The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1867-11-16
SPIRIT OF TIE PRESS.
EDITORIAL oPINIoNs OF THR LEADING JOURNALS
UPoN CuRRREF ToFIos-CoMPmBD EvRRH
DAT PoR THR EVENING TELEGRAPH
The National bank currency.

From the N. y Nation.
The approaching session Of Congress is likely
TO become memorable for the number OF imam
cial measures submitted to its discussion. The
questions Of currency contraction, OF payment
of the national debt, of further greenback
issues, and Of the substitution of greenbacks
for the notes of national banks, will all be
brought up for decision at an early day; but
unlike the many financial measures passed
during the last six years. those now to be
brought forward are being discussed in advance
Of Congress, and there is q fair chance that we
shall thus be saved from further legislative
crudities such as now afiliCt us. The National
Bank act is one of the many specimens of the
laundering legislation sometimes extracted
from Congress by ignorance, cupidity, and
party zeal. Under the provisions OF that act
many honorable men have organized national
banks in all parts of the country, and have
Invested in them time, money, character, and
ability. The investment has generally proved
very profitable one, mainly owing to the
privilege given to these banks to issue paper
money, the now well-known national bank
currency.
This currency was at first very popular
everywhere, but latterly public opinion has
somewhat changed, and it has come to be
very profitable to the banks, is also very ex-
peusive to the people: hence the proposition
recently made, and certain to be urged upon
Congress, to substitute greenbacks for the
national currency, seems to be received with
almost universal favor. 1t would seem natural
that the owners Of national banks should feel
aggrieved at an attempt to deprive them of
valuable privileges conferred upon them by
law, and should use every legitimate means to
defeat it.
Stripped of all technicalities, the case stands
precisely as follows:-When the greenbacks
or United States currency were first issued it
was generally understood that they were a
temporary expedient only, that they were, in
the phraseology of the times, emphaticaIly
'war measure" and that with the end of the
war the existence of the greenbacks was to
come to an end likewise. An irredeemable
paper currency was entirely antagonistic to
the general feeling and judgment of the coun-
try; and although, in the total absence of all
currency at the time the act was passed, the
legal-tenders or greenbacks were received as
an inestimable blessing, yet there has been no
time since when the sober thought of the peo-
pie has not looked upon them as intruders to
be expelled as soon as possible, and has not
reverted with natural longing to the promised
return to specie payments and a currency
redeemable in coin. This desirable result,
among others, it was thought could and would
be obtained through the national banks.
They were to be allowed to issue bank notes
or currency to the amount of three hundred
millions (the amount of currency which it was
supposed would be required in times of peace),
and these notes they were bound to redeem on
demand in 'legal-tender' currency. AS long
as there were greenbacks in circulation, the
national banks could redeem their notes in
that kind of "legal-tender." But the supply
of greenbacks was to be, and is now being
rapidly reduced by contraction; a time will
will 1a
greenbacks out, and then the national banks
will be compelled to redeem their notes in the
only kind of "legal- tender" left, viz: gold and
silver coin, and thus specie payments were to
be restored In order to have ample security
that the banks would, according to agreement,
redeem the notes so issued when called upon,
they were required to purchase and deposit in
the Treasury at Washington an amount of
United States bonds equal to or a little larger
than the amount of currency they were allowed
to issue. These bonds of course belong to the
banks, although temporarily pledged to the
United States Treasury, and the interest accru-
ing on them is regularly paid to the banks, as
1t would be to any other owner. There seems
at first sight nothing Objectionable in this, but
there is nevertheless much.
The original founders of a national bank
contribute in greenbacks capital of a million
Of dollars. With these greenbacks they buy
million of bonds; the bonds are deposited in
washington, Wnere they draw Six per cent.
interest in coin or seven per cent. interest in
currency. The bank thus secures six or seven
per cent. interest on its capital, the same as
any other capitalist who invests his money in
bonds; but the bank, in addition, receives from
the Treasury million of national bank bills,
which are money in all parts of the United
States, and which the bank can loan in Wall
street or anywhere else for another seven per
cent. per annum. 1t is evident that capital
invested in national bank gets double rate
of interest-one seven per cent. from the
people who borrow its bills, and another seven
per cent. from the United States Treasury
for interest on the bonds deposited with
it. The seven per cent. paid by the Trea-
sury is, of course, paid by the people at large,
and it is this interest, amounting TO over
twenty millions of dollars per annum, which
ii is proposed to save by substituting green
backs for the notes of the national banks. If,
instead of selling to the national banks the
three hundred millions of bonds against which
they are authorized to issue their currency, the
Treasury had in the first instance issued threC
hundred millions of its own currency-green.
backs-it is evident that there would have
been no more currency out and no less than
there is now; that the total of the nationa
debt would have been no larger than it is now
but that three hundred millions more of tha
debt would have been free of interest instead
OF costing, as they now do, over twenty mil
lions OF dollars annually, which are takeI
from the people by taxation, to be put in the
pockets OF the national bank stockholders
TINS is the great error, the great wrong. O.
the National Bank act, and the all but unaui
NOUS voice OF the country demands that the
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