New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1867-12-04
Why WE PREFER THE NATIONAL CUR

The issue between the National Banking
system and none at all or, as it is called, be-
tween The National Banks and the Greenbacks,
is ably discussed in the Reports of the Secre-
tary of the Treasury and Controller OF the
Currency, published in this issue. The question
has already been brought forward in Congress.
We ask the members who are solicited to vote
for abOlishing the National Banks to consider
well few propositions, viz:
l. The point that they receive double in
terest on their capital, VIZ: One from the Gov
ernment on the bonds they deposit as secur-
ity. and another from the community on their
circulation, is incidental to any banking system
that ever has or can possibly be devised, and
arises from the fact that they make double
loan Of their whole capital, viz: once to the
Government (fOr which they receive the bOnds),
and once TO their customers, for which they re-
ceive the notes and other obligations of the
litter Suppose therefore the National Banks
abolished, the same fact would apply to any
new banks that might be started on any possible
system. If the new banks should be founded
ON bonds of the several States, as under
the old State system, or on bonds OF
individuals, secured by mortgage, or on bonds
of cities or railroads, or any other form OF
security. each bank would still collect one In
tcrest on the security which it deposited with
the State or National Government, and another
from the customer TO whom it loaned its paper.
Can anybody doubt that if the National Banks
should be destroyed, some kind Of State Banks
would Immediately spring uDg Would not
these State Banks be safer, if based on Gov
eminent bonds to an adequate amount, than II
based on State bonds, individual, railroad, city
bonds. or any other form of security? And ii
based on Government bonds, would not the
Government pay them one interest and their
customers another just as they now do IN the
case of the National BanksY Since 1t Is IN
scparabe from the banking business (unless
we allow banking to be carried on without
giving the public any security for the redemp-
ton Of the notes issued that the bankers shall
make two loans of their entire capital. and so
get two interests, is there any plan more
economical to the Government than to have
them loan their capital the first time to the
Government, pay them the same interest on 1t
that the Government pays to other creditors,
and then collect the interest back in taxes as
high as the banking business can afford to pay
This is precisely what is now being done. The
taxes paid by the banks offset the interest they
derive from the Government, leaving to the
banks rs a source of profit only the one inter
est paid them by their customers, and the incl
dental profits of the collection business On
this basis. the average dividends of the Ma
tional Banks will not exceed this year from 10
to IL per cent which is the minimum upon
which business involving the risk and skill IN
II L.,
IL. But it is asked, e" How can the National
Bank currency be preferable to the Green
back, when it is redeemable in the Green
"back!r We answer, if by preferable is meant
bearing q premium in the market then moth
ing can he preferable to legal tenders Aud. so
long as legal tenders and the other promises
of the Government are worth only 6S cents on
the dollar, National Bank currency or any
other paper money cannot be worth more.
But legal tenders are n forced loan'-a
sort of legal robbery, adapted only to a
state of war. They do not constitute a
paper money currency, permanently secured,
and adapted to Il state OF peace.
The National Bank notes do. There
is nothing of the character of robbery or force
about them. They are not deprecated Govern
ises They are well-secured promises to pay
dollars y and the fact that those dollars "
,can be paid in legal tender worth only IS cents
is the fault of the typhoid condition of the
Government credit, not the fault of the Ma
tional Banking system We must have some
banking system adapted TO condition OF
peace The legal tenders are no banking sys-
tenn whatever. but forced loan. They have
no self-iegulatng expansive and cOntractive
power adapted to the business wants of the
community. Any paper currency. to deserve
the name, must bel. Secured; g Redeemable.
Grecnbacks are neither. They are q standing
advertisement that the United States are in
solvent. The National Banking system will
furnish MS r currency both secured and re-
dcemable in gold, 80 soon as the Government
and the country shall return to specie pay
ments. It is impossible to do it before.
III. We do not claim that the National Bank
ing law is at present perfect. There are some
features about it which we think do undesign-
edly retard return TO specie payments.
We have already suggested four amendments.
viz:
l. Let the banks be required to deposit
bonds IA security for their circulation, the
gold raluc of which shall mt all times exceed
by ten per cent the amount of their circula-
ton.
.. Let them be required to keep q reserve
either in gold or lawful currency, the gold
ualue of which shall bear the same proportion
about 90 per cent? to their total liabilities as
their present reserve bears in ereenback value
to their liabilities.
g. AS the above amendments would place the
National DanLino sv etarn on a baaiS of sDecis or