The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1867-06-14

The national banks are gross fraud upon
the public in two ways-a double fr aud first
upon the people individually, who are induced
to believe they are all safe because they are
called national and have sort of connection
with the government; and next upon the peo-
pie generally, because they hold privileges
and appropriate large amount annually that
| belong to the people and the government.
Let US explain: First, with regard to indi-
viduals doing business or depositing with the
| national banks. The mass Of the people are
not aware that these banks are no safer and
afford no more security for deposits or bust
ness transactions than any other banks or COM
mercial and business establishments. They
suppose that these associations, being invested
| with national character and name, and the
| government undertaking to redeem their cir
culating notes, must. therefore, be safe. But
individual depositors, or individuals doing
business with them in any way, are just as
liable TO be cheated as they would be by the firm
| Of Smith, Brown & Jones. The government
| il not responsible, and cannot afford relief to
| tho victims. They are not so safe, in fact, as
| the old well known banking houses were, for
the reason that these had long established
credit and carefully guarded their reputation,
| whereas the national banking associations are
newly created, and many of them are composed
| of or governed by mere Spectators. This has
been seen by the failure Of the national banks
at Washington, New Orleans and other places.
| There the people have realized the rottenness
and insecurity Of these institutions; but else
where they have yet to learn, we fear, from
bitter experience. In plain words, the whole
system is fraud. The government, by giving
the banks . national name and character,
and by fostering them b really playing con-
fdence game and cheating the public Even
their circulation could not be redeemed by the
government in great crisis or general smash
up, Notwithstanding the assurances Of Mr..
Comptroller Spinner or Mr.. Secretary McCul-
loch to the contrary.
But the national bank system is q fraud upon
the people generally-upon the country, be-
cause it takes over twenty millions year in
profits on o circulation which private COM
panies ought not to have. The currency is the
money Of the country, and should not be issued
by the government for the benefit of private cor
porations. The profits Of this circulation belong
to the people and the government; yet they are
| given away to the individual stockholders and
managers of the national banks Such boon
is not conceded even to the Bank of England,
Notwithstanding all its valuable services to the
State. The British government takes two
thirds of the profits Of its circulation not repre-
~ in ia Ia In Nth
country has the government reoklessly given
away such vast privilege without any con!
sideration. Nowhere has the mass of the
people been so defrauded for the benefit of a
favored few. II is the greatest Anomaly in
republican country. We are surprised that
such an act as that creating the national bank
ing associations ever passed or is permitted to
remain in force. There is no parallel to such
stupidity and extravaganza on the part OF
government. Tho people are bowed down
with the weight Of debt and taxation, both
federal and State, and the revenue of the gen.
eral government is declining to such degree
that we are threatened with an increase of
debt; yet we throw away over twenty millions
year. Such stupidity and recklessness would
be hardly credible If we did not see it, And
how simple the remedy Just withdraw the
national bank currency, issue legal tenders in
its place, and with these buy up and cancel
three hundred millions Of in.erest-bearing
bonds. Thus we should have better, safer
and sounder currency, without increasing the
volume ofit--a truly national currency-and
should save twenty millions year by the
operation. Are we not right, then, In saying
that the national bank system is fraud upon
the country?
Still, these are not the only evils, great as they
are, connected with the system. The facilities tor
cheating the public are such that We may expect
| q general collapse before long, and universal
bankruptcy and ruin as the consequence. The
| failures We have referred TO and noticed from
time to time, as well as the condition OF the
banks generally, indicate what is coming. They
| are. too. the great maelstrom which draws in
| and absorbs the profits of industry. Their
dividends and SURPRISES are hardly less than
| hundred millions . year. The dividends Of
some of them run up to from twenty-five to
sixty per cent This, however, does not
strengthen or make them more secure gener-
ally, because they run into speculation, and
must In the end, exhaust the means of the
people. The system is great bubble, like the
grand South Sea scheme of Law in the last CEN
fury, which, in time, must burst, bringing ruin
and bankruptcy In Its train. But in addition
to the evils Of this monstrous monopoly to
which we have advcrtcd, IL is gigantic politi-
cal machine, threatening the institutions Of the
country and liberties Of the people. Broad
and comprehensive as our republican system
is, resting upon the whole people, we are aware
| Of the danger that lies in the combined power
OF such an enormous capital. There is no
doubt that the founder OF the national banks,
Chief Justice Chase, deliberately calculated the