, 1870-07-12
GOLD NOTE BANKS,
The third section of the new banking bill
reads he follows:

| feaa5 a6 I0uOW8:
,,s SEC asaos, And b acAs' e.sst That unon
ing Interest payable In gold, with the Treasurer Of
tae United States In The manner prescribed in the
Currency act, it 1hal be lawful for the Comptroller
Of the Currency to issue to The association making
the same, circulating notes Of different denomina-
8: shieh hotes shsii beN upon ,heiT tses &c
sued to pay them, upon presentation - ine ot11ce
oI me association, In gold coin Ct &c United
don ID such coin. PROVIDED tet no bsnfug ssso-
citation organized under this eection shall nave q
circulation In excess Of $4,000, ,0o1"
By the provisions of this section it will
Be observed thss $40 OF 10-4O bonds may
bo used as security for the circulation of
the gold note banks, and SIS per cent of cur
rency may be issued on the par value of
said bonds. This will create an additional
demand for these bonds, and tend to en-
hance their market value. The next sec
ten provides that gold note banks shall, at
all times, leep on hand 25 per cent of their
outstanding circulation in gold coin Of the
United States In regard to payment of
ta1es4 examination Of condition, and gen.
eral supervision, gold banks are to be sub
JCNt W 2AA4 hAN HuA ElurlS1QOS
OF the National Currency net.
We can see nothing to hinder the estab-
lishment Of gold note banks in California,
Oregon, Nevada, and in all the gold
mining Territories, without delay. And it
is question whether they may not be Of
ganized and successfully operated in
MI the States. What is to pre-
vent gold nota banks from doing
Ia full aha1e OF business in
New York, New Orleans, OF Chicago, md
N any other considerable city of the United
States? Who would refuse their notes
| What merchant or manufacturer would de.
cline to receive them at their gold value ::
II We had gold note bank in Chicago
does any one doubt that its notes would
pass readily in all business transactions and
bear . premium over other bank notes
equal to the premium Of gold over green
| backs? II ws had ten such banks in Chi
cago, with each million Of circulation,
they would dominate the greenback banks
| and cause their notes to be quoted and re-
ceived at q discount, just as is the case in
California, where one is allowed for eur
rency its value Ia gold. in all thu stores,
hotels, markets, and shops. For instance,
if gold is quoted at 11e, you viii be allowed,
say, 70 per cent for your currency, and if
ITO, about 81; or if 1o5, they VIII give you
credit for SO per cent, or whatever CORE
spends with the coin value OF your notes at
the time Of the transaction.
This is, unquestionably, the correct way of
doing business. Gold coins of the United
States are the proper standards Of value for
property and labor, and paper promises
should pass for just so much gold as can be
obtained for them, and no more.
The gold note banks would receive on
deposit, and pay out greenbacks aud COM
mon bank notes at their current and change
able value II man borrowed $1,000
from such bank, he would give his note
for 81, 600 in gold, and he might receive
81, 1ao in common currency, or whatever
amount the quotation Of its gold value
would entitls him to; and in paying his
note the bank would doubtless receive the
same Kind of currency at its then quotable
value By tho late decisions of the Su-
pteme Conrt, the bank would have the legal
power to exact coin or gold net payment.
The act says they shall receive at par, in
payment Of debts, the gold notes of every
other such banking association.
The bill prescribes no limitation to the
extent gold note banks may be organized;
thus monopoly il. is.terminated. The system is
made free to all capitalists who shall COM
ply with the National Banking act It is
Tree banking on The gold redemption basis.
The g Per cent Of circulation allowed on 1,
deposit of $50 bonds IS quite liberal To
stast gold note bank of million with q
circulation of million, will require about
sl,45o, 600 of gold capital, as follows:
81 l75, COO for the bonds; $3.50, 600 of coin
reserve, and few Thousand for furniture
and fixtures; or about 81, COO, 900 of green
backs~ That gold note banks are destined
in few years, to supersede, by abso1p-