New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1867-10-25

country here or anywhere else9 Stars and
SfyjDeS. virtue and honor forbid
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JAY COOKE on THE NATIONAL B1NKS.
The letter of Mr.. Jay Cooke on the National
Banking system states facts which, unless the
statements themselves can be shown to be
false amount TO a conclusive demonstration
that the National Banking system is far better
than either the old State banks or any device
which Mr. Pendlcton and his set have pro
posed as a substitute.
Beside the familiar fact that the National
Banks substitute a uniform and safe currency
acceptable everywhere, for heterogeneous and
insecure one, doubtful everywhere, Mr. Cooke
makes the following points, viz;
That the National Bank notes are even safer
than the grcenbacks for, while the latter are
the nations promises to pay, unindorsed by
any special pledge of private capital, the Ma
tionaI Bank notes are the promises to pay OF a
private corporation of capitalists, Endorsed by
the nation; so that nOtIOnly the National credit
but the property of the bank, and the personal
responsibility of its stockholders to an amount
canal TO their stock, are pledged for their ne
dcmption.
That where National Banks have failed (of
which failures there have been only nine In
alb their notes, instead Of being worthless,
have been worth from two to five cents pre-
MUM, owing TO the fact that new banks, de
string To have the privilege of issuing circula-
ting notes, and being prevented from dong so
by the fact that the entire three hundred MI
lions, authorized by Congress to be issued, had
been exhausted, have bought up the notes OF
the failing banks at premium, III order 10
succeed to their privilege of circulation.
That the $1s,OOO,0OO per annum OF interest
which the Government pays the banks on the
amount of bonds it requires to be bought ana
held Inv them. il no favor 10 the banks, and no
loss to the Government. which would nave 10
nav the same to whoever else should hold the
same bonds if they were not held by the banks.
That the policy OF having the Government
issue crcenbacks enough to take up the bonds
held by the National Banks would only con
vert the Treasury into an old-faSmoncd United
States Bank, with the greenbacls rs currency,
and with its branch agencies in every town,
thus concentrating into one the power which
is now divided among 1000 banks.
That the objections against allowing National
Banks to issue circulating notes would apply
the latter could not be.s0 secure OF uniform,
without requiring them TO put up National
bonds on which the Government would pay
them interest, as it now does to the National.
The real question, therefore, Is, whether we
shall have any banks or banking system mt att,
or whether all such institutions shall he de
stroyed except one vast Greenback Bank at
Washington.
That il is untrue that the National Banks
receive Sis,0O0,0OO of annual interest from the
people on their S3OO,OO0OOO of circulation, as
alleged that the law requires them 10 Keep
i'm reserve 20 per cent of their circulation, OF
$50, 900, and a further amount equal To %
per cent of their deposits (Sj;l 0OO,OOO)-say
$4,000 0OO-making a total reserve of S2iO,-
100000 This, deducted from the S3OO,OOOOOO,
leaves only Sl2G,OOOOO0 available for circula-
ton. on which the banks make ak per cent,
or $7,JCO,OOO. But against this apparent profit
must be offset the taxes they pay to the Ma
tional and State Governments, viz:
One per cent circulation. 100000
Half Of one per cent on deposlis .-- 49o'"Op
National tax on capital stock not invested IN the
Half Of one per cent on dividends and .urpus 100000
License OF s. per $1,000 Of $4,000
State and local taxation as returned 100000
tlsloooCO
Deduct interest actual circulation 100000
And there remains balance. $40. SAB 900
which is paid TO the Government by the banks
for the privilege of existing, an amount which
must reduce to no ninal point or entirely
cancel the interest which Government pays
them on the bonds they are required to hold.
1t is further shown that as many of the Ma
tional Banks are organized and controlled by
Democrats as by Republicans, that they are
conducted on purely financial motives by men
of both parties, and hence that they are wholly
unavailable to any party for political purposes.
If these are the facts, 1t is plain that, what
ever reforms the National Banking act may
need, they do not consist in substituting green
backs for the National Bank notes. nor in abOl
ishing the National system. We lay no stress
on the point, however true, that the National
Banks aided greatly in borrowing money for
the Government to carry on the WARM part
because business operations are usually made
mutually profitable and are not therefore
deemed to confer obligation or to require graf
itude-but mainly BECAUSE gratitude is an emo
ton seldom manifested toward men, and never
toward financial corporations.
If we have any doubts relative to the per
lection of the National Banking system, they
are directed toward points not covered by Mr..
Jay Cookies letter We have doubts whether
a system which allows corporation to issue
paper dollar upon depositing Government bonds
worth only sixty-eight cents in gold, does not
tend to delay rather than to aid a return to
specie payments. Obviously, were it not for
the clause limiting to $3000O0,0OO the number
of these paper dollars issued on basis OF %