The New York herald., 1870-03-14
The Funding Bill-The National Banks Get
tho Croum.

that this measure has been worked up for the
special benefit of the national banks, and that
the apparent opposition of these institutions
was to cover up gigantic scheme for plumber
ing the public. The last section of the bill
contains the gist and purpose of it. Any
banking association organized or to hc organ-
lied, upon deposiiing with the Treasurer
United States notes TO any amount not less
than fifty thousand dollars, may receive an
equal amount Of registered bonds OF the kind
provided for by section three Of the act, and
may deposit the same as security for circu-
lating notes and thereupon such banking
association shall be entitled to and shall
receive circulating notes upon terms and con
ditions and TO the extent provided in the
National Bank acts. Aud now mark, this is TO
be ''without respect to the limitation of the
aggregate circulation of national currency
that as circulating notes are issned under this
section an equal amount of United States notes
shall be cancelled and destroyed.
Here, then, in this insidions manner, and at
one stroke, the legal tender notes are to be
pushed out of existence and the whole cur
rency of the country to be given to the
national banks. The three hundred millions
of national bank circulation is to be increased
to six or seven hundred millions. There is no
limit but in the amount Of greenback currency,
for which the national bank notes are to be
substituted. The aggregate circulation, there
fore, of the national banks, will be little
less than seven hundred millions. The
only condition is that az fast as
new banks are organized aud notes are issued
to them, or an increased issue il made to the
notes Are TO be cancelled and destroyed. If
this bill should pass the House md the Presi-
dent should sign 1t we shall soon lose sight of
the legal tenders. Mr.. Chase's bull from the
Supreme Court against this cheap currency Of
the people will be thus practically carried out.
The father Of the greenbacks dug the grave
for his own offspring, and Congress will
close it up beyond the hope Of resurrection.
When the whole circulation OF the country
is in the hands of the national banks it will be
long time before we see any other. These
associations are far more powerful than the
Bank Of the United States was. They will
control Congress, the administration and all
the material interests Of the country, and, of
course, for their own benefit. II it should
not be to their interest to come to specie pay
ments or to remain on a specie basis the
people will be compelled to submit to paper
currency. Aud why should they desire q
specie basis when they derive enormous pro-
fits on purely paper circulation Why
should they want coin, which would yield them
no profit, and which bears no interest when
Funding bill, in getting rid Of the legal tender
notes and in giving the national banks the
whole circulation of the country, will prevent
permanent return to specie payments and
will perpetuate very dangerous monopoly.
A great deal has been said by Mr.. Sherman
and those who favored his bill about the saw
ing that would be made. Let US see how the
bill will operate in this respect. Suppose
| the three classes Of new bonds, bearing a
| lower rate of interest, can be negotiated at
par with our outstanding six per cent securi-
! ties how much will be saved On the first
| class of four hundred millions, bearing FIVE
| per cent interest, four millions year
would be saved on the second class 0i
four and half per cents, six millions a year
would be saved and on the third class of four
per cents, eight millions year would be saved
Upon the twelve hundred millions the aggre-
gate saving would be eighteen millions year.
1t is doubtful if these bonds can be nego-
tiated at par for six per cents, which have now
risen to such high value in the market But,
for the sake Of argument, admit they can, there
the eighteen millions saved. First, these
bonds and the annual income from them are to
be exempt from all taxation by national, State,
municipal, or local authority. Thi, exemp-
ton alone takes away large portion Of the
eighteen millions proposed to be saved. Then
one-half Of one per cent is to be given for ne
gotiating the new bonds--tbat is, the cost
will be six millions, Independent OF the large
expenses Of The Treasury Department in trans
ferring the debt But, to proceed with this
analysis Of pretended economy or saving, let
us look at what the country will lose by chang
ing the grecnback currency into bonds. Four
hundred millions Of legal tenders turned into
five per cents would increase the annual bur
den Of the people twenty millions But, take
the four and half per cents, as the medium
class, and the yearly burden would be in
creased eighteen millions the full amount pro-
posed to be saved by the bill in annual interest.
So that there will be positive loss to the
country Of the yearly exempted taxation on
the bonds, besides the six millions job 10 for
eign and home capitalists for negotiating them,
and the other expenses OF the Treasury. With
even the reduced interest-and it is doubtful
If the interest can be reduced through nego-
tiatng the new bonds for our present six per
cents at par--the burden Of the people would