Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1869-02-24
THE CURRENCY.
REMARKS on non. l.. p. POLAND,

TT H"uat " NtiffafWUfttNf ffpt 10 I'Nv
Mr. Speaker the amendment which the Com
mittee ON Banking and Currency have reported
in lieu Of the fourth section Of the Senate bill pro-
yidcs for pro rata deduction of the circulation
Of the existing national banks The lowest Of the
banks in amount Of capital or circulation, those
having ninety per cent. are cut down universally
70 eighty per cent. Banks having larger crcu-
lation are cut down to a still lower figure.
| do not understand, Mr.. Speaker that this is
at all upon the ground that the securities those
banks now have deposited with the Treasurer to
secure the redemption of their circulation are not
amply sufficient for that purpose. This scheme
Is devised wholly for the purpose of reducing the
circulation Of the existing banks in order 10 pro-
vide q mode by which some circulation can be
given TO those States which have not now their
proportion of banking circulation.
! IL Is true, rs has been stated by several gentle
men upon the floor Of this House, that the nation
al bank circulation Is uncqually distributed It
Is a fact which cannot be denied that the New
England States, New York Pennsylvania, and
some other States, have much more than their
share under the national banking law that is
more than they would have been entitled to if all
the other States had come in and claimed their
share. ! recoect entering this Hall during an
/ evening session when my friend from Illinois Mr.
lngcrsDl was declaiming very stOutly against
the national banks and charging, especially upon
New England, that It had been ungenerops and
grasping in this matter of nutional banks lie
charged as with c0ntriying to get more than our
share OF things, and, in the exercise Of that grasp
/ ing disposition, getting more than our share Of
national bank capital and national bank circua-
| ton.
| Mr. Speaker, desire to alludc for a moment
| to the history of this national banking system.
] how il came 10 be created and how it was that
/ New England and the other States got more than
their shares. Everybody understands, who has
/ examined the national banking INV, that one-half
| OF the circulation was to be distributed among
the States according To population, and the other
/ half under the discretion of the Secretary Of the
| Treasury, according 10 what he supposed to he
the business wants Of the sevenl States and Ter
/ ritories but it was not distributed in that man
ner, and these Eastern States got more than their
share under the rule prescribed by the law. How
did they get it Was it their lault2 Was it in
the exercise OF that grasping disposition which
has been charged upon the New England States
that they got more than their share This sys-
/ TEN was inaugumted soon after the suspension of
specie payment, when the financial affairs of the
country were in desperate condition, when we
were engaged in deadly struggle 10 put down
the rebellion and this was a scheme devised By
the Government for the purpose of having mon
ey circulation that could be used in order to save
the Government. For n considerable time Mr.
/ Speaker, this scheme went begging, and no one
could be found who would 60 into it. Let me
say that on the part of the banks Of New Eng
land it was at great sacrifice they went nlto it.
In my own State they were entitled 10 some two
dollars of circulation for dollar of capital, and
when gave up the State banking system and
went into the national banking system, we went
into it at a sacrifice Instead Of having two dol
lars for one, we only got ninety per cent Of one
| In all the New England States, although none
/ gave 50 large a circulation in reference to the
amount OF capital, the proportion Of circulation
/ to the amount of capital was very large, larger
! than is allowed under the national banking sys-
| TEN. Ii was more in my own State than in any
other it was 80 in New York 50 that every
State bank that went into the national banking
system did so at an immense sacrifice. Under
| the system in our States the banks could invest
their entire capital in United States bonds and
get Just US much profit ON holding them as the
national banks, and then if a State bank had
100000 capital it had $500, 900 TO circulate and
| get interest upon. IL was only from sense of
obligation, because the Government had estal-
| lished a national system which it was considered
all loyal men, all lovers of their country ought to
conform to, that the banks Of New England went
into.the system, especially the country banks
10 those banks located in the cities which depend
upon deposits rather than upon interest on their
circulation it was not a matter OF so much impOr-
lance to make the change. But to the country
banks, which must always depend mainly for
their profit upon the interest on their circulation
it was a matter Of vital consequence and impor-
lance, and when they went in they did il at great
sacrifice. So, then, say that instead of NeE
I England and these Eastern States being charge
able with having been grasping in getting mere
than their share of this national bank system,
they went into it because they supposed it was
necessary for the good of the country, They took
it because the Western States did not choose TO
take it.
Now do not charge upon the Western States
that they were not equally patriotic in this mat
ter. We all understand that in an old communi-
ty there is more idle and silent capital than in q
new one In the Western States the condition of
business was such that money for all ordinary
purposes commanded higher rate of interest
than in the East Therefore it was no induce
ment to them to adopt the national banking sys-
ten, and they did not take large interest in
it 50 the capital was taken in the East
My friend from Pennsylvania, Mr.. Randall i
in the course OF his speech, went on TO show how
very little they had in the South, and how very
hard it was upon the South that they should have
only few cents per capita of national bank CAPT
tai, when the East had 80 much | take it that
the South is not in a condition to claim that New
Eegland or the North or any part Of the country
that took the national bank circulation when it
was offered TO them, were guilty of any great in
justice towards the South in getting that circula-
ton, when the South at that time stood in the
condition of actual hostility to the Government
But enough on this subject | take it we are
not to be charged in the Northeastern States with
having been greedy and grasping in getting a I
larger proportion of the capital 1t was because
1t was forced upon us. We took it at a sacrifice
Notwithstanding all that, it is unequal | agree (
and il there is other remedy, no other mode of
making il nearer right than it now is, then some
scheme OF this sort must he adopted to take away /
portion of what we have and give il to those /
who have not received their share Although wei
were compelled TO take it, still il there is no mode
of making ii nearer right than this let IL he taken
from us and distributed to others.
But | have proposed scheme here which in |
my Judgment furnishes better remedy TO the
West and better remedy to the South alto
gether than the committee propose here And
allow me to say, that this remedy that the COM
mlttee has proposed is unjust as between us
Massachusetts and Bhode Island have a very much
larger excess than has Vermont and some of the
other New England States. But the committee.
instead OF taking from those who have the largest
excess, say " We will take from you all alike :;
you shall all be scaled down alike those of Won
VINO have got three times as much as you are
entitled TO shall only have your pro rata reduc-
ton, the same as those who have only a small
excess, or no excess at all " because it scales
down the circulation of banks in States that have
no excess, just the as il does those in Mas
sachusetts and Rhode Island and other States who
have two or three times their share So that
say that if this remedy is to he applied as the
committee has proposed, Of taking away from
somebody To give to those who have not, they
have done II IN the most unequal and unjust man
ner. Il
But propose remedy that | think will cure {
this evil all round, and that is free banking sys
TEN, And was very glad to hear the chairman s
of the Committee on Banking and Currency exc q
press himself so strongly in favor of that as the
true remedy 70 which we must at last come.
have proposed as an amendment, to be inserted in
this BILL in lieu of the fourth section substan-
tally bill that introduced early in this session
and not only early in this session. but more than
a year ago into this House, and that is TO have
free banking system that United States notes
greenbaoks, shall be withdrawn from circulation.
and that there shall be free banking system a
that for time, while this process of reduction is
going on, withdrawing the greenbaeks from cir
culation new national banks shall be created 10 D
take their place, and that preference shall be G
given TO those sections-the West and the South a
which have not now their share that national
banks shall be created, and circulation issued 10
them in those parts Of the.country which are des-
htute, and the circulation and reduction kept ON,
pdyi pdssu, until the greenback circulation is re-
duced to 100000 600, and that then the national
banking system shall be free, so that whoever in d
the South, whoever in the West, whoever in the u
North, may desire national bank, he may have q
one BY giving the required security | say 10 Z.
gentlemen OF the West and 0entlempf, Of tho