The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1867-02-16

augur well for the early future. The cloud
which now rests upon business must soon pass
away. The sun Of prosperity win soon begin
to shine upon us and the prudence which our
men of business are now manifesting warrants
the belief that in future the trade of the coun-
try will be made to rest on frmer foundations
than ever.
Oar National Banks and tho Bank Of Eng.
land.
Mr.. Chase and those who assisted him In con-
cocting our system of national banks had in
view, we suppose, several objects The prin-
cipal we're to centralize and give uniformity or
to establish general and national system of
banking to assist the government in time Of
need, as in q great war such as We lately
passed through, and last, though not least, to
create vast 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
model.
Our old banking system, which was author
ICED by the several States and rested in
measure upon the State rights doctrine, was
deemed defective, lacked uniformity and was
thought no longer suitable to the changed con-
dition of the country produced by the war.
There were many defects, doubtless, in the old
system. az in the unsubstantial character of
many of the banks, in the facility afforded for
starting what were called wild cat banks"
| and in the inconvenience and loss caused by
| the discount on bank notes Of one section or
locality when they passed into another. Then
the war, with the legislation of Congress
during its existence and since it terminated,
have swept away States right theories and
have centralized and natonalized the institu-
tons of the country. Abanking system, there
fore, In conformity with this change was
considered necessary. We needed one,
it was thought that would be ma
tional 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
actirity in the internal business Of the coun-
try, required larger amount Of circulating
medium. which could only be properly and
safely supplied them in the form OF currency
by the general government.
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 dangerous monopoly, and to prevent
on the other the. government being burdened
with the management Of banking affairs. With
view apparently to accomplish these objects
Congress established the national banks. The
question was 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 1t rich mine of wealth for
themselves. He doubtless saw in It also q
vast political machine by which he might be
carried TO the White House. The people in
the meantime knew nothing Of these motives
and we're ignorant of the nature or what would
be the operation and effects Of the national
banks. This bank system was q new thing to
them, and not understanding II they SUBJ
mitted quietly to its establishment Thus 1t
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 q are any Of our mining or manufhctur-
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 It does this, too, without deriving
any profit or advantage whatever from their
circulation or business, from loans or In any
other financial way. The advantages are all
on one side-on the side Of few thousand
stockholder.
As the authors Of our national bank system
seemed to have in view the Bank Of England
when they formed 1t, let US compare one with
the other. The Bank Of England is also
private association or corporation. Still 1t has
an intimate connection with and renders very
important services to the government In this
IL Is unlike our national banks which render no
services to the government 1t has grown up
to It's present great power, wealth and inHu-
ence through long period Of existence and
through many changes and perils. Il has
become adapted to British institutions, charac-
ter and mode Of business. II would not be
adapted to our institutions, habits of
business or social condition, and there is
reason to doubt As TO its being any longer
useful, % at present constituted and managed,
In promoting the general welfare Of the
English people. One thing Is certain, which
is, that the financial and banking system Of
Great Britain, Of which the Bank of England
Is tho foundation and centre, has reduced the
masses Of the people to the point Of starva-