Mineral Point tribune. (Mineral Point, Wis.) 1869-1938, 1869-12-16

under The guse OF deposits, by the oheT 10 pay In
terest on them. This practice, however. prevails
extensively and although by implication, The law
f0rbids It, the prohibition Is not sufficiently explicit
or positive to prevent IL. II banks pay Interest On
these deposits they must ofcourse use them and
az they are payable on demand, they must be loaned
on call. Call loans, as rule are made to brokers
and operators In stocks ond gold. Men engaged in
trade cannot ordinarily afford to borrow money
which they may be called upon to refund at an
hours notice The facility with which large loans
can be effected payable on call. at low rates OF in
terest while commercial paper Is only done at high
rates is declined altogether, fosters speculation
The delegation by the government to banking as
sociations of the power TO issue notes to circulate
as money has tendency to lower the rate ofinter.
est and so to furnish cheap money ~ the business
community. The incorporated fdnh, doing bust
ness and issuing circulation un1er the authority OF
the government, IL uniformly regarded as the mosf
reliable and reasonable source Of accommodation
by the business community. The private banker
depending upon the active use of his capital for his
profit, must charge much higher rate OF interest
to realize the same relative profit, supposing OF
course tnat the deposits of the two institutions are
equal. The government, therefore. confers great
er Doc upon the business public, by enabling il 10
borrow money at moderate rates OF interest than Ia
generally realized or admitted. II all the banks
were deprived of their circulation during the COM
ing year, by act of Congress, the rates at which
money could be borrowed in most sections of the
country would be nearly doubled. The assumption
by the government of the sole power to Issue circu
The average dividends made by the banks dur
ing the past year will probably not exceed ten per
cent upon their capital after deductng taxes and
expenses. And ar the premium on gold shall d.
minish and the National Banking system shall be
made free to all who are able and choose TO comply
with the conditions, the average profit will conform
to the law which governs all business. Il win be a
fair living profit and no more.
There are two kinds q currency IN use one is
sued directly by the Government; the other
issued by the banks One kind would seem TO
be enough. The best should be preserved and per-
fected; the other Withdrawn. The very moment
the government issues are made redeemabie, they
will cease to answer the purpose of currency; for
after they are redeemed, they are in the treasury
and cannot again be paid out, except upon appr0
priations made by law, in accordance with the con
stitutional provision, and consequently cannotagap
be put in circulation, except as disbursements may
be necessary to pay expenses and debts of the gov.
eminent SO that Government circulation is con
vertbe and therefore is not elastic, and cannot be
made SO without first making radical change fH
the organization Of the United States Treasury, by
which 1t should be converted into huge banking
institution calculated to receive deposits. make
loans. and otherwise perform the functions of Ma
tional Bank.
The notes issued by National Banks are nominal
ly redeemable and. if the legal-tender notes were
out of the way, would be actually so, and, being
issued by institutions in sympathy with t-ade would
contract and expand in obedience to the law ofsup
ply and demand so that they would also possess
the element OF elasticity.
As to the comparative merits of the two different
kinds of currency, an impartial consideration
would probably decide in favor OF bank circula
ton principally because ii would possess the power
of adapting itself to the exigencies of trade. II
government issues could be made to possess the
same power of adaptation, the verdict would be in
their favor. A candid investigation however cannot
fail to develop the fact that there is no branch Of
the fiscal service adequate to the direct issue and
care Of such a currency as the country requires.
The Treasury system is so arbitrary in its collec
tons and disbursements, so little IN harmony with
the business interests of the community, that il
frequently absorbs large amounts of currency Al
most inogportune seasons, and dsbrrses them with
Just as little regard to the wants of trade.
SO long as the collection OF revenues Is liable to
be process of contraction, and their disbursement
a process of imitation, the agencies through whics
collections and disbursement. are effected cannot
be regarded suitable agencies for furnishing 4
sound currency to the people.
The argument that the government should fur
nish the currency in order that 1t may realize the
profit upon its circulation is common one, but viii
not bear scrutiny There Is no profit TO the govern
ment on the circulation of an inferior currency.
Only sound currency win promote the material
prosperity of the people: and the government can
realize no profit from anything detrimental to their
interests As a currency therefore, government IL.
sues are not profitable. A a loan without Interest
they are equally Improbable, because they are
injurious to the national credit, and add enormous
| ly to the expenses of the government
If, however, it is impossible for the government
to comply with the conditions necessary In order to
furnish sound currency 1t can at least provide for
the withdrawal of Its own notes, and prescribe the
conditions upon which. and the agencies through
which, better currency may be provided Az be-
fore stated there should be but one paper currency
! in the country. and that should emauate from
| source that Il influenced by, and is amenabe to.
the laws Of trade. No check or limitation should
be imposed upon It. other than the law OF supply
and demand
FREE BANKING.
self.adjusting currency is the only one
that Is adapted to the eXigences OF trade, and 10
! the wants Of the country; and il il vital
question at this time. whether this result
can be reached before the reum OF
specie payments. If possible at all, II is
only possible through the agency Of the National
Banks The machinery Of the Government is not
adapted to such ends And further, possible il
isonly upon the adoption of policy which will
tend gradually but surely to resumption Of specie
| payments II must be the gradual development Of
process which shall absorb legal tenders ard put
in their place paper currency which shall at all
times and under all circumstances be exchangeabe
for COIN either of paper. illegal tenders or Of gold
"a paper currency which shall gradually increase.
while the legal tenders for its redemption shall gra
dually decrease, in such ratio a healthy demand
for banking facilities may determine
Where banking facilities were already abundant
there would be no inducement for the establish
ment of banking institutions for the issue of cur
rency upon conditions that would inevitably d.
minish the volume of lawful money applicable 10
Its redemption, and so gradually, but surely, en-.
nance the cost of such redemption; while in other
sections destitute, in whole In part, of banking
facilities for the legitimate demands of business,
tue necessity for banks and currency would Justify
the increase Of bank circulation, Notwithstanding
the TACT that by such increase the burden OF its re-
demptlon would also be enhance.
The entire South and many portions of the Wes;
are very much in need of the facilities and adyaD-
lages TO be derived from properly organized bank.
ing institutions, and their necessities would Justify
them in deliberately adopting measures to supply
their wants. the direct tendency of which would be
TO hasten the return OF specie payments In the man
ner indicated, to-wt, by t. increase of bank notes
and the absorption of the 49, ''-tender notes AZ
the former increased, the latte. would dimiE-
lsh As lawful money became scarce,
its value would be enhanced, and would
gradually approximate to par with
gold Thus specie payment may be reached
through the agency of the National Banks and by
the operation OF natural causes. The process VIII
not be rapid or spasmodic because il viii in all ito
stages, and in all It's details be governed by sound
principles and conform 10 established laws Az
the "a ne time, the benefits and advantages of the
National banking system would gradually become
more equally difused, until all sections would a.
length get their Just and equal share apporiOnet