Evening star. [volume] (Washington, D.C.) 1854-1972, 1867-12-03

a national currency OF uuiform value and I'M
d fn9,sS s sS,.eney TO , NEE. this ssSsss,y
oriy temporary expedieBt) the National
BsnkiBg system VAS created, not to destroy
the STATE banks nor ipjur,cusly TO affect their
business, but 20 furnish, through their agency
and that OF new Institutions which might Be
orgsnixed under ii. permanent national
oank-note circulation. Had 10 been supposed
that the object Of those who advocated the
measure was to bring the State banks under
control of The Federal Government for the
purpose Of destroying them, or that such
would be It's effect, IL would never have been
fenced By it's friends, and NO such effect was
anticipated by the hanks. With that spirit OF
patriotism which was go marFed
ensrscter,stie Of the people Of
the State banks reIiuq uished, at the request OF
the Government. the greater privileges pos
sessed by them under state laws, and. 10 con-
nection with the new banks organized under
the law, became efhcIent aids IN negotiating
the pubic loans and sustaining the public
credit To all banking systems under which
objections, and II there were none in existence
In the United States the Secretary would hest
tate 70 recommend or to endorse even the most
perfect that has been devised. The question
now 70 be considered, however, is not whether
banks Of issue Should BE- created. but whether
the National Banking System should be sus-
tanned. In the present condition OF the cour-
try, and in view Of the relations that the
National Banks sustain 10 the Goyernment.
ignoring In this connection the question
o. good faith,) the Secretary has no
dinc1lty In coming to the conclusion that
they should BE- sustained. rhey are SO inter.
woven with all branches of business, ana are
so directly connected with the credit OF the
Government that they could not be destroyed
cial troubles which IT is now in no condition to
meet. At some more propItious period, when
the Union shall have been fully stored, and
All the States shall have attained that sub
hal
sources and the energy OF their people must
sooner or later secure for them. il may per-
haps be wise for Congress to consider whether
pepsed with. The present is not fayorable
time to consider this question. The condition
Of our political and financial affairs il too
pei the National Banks, or any considersbie
Number of them. to call In their loans and put
their bonds upon the market for the purpose
81 sps means o. their cireu
dispensable. The public mind Is too sensi-
tive, business is too unsteady, and the politi-
cal future Is too uncertain TO warrant any
financial experiments. Fortunately none are
The National Bsnking System has accom-.
Pills he'd all and more than was anticipated BY
ats advocates. II has furnished q circulation.
deprecated 1t lie true, like the United States
notes, but solvent beyond question, and cur
rent throughout the Union II has prevented
bank note panics and saved note holders from
losses IL has aided in regulating domestic
exchanges, and furnished the Government
With valuable financial agents Had IL not
been adopted, State banks would have con-
unued, as long as they were tolerated, to fur
nish the country with bank notes. In most OF
the States. banks were not required 10 deposit
stocks for the security of their notes, and in
there was no limit 20 the amount OF
bonds that might be deposited and con-
sequen'ly no limit 10 the amount OF notes
ma might be put in circulation. In
TpS rp Wa M
capitals OF the banks, frequently unreal. and
the partial liability of stockholders, generally
deceptive. Who csn estrmate the extent OF the
injury which the people and the Government
would have sustained If State institutions.
without any other restrictions than were
enforced by STATE laws, had been permit
ed. during the war, TO occupy the
field. All having suspended specie nav
ments, aud tberety been relieve from he ne
cessity IF fnrEish hing evidence OF soIyency
pax parks nnw,sei! or cishonsstIy managed would
maLageG wisely and honestly While he lar
ter would have tound II difficult to keep their
issues within rtasonaoles limits, slim dated.
IS hey would have been, 10 Issue freely by
the necsssIties OF The Government and the in
cTeasing demand for money. which is always
the r. ult OF An increased supply, the former
would have poured out their irredeemable
promises until distrust created pan ic and panic
disaster. That the National Banking System
with It's limred ard ured circula lion and
It's restricted provisions, by supersediup the
State systems, has prevented q finau cial cri-
Els there can be but little doubt For this N is
ehtitieo 10 credit; ana for this and for other
reasons suggested 1t should be sustained until
a better system shall he devised, or the coun-
uyls in CONDITION TO dispense with banks of
iss ne altogether.
The arguments IN favor Of compelling the
Ranks 10 retire their notes and Welding the
field TO the notes of the Gro vernm ent are based
upon the suppo'ition that If three hundred
millions OF United States notes were suhsti-
tuted Tor the three hundred millions of Ma
tionai Bank notes now IN circulation the
Government would save some eight teen mil
lions OF dollars In interest which lis now a
sra,sIty 70 the banks. That there would be no
SUCH saving. nor any saving, by the proposed
SUBSTITUTION Is clearly shown by the Comp.
uoller OF the currency, in ms ACCOMMODATING
report, TO which the attention OF Congress is
es peciaily asked. II an account We're opened
with the banks, and they were charged with
the interest on 100000, 90, and the losses sus
tanned through those that have tailed. and
credited with The interest on the United States
notes held by them as a permanent re ,erve
With tho taxes paid by them 70 the Government
and The States, and with commission cover
ing only what has been saved in trapsferr,ng
Al disbursir pub bile money 1t would be ascer-
tanned that the banks Were not debtors to the
United States. II Is not necessary howexer
for the Secretary to dwell on This point. as MS
main objection 10 the substitution would moi be
removed II saving OF interest would be effected
ny IL Regarding as be does the issue of the.
I ni'ed States noes IN the first in stance as hay
ing be- ID mtsfor and their continuance
rs circulating m.diUm unless the volume
snail BE- steadily reduced. as fraught with ms
chiei. the Secretary can conceive Of no cir
{ ums apces that would Justify a further is
sue These deprecated but legal. tender notes
notw ibis IA noIDg the REQ uction that has tak.n
place, still stand in the way OF return 70
specie paymen substitution Of hem for
bank notes would b. regarded by him and nv
he country as declaration that resumption
had been III d. finiteIy postponed IL those now
Outstanding should be retired a. the rate or
only four millions per month, the amount
In acsual circulation Will soon be so re-
1uced that they may not seriously re-
ard the restoration of the true meas
nre OF value. If, on the con irary, under anY
preiencs, or for any puIpose Whatever their
' olume should be increased, especially IL thev
should be made he sole paper circuIatioT
Il he country, false measure of value will
be continued, speculation will be stimula,ed.
industry will decline, and the great risk he |
incurred that financial health will onIy he |
obtained by revalsion, the effect of winch
npon the material interests and credit of the
country no one can estimate Such a revuI
sion the Secretary IL most nxious TO prevent |
and he therefore cannot approve the proposi
ion o: substituting the notes Of the u nitad !
STATES for those Of the National Banks but I
'ecomme Ids that the policy OF contraction he |
continued. The apprehens ion that this policy /
will embarrass healthy trade is in his ludg
nent announced. Leeitimat e business has NOT /
suffered by the curtailment which has taken
place within the last two years, nor Will il !
perm5 nehtly suffer by such a contraction prn
IDENTIFY enforced, as may be necessary 10 bring
he precious metals again into circuIation, /
W hat business requires is q stable currency