Delaware gazette. [volume] (Delaware, Ohio) 1855-1886, 1870-06-24

LlEe SFeen PACKS ana I'hfee Fer Cent
Mr.. BEATTY. Mr.. Speaker, the bill
reported to the House by the chairman
of the Committee on Banking and Cur
/ rency provides in its first and second
sections for the withdrawal from circula-
ton of s38, 500, 700, of greenbacks and
the retiring of $45, 100000 Of three per
cent. certificates, and the substitution
/ therefor of So5, 900, 900 of national bank
notes.
The three per cent. certificates are
now held by banks as part of that re-
serve which existing law requires them
I to keep in their vaults for the redemp-
/ ton of circulation and deposits BY
taking the place of legal-tender notes
| they liberate for circulation and use
among the people S45, SOC, 900 of green
backs, which otherwise would remain
locked up and imperative. Itmay there
/ fore be stated in all fairness that by this
bill the country will lose directly $751;
900, 900 of greenback circulation and in
directly SIG, 900 more, the latter
amount being the reserve which the
banks will be required to keep in their
vaults for the redemption fthe sos, 900,
COO national bank notes authorized by
this bill. 1t is fair, therefore, to state
that if the bill becomes a law the whole
volume of our circulation will be dimin-
ished by the loss of SIo4, ,ooo, 900 of
greenbaCks and increased by the addi-
ton Of sos, ,OOO9. 900 of national bank
notes, the result being an actual con-
traction of $4,000, 900.
Believing that our people need more
money and that contraction would Sc
riously embarrass large numbers of our
citizens who have made contracts for the
future, with the expectation that the vol
ume of currency would remain undimin-
ished, and satisfied that any contraction
would work injury to the debtor, while
it increased unfairly the gains of the
creditor, and for other reasons which
will be hereafter referred to, shall be
compelled to vote against the bill.
In answer to the charge that the bill
will effect a contraction of the currency
it will be said that the establishment of
additional national banks will concen-
trate and utilize the money of the COM
munities in which they are located. and
open up a system of checks and credits,
which, without the actual employment
Of bank notes, will facilitate exchanges
and give to the country substantially all
the benefits of increased circulation, and
that this will more than make good the
SC, COO, 900, which under this bill, in the
way stated, will be lost; but to this l re-
ply that in every section where banks
can be made profitable, they have al
ready been established, and the bene-
iits arising from this concentration of
capital, and the system of checks and
credits, are already enjoyed and cannot
be increased by the substitution of ma
tional for private banks.
1t IS, perhaps, in this connection we'll
enough to observe that private bank,
if properly conducted, keeps at home
and within its control, for the accom-.
mediation of its customers, all the cur
rency which properly belongs to the com
munity in which 1t is situated, while the
national bank absolutely reduces the
amount of circulating medium in its To-
cality. To illustrate: national bank,
such as is contemplated by the first and
second sections of this bill, before it will
be authorized to transact business with
the public, must gather up currency
enough to purchase 800, 900 in gold
Estimating gold at what it is worth in
the market to day, it would require to do
this STA, 900 currency. This gold being
States, he issues SIOO, 900 in bonds,
which are transferred to the Govern
ment in trust to secure the circulation of
the bank.
After this is done the Comptroller of
the Currency is authorized to return to
the organization SOC, 900 in national bank
notes. Here there is a loss to the COM
munity of s24 900 of circulation. Then,
again, there is the further loss, referred
TO before, of twenty~per cent. Ofthis $780,,
900, or SIS, 900, which the bill requires
to be kept constantly in the vaults of the
bank, to redeem this circulation, making
in all total reduction of the circulating
medium of S42 900 or, in other words,
the bank sends away from the commu-
nifty in which it is located STA, 900, and
has returned to it only $72, 900 available
for circulation. It will be seen that
private bank with the same capital can
loan more money to the community
than a national bank, for the simple rea-
son that while the former has ready for
active employment its whole actual capi-
tai the latter has only about seventy per
cent. which it can use for the accommo-
dation of its customers. So that when
the advocates of the bill under consid-
! Grafton urge that the creation of the ad-
ditional national banks provided for in
| the first and second sections will work a
further concentration of capital, and ex-
| tend the system of checks and credits to
| such an extent as to virtually counter
| balance the actual reduction of the cur
rency, which the bill effects, they make
a great mistake, and manifest a want of
practical knowledge in relation to the
subject.
The contraction which would neces-
sarily result from the passage of this
| bill is to my mind a fatal objection to it.
| There are other considerations, however,
which in my opinion are sufficient to
! condemn the measure even if it did not
diminish the currency but before allud-
| ing to them desire to repeat what
have in substance said here and else
where, to wit /; that in my judgementthe
Government can in strict conformity
with its pledges to the people, and in
furtherance of the general good, con-
tinue the present greenback circulation.
l hold that since the pledge made by
Congress in 1864, that no more than
S4oO, ,ooo, 900 oflegal-tender notes should
ever be issued, we have had no moral
right to exceed that amount; that vio-
lation of this pledge would unsettle val
ues, impair confidence in the greenbackr
and entail consequences upon the coun-
try more fatal even than those which
would follow the most serious and rap
id contraction. This four hundred mil
lion limit has, it is claimed, been reduc-
ed to S3s6, 900, 900 by a late decision oi
the Supreme Court, which prevents a re-
| issue Of the $44, ,Ooo, 900 of legal tender
that, unfortunately for the country, were
withdrawn from circulation and cancel.
ed during the administration of Presi,
dent Johnson. know, however, of nc
well-fnnnded objection. either LEGAL. NOR