The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1868-03-03

"ne vi 'nei esseut'ai functions, IN maintain
, ing the equiyalency of their notes to specie
1t does not seem honest that they should re-
ceive pay for doing 1t. The banks owning a
number of United States bonds, let us saw
amounting to 100000 coo, bring them to the
Treasury the United States, and deposite
them. They ask that the amount Of them be
advanced in money. The United States say
we have no gold and silver, but we will
give you something which we will guaranty
shall be paid, which we will receive and pay
out as cash for debts, loans, and salaries, and
which by every power OF legislation we will
make equivalent TO money They according
ly pay the banks $270,00 900, Of the amount
OF the bonGs. The banks receive, pay, and
loan this sum as money and keep 1t thence
forth, It being received every where as the
equivalent of money and the instrument OF
purchase and payment.
Why should not a payment of nine tenths
OF the bonded debt by the obligees stop nine
tenths OF the Interest of the bonds? Is II Just
after payment OF debt for the creditor to ex-
act perpetual interest on 1t, as though it had
not been paid? lfthe United States had ad-
vanced upon the bonds S.300,0JO,OO0 of gold.
which the obligee on the bond was to have,
spend, loan or invest at his pleasure, would
not the debt be paid and interest stop? But
is not the currency furnished so long as the
payer makes good his guaranty that 1t shsll
be money equally payment? Was it not in
fact of equal value not only with the actual
consideration Of the bond, bat with the debt
secured by the bond or at the very least is it
not at sonaejust rate of discount, to be ac
counted for by the party receiving it, as an
instdtnaent OF payment and fol eclosing OF
interest pro tdnto? The continued payment
OF interest on so much of the amount due up-
on the governm ent bonds as is paid by the
circulating notes, that is nine tenths of the
amount, is entirely without consideration or
equity, gratuity for which the government
receives no equivalent whatever. The alb
surdily OF such an arrangement would be less
giarinS ii the banks bad fulfilled or been in
condition to fulfill, or held out any encour-
agement to fulfil at ? definite future time the
ostensible stipulation, for which the eratuity
is paid, that Is the redemption OF the circu
latins notes in coin. Until they do that, the
interest upon the bonds should not be paid, at
least upon the sum actually paid.
The justice and economy OF the continued
payment of this interest Is maintained upon
the following grounds. d.
l. The banks laid the government under
great obligations by purchasing so many of
its bonds. The banks lid just what other
capitalists did, who had money to spare; they
invested in the best securities and at the
highest rates the market afforded. They lad
the sagacity to see that it was the admirable
bargain for them, which it has turned out.
They entered upon it with the more alacrity in
that they found they had this preference over
other capitalists, that whereas the latter upon
paying the United States a thousand dollars
for United States bond of that denomina
tion have not since seen their thousand dol
lars and have not cheerful prospect of see
ing it very soon, the former who nav
a thousand dollars for just such bond.
Immediately present it and receive nine hun
dred dollars OF the amount, and yet continue
to receive the same interest as the man who
has not been paid at all. They eat their cake
and hare their cake, feat unfavored credit
ors have not found out how to perform. The
only hesitation of the banks in coming into
an arrangement so profitable to themselye
must have been from such doubts as sobe
business man would be likely to have that
money would ever be borrowed by any person
upon such hard terms, or from anticipation
that this part of the bargain would be made
more equal between borrower and lender as
soon as the former could Iecoy er his presence
OF mind, disturbed by his pecuniary necessi-
ties.
2. The national banking system Is pat
termed after that of the State of Nep York,
and interest is payable upon the government
bonds just as eQuitably as upon the State
stocks. in which ,he capital of the Nesu York
banks acds incested. The transaction in the
two cases is essentially different A State
has no power to create circulating medium,
being prohibited by the Constitution from
emitting bills Of credit. 1t cannot therefore
substitute its own notes for those of the
banks. The State of New York does not
supply the currency used by Its banks to do
their business, nor guaranty its payment nor
make 1t legal tender, nor agree to receive it
for the State dues. The State merely makes
itself trustee of so much OF the capital of
the banks as is invested in its own bonds,
which 1t stands ready to pay, principal and
interest according to their tenor, and en-
dorses notice OF this security upon the bills
issued by the banks. l5ra srcJ .5tsaelf t'
But the general government has power,
the power which it has repeatedly exercised,
of issuing circulating notes. 1t has issued
in competition with the national bank cur
rency its own demand notes, and made them
| legal tender, and maintained their currency
by law. 1t had no necessity of resorting to
the indirection by which the States evade the
| prohibition OF the Constitution. ~5
The general government does in fact not
| only legalize, naonetize, and endorse in ad-
vance the currency it furnishes to the ma
tional banks, but it mechanically creates il.
| All its credit. exchangeatility and intrinsic
value spring from this endorsement and
| from the security of the bonds held by the
United States for its redemption. The banks
that were to have redeemed the circulating
notes ou presentation, 1t was we'll known
| could not do 1t, and SO could have given no
credit whatever to them by their own pron:-
ises OF payment. The public receive the
notes solely upon the faith CT the United
States, without caring to notice what banks
issue them. So little is the guaranty of the
bank esteemed, that, In several instances.
the only effect, the total failure OF the bank
| giving 1t has had, has been to make its notes
in request at a premium by the rule of
arithmetic that Increases sum from which
minus quantity is subtr.cted.
While then paper currency may be is
sued directly by the general overnment,
while the clumsy contriSance of guaranty
by corporations, that 1t was known could not
perform this guaranty when given, and have
since been in no condition to do it, has only
tended to discredit the national bank bills,
why should not the government have the
profit derivabe from an issue of money of
which 1t is both the maker and the respon-
sible guarantor? 4@ GET.
| .# ..
school hook s.Uniformity.o -.-
The proposed new school law before the
legislature, ostensibly aiming at uniformity of
text books, bears ON its face such an appear
ance of fairness as at once to invite co-opera-
tion from, all nersons NOT fuIIv oonya,ea,t