The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1868-06-09
. NATIONAL FINANCES.
The defeat OF tne Imitation BIZ.
From the Netc York Financial ChronieI
UEue 6fb

! terday, he has little reason to complain
of the previous action of the Senate de-
featiug his bill for Initiating the cur
rency by the issue of twenty millions
sing is that this untimely and mis-
chievous project could have appeared
to the mind of SO experienced politf-
cal leader to stand the smallest chance
of adoption. 1t would involve the
giving up ofthe established policy on
one OF the most important prerogatives
of the Government, that of guarding
the currency, and exempting 1t from
dilution and arrangement by new
issues. The national cry for a sound
currency will certainly be needed so
far by Congress that no further dspre-
citation is to be attempted, nor any new
emissions of any sort of paper money,
especially bank notes.
Waving the general question of pol
icy, however, the special objections
to the bill are, first, that it does not
touch the most important defects of the
banking system; and secondly, that it
does not offer nit remedy for the evils
with which il proposes 10 deal. In il
Illustration of the last named point we
may cite Mr.. Sherman's statement that
Hsundry States in the Union had not a
national bank, while Massachusetts,
Rhode Island and Connecticut have
from $50 to $40 per inhabi:ant."
1t is no honest remedy for this
state OF things TO endow and
subsidiZe certain new Government
banks by forced loan-a forced loan
of the worst sort-that OF an issue OF
paper money. Who, moreover, would
gain the profits of this new doing out
of the national bounty? For whose
emolument does Mr.. Sherman believe
that these twenty millions of notes
would avail? Would the people at
large be benefited !? or would the whole
profits be absorbed by few specula-
tors who had dubbed their means to-
gether to form these new banks? Mr..
Sherman suggests reply to these que
ries. He says "the banks of Ohio have
loaned every dollar at their command
to New York, while they refused to the
merchant and produce dealer any
accommodation" And what does this
alleged fact prove but that the hot-bed
system OF forcing banks to grow where
the spontaneous movements of bust
ness do not produce them is fruitful in
abuses. This is but one argument out
of many by which Mr.. Sherman's own
admission helped TO defeat his project,
and the people are well satisfied to see
it die.
1t undoubtedly defect OF the Ma
tional banking system that its curren-
is unequnlly distributed. a recent re-
port showed that of the 800 millions
outstanding, l04 millions were issued
by New England, almost 20 millions
by New York, 40 millions by Pennsyl-
Vania, and 40 millions by Ohio, Indiana
and Illinois, so that over three-fourths
OF the National bank notes are issued
from New England, New York and
Pennsylvania.
How this concentration on the sea-
board originated, Mr. Hulburd tells us.
in his report Tor 1866. He describes it
as follows:
.',rhe original act OF March 70, 1868.
provided Tor mn appOrtiOnment of the
national currency 10 the several States
ana Territories ns follows: One hum
dred and titty millions according to
representative popu:ntion, and one
hundred and fifty millions according
to bunking capital, resources and bust
Tess.
This requirement was repealed by
the act OF June 3, 1864, which left the
distribution TO the discretion of the
Comptroller OF the Currency. BY the
amendment OF March 8, 1865, the clause
requiring an apportionment to be made
was re-enacted, but at the came date an
amendment TO section Z of the internal
revenue act provided that all existing
State banks should have the right to
become national banks, aud should
the preference over new organizations
up 10 the LIST of July, 1865.
"These two amendments were not in
harmony; for, if the apportionment
WAS made as required by the amend
ment TO section 81, the State banks
then in existence could not have been
converted without exceeding in many
Instances the amount of circulation APP
poriioned to the different States. But,
as ii seemed 10 be the intention and
policy OF the act to absorb all existing
banking institutions rather than TO
create new banking interests in addi-
ton thereto, the Comptroller of the
Currency soconStrued the amendments
as to permit the conversion of Stute
banks without Limitation. The effect
of this action was to make very I'M
equal distribution OF the currency,
some of the States receiving more than
they were entitled to by the apportion-
ment, and leaving but II very limited
amount to be awarded to the Southern
and some of the Western States"
In this official report we havethe
clear admission that the bank notes
have been allotted as was intended.
Who is to blame for the evil we do not
care in this place to enquire. II is TO
the proper remedy that we prefer to
confine our search. And this remedy
obviously involves the calling in of the
currency where it has been issued in
excess of the equitable allotment. Sew
eral measures have been introduced
into Congress for this purpose. The
most important was that of Mr.. Hoop
er, which proposed to call in the circu-
.lation of banks on certain established
rules. First, no bank was to be allowed
lars of its own notes. Secondly, the
smaller Institutions were to be regula-
ted AS follows: n bank whose capital
did not exceed 100000 was to issue
notes to the amount OF 90 per cent of It's
capital; n bank whose capital was from
$500, 600 to $500, 600 was allowed s0per
cent of its circulaLion; and If the capt.
cent was the limit. Much objection
was made TO this scheme, and n
modification of 1t was proposed by the
COMPTROLLER of the Currency allo wing
banks with two millions OF capital 10
receive 81, 600 of notes. Three
millions of capital was to entitle an as
ISOLATION to 81 400, 600; four millions to
81. 500, 600; FIVE millions TO $1,000. GOO,
while ten millions OF capital was to Sc
cure s., DOC, 600 OF notes.
The discussion of these plans evoked
opposition from the banks whose priv
ileges 1t was proposed to cut of, SO that
the attempt was given up, and to this
moment no practicable solution of the
difficulty has presented itself. The only
points which have been established SO
far, seem to be that the people will not
allow the currency or the country TO be
tempered with TO accommodate those
who wish TO start new banks; and,
secondly, that the existing banks,
which enjoy. currency privileges will
not, If they can help 1t, suffer those
privileges TO be taken from them or cur
tailed.
We have discussed thus exclusively
the currency aspects OF Mr.. Sherman's
bill, because it was by these chiefly
that its defeat was rendered inevitable.
We trust that If it should be revived