New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1868-02-08

| Il
taken a step in the right direction in the bill
| reported by them for amending and perfecting
the National Banking system, and substituting
| its notes for the greenbacks. The bill requires
the banks to deposit national bonds to an
amount twenty-five per cent Gnstead OF ten
per cent. as at presently greater than the amount
of circulating notes issued by them. This is
| less stringent than the measure heretofore pro-
posed by THE TRIBUNE, viz: To require the
qold ralue of the bonds deposited to exceed by
| ten Der cent the amount of circulating notes
issued. The latter would authorize the banks
| to issue 800 in notes Cat the present premium on
| gold) on depOsiting about S155 in bonds as secu-
| rity. Thus return to specie payments could not
| shake a single bank, as the gold value of the
bonds deposited could hardly fail at any time
| to be more than would be necessary to redeem
| the bills even in specie The Senate bill au-
thorizes the issue of 500 in bills on the secu-
rity of bonds amounting to 1926. This may or
may not prove sufficient; but it is a step in the
right path and, if another step forward shall
prove to be necessary, it will be easier No
sooner are the National Bank notes based on the
gold value of the bonds deposited, which is
equivalent to basing them on specie itself, than
they become secure and redeemabe beyond
any contingency and hence the limitation of
their amount to $300,00O,000 as heretofore re-
quired, becomes unnecessary, and should be re-
pealed. SO long as the banks were authorized
to issue 500 in notes on depositing bonds whose
gold value was only from $40 to $50, it was
obvious that the system tended toward infia-
ton. Any corporation which, by depositlng
$50 in value, could issue 800 i'll paper cur
rency, would have issued paper to an endless
extent, until the value of the paper had been
lost by its initiation. The 100000 900 clause ope-
rated as q cable to hold down the balloon until
sufficient amount of ballast could be taken on
board This done, the cable is no longer needed.
The ballast will cOunteract the tendency to in
flation. In other words, the banks whose notes
are sOundly based Oh specie, or its equivalent In
bonds deposited with the Government may
safely be allowed, as under our old New-f ork
and New England Banking systems, to is
sue as many notes as they thus secure. The
repeal of this hide-bound clause will vast
" increase the popularity and useful
ness of the National banking system.
1t will enable anybody, anywhere, to start
National Bank, by simply complying with the
conditions essential to safety, and thus will
remove the odious objection made TO our pres
ent system, and still more to the former
United States Bank, as a monopoly. Any in
stitution against which the cry of monopoly"
can successfully and fairly be raised can never
survive the freedom loving genius of the
American people. Our National Banking sys-
TEN has operated in some degree as a mo-
nonoly, since it, growth was hide bound 10y
reason OF the S3OOOO 900 clause, and the notes
L. 10 loy, ha oil
From that time forth, these banks were theoret
ically insecure by reason of the nsuiiciency OF
the bonds deposited by them to redeem their
bills in the event of a return to specie payments.
They were, moreover, prevented by their mo-
nopOly from being under that state OF depend
ence upon tie business community which
would make them responsive to the wants OF
the business public. The premiums received
by them upon the coin interest on their bonds,
ordinary collection business, land discounts on Sc
curties not subject to the risks of business have
afforded them sufficient means of income, and
rendered them less seryiceable 10 industry and
far less encouraging to enterprise than they
would have been had the banking system been
free and open to all. The same monopoly also
tended to make the banks more seryiceable to
their officers and favorites than to the business
community. The repeal of the S3O0,O0O0OO
clause destroys the only feature in which the
banking system was monopoly. 1t will en-
able the, West and South to have all the cur
rency they want, upon the one al-suflicient
condition of making it secure and redeemable.
1t will give the banks an interest in advancing
instead of retardingthe return to specie payments.
1t will increase the home market for bonds as the
l.. g., no hau Ia IN ha ta1 nd
currency to be issued in place of the green
backs to be retired. BY giving the national
bonds greater intrinsic utility, it will
strengthen the Government credit in various
ways. 1t will raise the price of bonds nearer
to par with gold; and, as the price of bonds is
the most potent influence in fixing the depre
citation of currency, or the premium on gold, it
WILL pari poSSu, reduce the premium on gold,
and thereby tend toward return to
specie payments. One of Mr.. Chases most
sagacious and patriotic reasons for found
| ing the National Banking system was
| to provide a business utility, and thereby an
| improved Emarket, for the national bonds, by
making them the basis of all American bank
| ing. Our present system has provided mar
ket for only S330,O00000 in bonds; yet even
this demand has added greatly to the intrinsic
value not only of the bonds secured, but of all
the others. The Senate Finance Committees
bill, fully carried out, will nearly triple the
amount of national bonds required as the basis
of our banking system, and cannot fail to
greatly advance their price, and with
it the credit Of the Government all
over the world, and the gold value
of our currency. The National Banks being
no longer a monopoly, will become more respon-
sive to the demands of business, more stimula-
tive of enterprise, industry, and prosperity.