Evening star. [volume] (Washington, D.C.) 1854-1972, 1871-12-04

States to tax the shares Of national banks. and
recommends that the controller be clothed
with power to act in cases where the capital OF
asbank has ben seriously impaired by losses or
otfIS rwIse, either by requiring the capital TO be
made whole by assessment OF the shareholders,
or BY requiring the bank TO wind up its affairs
within a reasonable time II its capital Is not
made good. Also to wind up the affairs of any
bank shich is not ngared in the transaction OF
legitimate and reputable business, or which
has obtained an organization through false or
fra2dulent representations
In regard To specie payments, he thinks the
act or February, 1858, which prohibits any fur
Their reduction Of the currency should be re-
pealed. IL public sentiment will not permit or
sanction such action by Congress, il will be be-
cause the people do not wish for resumption al
the expense of contraction.
Interviewing the question of a return to specie
payments and commenting on the various theo-
ries the controller saws -" Ultimate solvency Is
OF far greater Importance to the community
than convertibility, and the liberal and judicious
use OF credit is OF far more value in the CONNER
cial world than the instant command Of gold and
silver"
The theory that "the currency should be
maintained at its present volume until the i'm
dustrial and commercial interests of che country
shall recover from the effects OF the war, and
until the natural growth in population and
wealth, the revival of enterprise. the increased
facilities OF trade, and the expansion of ouI
borders, shall create a legitimate use of the
whole amount of currency now outstanding" /,
plausible one, and commends itself to popular
favor, as ahording an easy and gradual transi
ton to specie payment without any OF the incon-
veniences and hardships associated in the publ,
mind with contraction.
The fundamental idea underlying this theory
is that the conditions Necessary TO growth exist
already. 1t presupposes that the country MAY
prosper; that trade, industry, and enterprise
may flourish; that labor may have bountifu
reward, that individuals and communities may
grow rich and increase In wealth and substance
notwithstanding supc-abundant, irredeem
able, deprecated currency. II this assumption
is correct, il is hardly necessary to look forward
TO the time when natural growth shall Absorb
the surplus currency, and specie payments shall
come in the course Of nature.
He says 60 the probabilities seem to be thai
with a wise administration of the finances paper
and specie will gradually and surely, though
perhaps slowly, approximate TO an equality in
value. IL il were possible, in considering the
praetieability of resumption, to distinguish be
tween circulation and deposits, making the for
mer payable in specie, while the latter should
be payable in kind, much of the difficulty and
danger attendant on return to specie pay
ments would be removed"
The doctrine of contraction as a means to an
end for the purpose of Fastening a return to
specie payments, has been condemned by the
people. Ii has been tried and rejected, and m y
be considered as abandoned.
The proposition to wait until the business OF
the country shall expand to such an extent as &c
require the whole volume of paper money in
circulation, involves no Immediate action, meets
the views Of the public more fully than any
other plan, and is probably safer than any
cneme winch requires legislative interference
1t is also very evident that the undertaking,
heretofore considered, to place the entire cur
rency debt of the country on specie basis, by
the payment of deposits in coin, would be an
unwise and mischievous thing, vain and futile
at empt, which would lead to panics and failures
in the future as in the past. II specie payments
are to be resumed, let the effort be concentrated
upon the currency, and leave deposits and all
other currency debts to be adjusted by private
contract. As the first step in this direction the
associated banks in all cities should be required
to settle balances through their clearing houses
in current funds.
The discredlting of national-bank currency,
which is the consequence of their present regu-
lations in this respect, is unwise and injurious,
and creates distinction between bank currency
and lawful money which is unnecessary, and
which ought not to exist
1t would be wise measure to provide for the
extension of the national banking system wher-
ever capital and trade may invite, Withdrawing,
if il should seem desirable, United States notes,
as fast as bank notes are issued.