Western Reserve chronicle. [volume] (Warren, Ohio) 1855-1921, 1870-06-22
Speech Of Gen. Garfield ON Increasing
Banking Facilities.

Speech of Gen. Garfield on Increasing
Banking Facilities.
On the 7th inst, the House had un
der consideration the bill reported
from the Committee on Banking anC
and Currency, to increase banking ia
cilities, and for other purposes. As {
matter of interest to our readers, mos
of whom are the immediate constitu
ents of Mr.. Garfield, we print the re-
port of his remarks on the subject.
Mr.. Garfield, in explanation and ad.
vocacy of the bill, hoped to have the
attention and sympathy of the House
in undertaking such a delicate and
difficult task. In view of the singu-
lar chaos of opinions on the subject,
he confessed himself utterly unable
to realize his own views on the bill,
which could possibly pass the House,
and had therefore to prepare a bill
under these difficulties, and under the
additional difficulty of instructions
from the House, and of expressions of
views in the Senate. After discuss
ing the general subject of the distinc-
tion between coin and paper money,
he quoted from a recent publication,
I" The Science of Finance" by Robert
H. Patterson, of Scotland, to show
that the paper circulation OF the Unit
ed Kingdom had remained practically
! stationary for the last TWENTY-FIVE
years-since 1874 when the great
Currency act of Sir Robert Peel for
bade the increase of paper money ex-
cept in a very limited way, and then
under great restrictions. And vet,
within that time, the United King
dom had trebled its wealth and quad
rupled its trade. The great instru-
ments of British trade were neither
coin nor paper, but the check and
commercial bill, the draft on the
bank. Not five per cent, according
to this writer, of all the business of
the United Kingdom was transacted
in coin or paper money, more than
ninety-five per cent. of it being trans
acted through the banks, in the form
of drafts, bills and the transfers of
credit. This was remarkable fact,
which should be taken into account
in all discussions of currency and
trade facilities. 1t showed that the
bank was to-day the great nsechan-
ism for facilitating trade, rather than
coin or notes. He believed the first
great want of the country was a sound
currency, exchangeable into coin; but
as that was impossible at present and
beyond his aspirations, he would say
that the present great want of the
country was increased facilities for
Ii, n1.ar hot In h.
form of paper notes or banking credit.
That was the great and pressing de-
mand of the hour. He replied 10 the
argument as to the distribution of cur
rency, arguing that, however disturb.
ed, it would flow in channels regu-
lated by the laws of trade, and could
not be restricted by any absolute pro-
visions of statute law. He said, in re-
ply to an observation by Mr.. Wood,
that it was not the mere equality in
the distribution of currency of which
complaint was made; it was of the in
equality of banking capital and bank
ing facilities that was complained of
most. There was a glut of currency
in the market. He read from the mo-
ney article OF a New York morning
paper statement that the associated !
banks of New York had, on the 18th |
of May, 1870, two hundred and twen- !
ty-eight millions on deposit, and a |
of thirty-three millions, |
being a total of two hundred and six
ty-one millions. The reserve of TWEEN |
ty-five per cent. on that would amount |
to sixty-four and half millions. But |
the banks actually held ninety-four |
and half millions, being surplus of /
thirty millions. What was the key 4
to that situation? The succeeding 1
sentence furnished it t:-"Rate of mo-
ney four per cent; money easy; the /
speculation in the Gold Room is dull.n
There were scarcely to be found more
facts crowded into a small
compass, standing in the relation of
cause and effect to each other, and
showing the difficulties, than what he
had read from that article. What
was the cause of the glut in the cur
rency? Because at the present mo-
ment there was a remarkable lull in
the gambling housees known as the
Gold Exchange and the Stock EX-
change of New York. The gamblers
we're unable to prognosticate the signs
Of the times; they were waiting to
zee what Congress would do, and were
not using their reserve, but letting it
De idle. If Congress were to adjourn
legislation on the financial
question, the scenes of July, August
md September, 1869, would be re-
1eated, and the whole business of the
country would be tossed up and down, {
Orn by the gamblers of Wall street.
While money was at four per cent. in
.kah L. N1 IN
he West, with the best business pa {
Der and security, were to try in vain
o get loans at fifteen and twenty per j
ent. Legitimate business was suffer
ng while the rascals and gamblers {
Who dealt in the nations life blood {
lad money easy at their command, ]
md this was one of the conditions '
hat grew out of the unequal circula-
ion and unequal distribution of bank |
ng facilities. The Committee on
and Currency had been sub
ected to newspaper attacks, growing l
,ut of the bill, one paper denouncing
he bill as one OF contraction, and an |
ther denounoing it as one of infia-
ion. He stated facts to show it was q
lot bill of contraction, and wished /
t was as easy for him to prove that it S
vas not one of imitation. That was !
he great difficulty which he had with I
he bill. AS to the suggestion in favor v
f issuing greenbacks, he was entirely b
pposed to it. 1t was never safe to b
rust the volume of paper currency to C
he mere naked will of a political s
arty in the National Legislature. But y
that difficulty were not in the way, b
here was still another and a greater a
ne. A greehback currency issued I,
ot in connection with banks was not k
egulated by the wants of business. b
was Just SO much the year round, q
-hile every man knew that in some S
sasons of the year more circulation il
-as needed than at others. He deem Ii
the issue of currency by the govern v
tent as unphilosophical, unsafe and V
| adapted to the wants of business, il
nd he reminded the House of the v
tie decision of the Supreme Court Il
yainst the Legal Tender act. He "
'ent on to discuss briefly the sections b
{ the bill relating to gold banks, say n
~ that on the Pacific coast, in Tex S;
}. New Orleans, in Charleston and Ii
|, New York these banks would be b
L