptroller of the Currency present the
strongest arguments that can be made in
behalf of the banks. Before stating the decisive
objections to their existence, it may be well to
clear the ground by disposing of the pretenses
of their friends.
The main argument in favor of the National
banks is that they give us uniform currency,
and protect the bill holders against loss. This
is a specious fallacy. In the first place, their
notes. so long as specie payments are sus-
pended, merely displace an equivalent amount
of greenbacks, a currency equally uniform,
and safer for the holders The value of the
notes consists in their eXchaugeability for
greenbacks-at the banks till the banks fail,
and at the Treasury when they break. In the
next place, it is assumed, without warrant and
against probability, that after the greenbacks
are withdrawn, the only choice lies between
the National bank notes and such currency
as the Western banks furnished before the
war. Previous to the war, the State banks
were sound in the older States from the fact
that they rested on solid capital. They were
weak or rotten in many of the new States from
the fact that in those States, having little oapi-
tai and large uses for money, credit was
stretched TO the utmost, and frequently
stretched till it broke. This was temporary
evil incident to the newness and poverty of the
Western communities. But the West is be-
coming populous and wealthy, and before the
greenbacks 60 out OF use it will be in posi-
ton to have State banks as sound as those
of the older States before the war. 1t is absurd
to reason on this subject as If the West were
never to pass out of infancy. II is absurd to
argue, because child frequently falls in be-
ginning to walk, that it will never stand firmly
on its legs.
Moreover, the argument founded on uni
! formity is OverdOne and misapplied. When
! specie payments are resumed, the precious
| metals will form the only money that Will be
a tender for debts. These metals have the
stable uniformity which consists in intrinsic
! value, not the factious uniformity which de-
/ pends merely on legislation. This argument
1 of uniformity is insisted upon by the BANK
adv vocates mainly with reference to intercourse
! between different parts of the country. But
| foreign countries are distant; and yet no IN
convenience to foreign commerce results trom
the fact that their local paper circulation Is
not alike. Though much paper is used, gold
is the basis of distant commercial intercourse;
! Foreign bills of exchange are the natural and
ordinary currency of foreign commerce, and
domestic bills of exchange between different
| parts of the same country; gold being used to
iiouidate balances, as it would equally have to
! he if bank notes were used instead OF bills oil
| exchange. The main prop OF the argument
for uniformity therefore falls as soon as 1t is
| touched.
The security Of bank notes (whose appro,
pirate use is in local transactions), though OF
unquestionable Importance, is yet minor
consideration. The reason is this: that the
circulation of banks bears but small proper
tion to their deposits. Both are alike debts
to the community. When bank fails, II a
man has twenty dollars OF It's notes IN hls Il.
poeket. and five thousand dollars deposited in
It's Keeping it is a small consolation that the
twenty are secured while the five Thousand
are lost. 1t is the practice Of modern life foi