The New York herald., 1870-01-14
THE CURRESCY-S GOVERNMENT BANKER.
To raE EDfron OF THE HERALD:-

the government the sole issuer and regulator OF the
CON metallic currency apply with exactly the
force to the issuing and regulating u that por
non OF the paper currency known az spaper mo-
ney,n in consequence OF Its adaptation to al the
essential purposes OF money, we propose to point
out the necessity OF making provision for Its proper
regulation" Great confusion Of ideas has arisen
In considering this subject by reason OF the camor
raised by those who favor the retiring OF our natlonai
notes substituting in their stead those OF an in-
definite number OF national banks. This has grown
out OF the simple unsupported assertion that ~ II
no part OF the duty Of government to do q banking
business,
Now, IL IL not pretended by those advocates OF a
national paper currency that the government shall
turn banker any further than 70 regulate the vaite
OF such currency as provided by the constitution IN
reference to the national coinage. 1t Is . funda-
mental to suppose that the issuing OF demand
notes 10 be used as currency forms part OF the ne
cessary business OF banks and bankers The inJurl-
GUS effects resulting from an indtscrminate issue oil
bank notes led to the separation OF the issue nom
the banking department. of the Bank OF England and
the suppression OF the privilege Ia respect TO all
future banks and bankers. The proper business OF
bankers has nothing To do with the issuing OF paper
money" or demand notes to he used as money, any
more than with the metallic coinage. As understood
and defined by the best authorities the business or
change, the promssory notes OF merchants manu-
and all others engaged In busines pursuits
to make advances oil such securities and on Iner
charitable commodities, secured by bills OF lading
and warehouse receipts. Paper currency Is quite u
modern invention. The business OF bankihgi Is Az
Old nj least as the days OF Moses.
Though 1t may not be admissible for governments
TO enter into commercial transactions or into bus-
ness competition With the public, II does not follow
that 1t ought not to do whatever the principles ln
volved III providing the nation with an adequate
supply Of paper money clearly indicate as Deedfui 20
be done. If the principle be once established that
the government is the proper agent for providing oil
kinds OF money constituting the circulating medium,
and has power TO regulate the value thereof" II
clearly follows that 1t ought to provide the necessary
machinery for It's management. TAis power III re-
specL TO the metallic currency ls imposed ON tile gov
ernment by The organic law. ana when we have onco
widcned tine intent OF such law 10 the issuing of
paper money IL becomes OF paramount Importance
TO establish system for its administration.
We have now arrived at the grand problem dc.
manding solution. Had the trainers OF our legal
tender act understood the principles which goyern
paper currency, indeed, any other KIND OF cur
rency, the nation would have escaped very mucn OF
the injury IL has sustained from redundant clrcula
ti0n, the evils OF which are not yet ended and Will
only cease by an appreciation 10 specie basis. lt
was complete misconccpuon OF first principles ana
all past experience, To issue 80 large an amount or
nconveruDe paper IN so short period. 10 add
x41U 900 091 to tile ordinary amount VI bank circla
lion every man having the least knowledge or bank
ing aud currency foresaw would produce a complete
tary and commercial affairs. Even though the Bls-
pension OF specie payments had been avertcd py
some miraculous circumstance, such an amount,
Issued in one or two years, must have been produc
tive OF mischief by being IN excess vi the legitimate
demands Of commerce..
These considerations serve 10 point out the neCcs-
slty Of having department VI the government
created to manage the whole business OF conlng
money aud issuing and managing the paper cur
lency. There are many reasons why tnls depart
menJ saouId not be connected witn the Treasury.
The management OF the national finances and the
provision vi the national money, or circulating
medium, totally different their deaIs wen
as principles. Until they are separated there can
never be q sound ana scientifically established sys-
tenn OF currency III this or any OLner country. Ihe
temptatlon to issue notes in excess OF Inc REQUIRE
menis OF commerce ought tor the reasons ALREADY
stated and for others equally obvious not to lei.
In the way OF minister ol lnancc, VINO IS too apt 10
consult Only his immediate necessities. Had this
provision oeen clearly settled by the constitution We
should not have Witnessed another exemphncauon
or tue loiy OF attempting To create national re-
sources by an ovSrl5sue, or more correctly speak
ing, an excessive issue OF lrredeeaabie promises,
and our DEBT would not have reached much above
One-bRiI ITS present volume.
Still more cOgent are the reasons against the
banks being endowed with the Drerogative OF pro-
vidllg any portion Of tile circulating nlcuium. We
have conceded nat II oe5 not belong TO the govern
ment to supply lOanabe capital to tne community,
or trade money eXcept ia certain emergencies,
and for strictly temporary and Legitimate purpose,
which VIII be hereafter referred CO. b,rt It would
be much more delenslble for 1t Ia DO 80 than It Is To
permit the continuance OF O practice variance
with the natural rights and interests OF the people.
The use made OF tuis vast power by the banks ex-
emplitieS utter defcncelesSneSs OF the principle
involved. Ii is ar undenaDle fact that tine banks
use this great natoDal gut amounting IN the aggre-
gate TO earn the largest possible dyl
dends Tor their stockholders.
Tuis is q question we have right TO go behind.
We have a right to consider the uses made Of This
vast tree g which ought 10 lnure to the advantage
Of industry at large. In order to earn the largest
possible dividehds, 1t IS notorious TACT that the
bulk OF the banking currency Is used to aid great
specuatQrs In wldely extended system oil stock
ana other equally perncions gambling in the pro-
ducts OF labor. Thus the bulk or our lOanabe capi-
tai has become monopoly III the hands OF . limited
numper OF great capitalists and the effect Is 10 make
the rich rIcner and the poor poorer. Though we
may not be able to prevent this abuse OF capital.
Is nevertheless, an unimpeachaDle reason against
the continuation OF SO large state gt 10 such un-
worthy recipients.
Let this question he fairly met. Let Mr.. Sumner,
the great champion Of q DAnk III preference TO
tOna currency, answer its 1t right, or )ustifiabe,
on any national grounds for the government to con-
tinue what seems SO nlOnStrOus wrong on the
community? The privilege oil issuing $3oo 900 600 OF
currency cannot be worth less than $50, ,0OO 900
year. The prerogative OF providing the circulating
medium and OF beng the sole Judge OF It's sufic,ency
cannot be safely trusted ia the ands Of individuals
corporations. 1t belongs OF right to the nation,
aud the nation alone should provide for Its emission
and control IN the way we have pointed out, or IN
some other equally sound and reliable. General
Garfield, the able and accomplished chairman OF the
House committee OH Banks aud Currency, mas can
ddy acknowledged his change Of views Oh this most
important question. he supports our theory ana
50 WIN every logical mind tnat examines the subject
ny 1IS Hkut VI cAPetleHCc "uu WY .lo VI aeioneu.
what Is needed, then, ls department To prepare
and regulate our money, which Is not only 1.-The
war;" but the very lie blood oil the nation.
This department may properly be called the Board
or control. IL should be composed OF at least tive
commissioners, one Of whom might be cabinet
minister and the presiding officer. The Others like
the judges OF the Supreme Court should be selected
for their peculiar qualifications for the duties 10 be
discharged They should be paid III proportion TO
the high responsibility OF their positions and the
ability Indispensable to the efficient exercise oi their
oincla functions. LIko the judges, they should be
made, as far as possible Independent OF political
influence, AMI be removable only for cause shown
and by impeachment The position OF the presiding
officer would be analogous to that OF the Master OF
the Mint Ia England, aud he would be the medium or
communication with the other branches or tue gov
ernmenJ. We shall not enter into the details vi the
proposed measure, which would require MUCH
careful consideration to prepare. These details
would have to be framed III reference to the
duties the commissioners would nave TO
perform. The experience the managers of
the Mint and OF the Currency Bureau would doubt
he Yaluahlr. Rnt the BOARD OF Control shuud nave