, 1869-11-29
SECURING BANK EQTES.

It Cnfltitu 4111tS Aoha4o Ae0a""4N'1-f /
.ietter, which We publish elsewhere, the
points Of Which are rs follows;
]. That experience proves that bank
usto currency, though its redemption he
sec,.cd by bonds in any reqnifcd manner,
4 still Halle to initiation and Insolvency,
.r.,1 that the amount Of my paper currency
u he Issued muAl bc arbitrarily limited to "A
nsrticp.ar svn.-t, C., We cannot safely have
tr G banking.
II. Thut Tue absolute redemption in gold,
in all contingencies Of bauk-pote curren-
r., is impossible. |
III. That lie bonds On which our present
| ,a,,h,notc c11.1cncy is secured are not aval-
! ,ble as q means Of redemption, because |
| ,hey ate time bonds, not due, can only be
realized by sale in open market, and Sell |
ut discount
~. 1t, therefore, proposes that the gov
! ernnent issue $500, nor, 100 Of bonds, bsar-
.,ls q low rate Of interest, but payable On
! s:emaud, and make this the basis Of bank
:nc, OF security for the redemption OF the
| l1ank notes.
| =. II il be objected that our government
::apuot redeem the $50o, 100000 Of bonds
% issued, our correspondent afhr1ns that
81. orr GOTTEN expert alone will hcnceforth
| provide Us with all The coin Necessary"
Our correspondent evidently overlooks
[ the fact tl1at "our cotton exports do not
belong to the government, md, though
] their amount might be ten times as great as
it il. they would only help the government
TO redeem it's promises to the extent that It
: cau tax them; and, rs the government l5
expressly prohibited from taxing exports
!. they vonla not help the goyetument to the
extent Of n penny townrd releemlng ITS
= ! =3oe, coo, 600 If bonds "paynhlc oo de-
uurd.r AZ onr present grocnback and
= Satip1al Bank note currency is at discount
- Of 20 per cent, because we cannot rs.
y teesn $3.50 ,ooo, 600. Of gseeubscks, it could
= :, not possibly be helped by basing 1t o.
, -50tl. .{}h,(NO Of still moro irredeemaol
bonds.
d. Tie fact Tim: our national bonds run O.
- time and are below par in no way lessen
- .heir availability as a means OF securing IN
retlemption Of the bank Dote', but oas
os tenders it necessary to requirc IN increase
nunotity Of bonds for security.
ee4' Thus, if bonds for 3ioo art worth $50
~ .o1a, ucn they arc fair scca1:ty for the
~ ~ demption Of SIS in currency, against
.' .ss' contingencies, except 1ecline OF the hot
.nluy So: Eut, If the Comptroller Las 1
over to require l'anlss to &<<r the y
.alut Of their bonds in pledge 10 or 20
ecnt nbuye the amount OF tn
.,,rrcncr ailoat. then, il Tie bonds decline
vaIre. their ouantity must he increased
'4e he banks until the security is aaegua
~, onr present banking law IS defective
T., Icing based on the par or principal susa
:.ss the lond, when it should be based on
;, ~ selling value in gold. Thus, on bond
500 a bank nov issues 80 IN
sercy. As the boad pledged fur securlt,
- worth ouls from SIS to $ai, the currenc,
,.o-s secured by gold value less b5 II
e; to SIG than its face. A sys'
wh;c, allows 500 in currency to be iss
:. IN from SO to $50 of gold va1ue as SC
s,,+,. rity, tends nnturnliy to imitation, which
~ =, prevented by tho nrbitrary Limitation
~ :, the volume Of the bank-pote currency
, III, s::nn, ,e0o, ,ooo, md, consequently, Of
..a, hanks to those now in existence. Hut
press has no more tho wisdom, or nat
=, f.. right, to eas hox many banks We ahah
later srecie payments arc sesun'ed)
l,oy uoauy markets or ships We shall
Gus let it secure tho redemption Of the cu1
a cy. End We rereat there eau he no da
> w If initiation. 1t bonds for $1,000 wi
aa,. cure 81 900 in EA1rency, vnry well.
y, ~ ;.ss than $1,Uo0 in bonds will securc
'au.~1 reasrurtion Of 81 900 in currency,
'0F~Asf l rn ~ {hn s1nAYtfS ii