The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1867-02-18
Dur NATIONAL Banks and the Bank OF
England.


h view, we suppose, several objects. The
principal were to centralize and give uni
formity, or to establish general and national
system of banking to assist the Government
in time of need as in . great war, such as we
lately passed through, and last, though not
least. to create a yast political machine for
partisan and individual purposes. The Bank
of England and other great national banks,
but chiefly the Bank of England gave the idea,
although none Of these institutions was taken
as q model.
Our old baking system, which was autho-
rized by the several States, and rested in
measure tpon the State-rights doctrine, was
doorad affective. lacked uniformity, and was
fbouobt 10 longer suitable to the changed con
ditio1 of the country produced by the war.
SFbara were many defects doubtless in the old
evrat,n as in the unsubstantial character of
many Of the banks, in the facility afforded for
etarfinf what were called wildcat banks, "
and in the inconvenience and loss caused by
tbe discount on bank notes of one section or
locality when they passed into another. Then
4be war. with the legislation of Congress
dudnp its existence and since it terminated,
have swept away State-rights theories, and
have centralized and nationalized the institu-
4;ons of the country. banking system,
therefore. in conformity with this change was
considered necessary. We needed one, 1t was
thought, that would be national and uniform
in character. Besides, the capitalization of two
thousand millions or more OF the wealth of
the country in the form of the national debt,
together with increased activity in the internal
business of the country, required larger
amount of circulating medium, which could
NJ aI in
the form of currency by the general Gov
ernment.
The question was then, how to supply the
banking necessity of the time-how to assist
the Government, and promote the business in
terests of the natiOn-withOut creating on one
hand a dangerous monopoly, and to prevent
on the other the Government being burdened
with the management of banking affairs. With
q view apparently to accomplish these objects,
Congress established the national banks. The
question was a new one to that body, and but
little understood. Mr.. Chase, when Secretary
of the Treasury worked up the system. He
was aided by party of bankers and capital
lists who saw in it rich mine of wealth for
themselves. He doubtless saw in it also vast
political machine by which he might be car
ried to the White House. The people in the
meantime knew nothing of these motives, and
were ignorant of the nature of what would be
the operation and effects of the national banks.
This bank system was new thing to them,
and not understanding it, they submitted
quietly to its establishment. Thus it became
fastened upon the country.
These national banks are really nothing
more than private associations, working for
the profit of the stockholders alone Just the
same as are any of our mining or manufactur-
ing companies; yet Congress has invested them
with national title and character, and has
both built them up and sustained them upon
its own credit. 1t does this, too, without de-
irving any profit or advantage whatever from
their circulation or business, from loans or in
any other financial way. The advantages are
all on one sde-On the side of a few thousand
stockholders.
As the authors of our national bank system
seemed to have in view the Bank of England
when they formed it, let us compare one with
the other The Bank of England is also pri-
vate association or corporation. Still it has an
intimate connection with and renders very i'm,
portant services to the Government. In this
it is unlike our national banks, which render
no services to the Government. 1t has grown
up to its present great power, wealth, and in
fuence through long period of existence, and
through many changes and perils. 1t has be-
come adapted to British institutions character
and mode of business. 1t would not be adapted
to our institutions, habits Of business, or social
condition, and there is reason to doubt as tC
its being any longer useful, as at present con.
stituted and managed, in promoting the general
welfare of the English people. One thing is
certain, which is, that the financial and bank
ing system eff Great Britain, of which the Bank
OF England is the foundation and centre, has
reduced the masses of the people to the point
of starvation, while at the same time the few
have become enormously rich. Is it not evi
dent, then, that there is something radically
wrong at the bOttOm-sOmething which we il
this virgin and great country, ought to avoid
Our national banks have in them all the evil,
and greater ones than those of the Bank o
England, without any of the advantages to tn,
public.
But the Bank of England has paid largel,
all through its existence for the privileges i
enjoys. Parliament has never renewed it
charter, often as this has been done. withou
demanding something in return. Paymen
has been obtained sometimes by hard money
but frequently through loans either withou
interest or bearing very low rate of interest
Then the Bank manages and pays the interes
on the national debt, as well as managing tn
finances of the State for a small compensation
and at much less cost than the Government
could do that. In what way do our nationa
banks earn their privileges or the least part
them But the British Government derives
profit from the currency issued by the banl
We find it stated in the Pail Mall Gazette tht
the ''net profit on the currency amounts I
9270,0O0, of which ESQ, 600 fall to the shal
of the Exchequer and 100000 to that of IL
Bank - that is, the Government takes tw
thirds of the profit.
The same paper remarks that "the measul
of the gross profits on the issue cannot be al
other than the interest borne by the securit
which are deposited in place of gold as sec
rity for the bank notes issued up TO the amour