The Richmond palladium. [volume] (Richmond, Ind.) 1855-1875, 1872-12-14
FREE BANKING.

~ f-aH- = NEE DAN n INV
1t is evident the measures per-
tanning 10 the currency and bank
ing will occupy large share of the
attention OF Congress this winter,
and from the almost universal de-
mand for An increase Of banking
capital and circulation it Ia evil
dent that the doctrire Of free bank
ing will be received with more ia
vor than 1t has been hitherto. That
legislation upon the currency and
banking question is needed, as
matter Of simple justice to the hus-
mess interests of the West and
South, it would be vain 10 deny. i
As the case now ttands,s New York
Pennsylvania, and the New Eng
land States have too large pro-
Fortunate share of the am cunt Of
the authorized national banking
facilities, and as q consequence,
til use sections which do not get
:heir proper distributive share,
complain Of the inconv enience and
high rates Of interest which their
business men are uniformly sub
jected to. The amount Of nation
al bank currency now authorized
is $3.50, III ,47O. Out of this the
six New England States have
| el08, 64e.279. while tue thirteen |
Southern States, including such |
! wealthy States as Kentucky, |
Louisians, Virginia and Maryland,
have only e39,976.lOs. New York
and Pennsylvania have fraction
over Slo3, 0O0.00 This leaves
about 1O2, O1O. 600 for all the West
ern States. These figures show at
q glance how unequally the cur
rency is distributed. and ii any
further illustration is needed it
will be found in the fact that the
little State Of Rhode Island has
about as large share as Indisna.
While there is vast accumulation
OF currency in all the great centres
z Of the East, which is loaned out at
high rates TO spectators, or used
in buying up Government bonds,
the new States of the Nest, whose
business and population are ex-
panding in q much larger ratio,
have not q sufficiency for their le-
Ultimate operations. This hard.
ship is particularly felt, in an az
gravated form, at the seasons OF
marketing and moving the crops,
and with view of affording relief
! to the West and South, the Comp
troller of the currency recon-
mends the repeal Of the law which
provides for the distribution OF
twenty Ave millions of the curern-
cy by transferring that amount
from New York and New England
to those needy sections, and the
issue Of Eve millions of bank CAPT
Il tai annually for the next Eve years
to States which have not received
their full proportion.
> The method suggested is we'll
? enough as far as it goes, but it
0 does not go far enough. If the
national banking system is to be
0 perpetuated, it will sooner or later
! have to be made free, SO that i.
. may adapt itself TO the growing
:. wants OF the different sections oil
the country, leaving each locality
3 to Judge Of its financial require
ments. The free banking system,
+ when these institutions derived
: their franchises from the local in.
; stead OF the Federal Governm ynt
= had fair trial and worked to the
J general acceptance Of the business
y public in several Of the States.
. With, free banking ON notes, secur-
= ed by collateral Government bonds
!. and central redemption agency
= or some other means for securing
= elasticity, no better currency could
q be devised. 1t has been urged il
y opposition to tue free banking sys
|e TEN that it would be liable to rur
. into excess, owing to the larg,
profits attending the business o.
I banking; but this danger could
r. easily be guarded against by re
n striciing the issues to ninety PEI
"a cent of the par value Of the bonds
and the simple expedient of com
!. polling the bsnks to replace theil
= reserve of legal tenders with gold
t and to this end, prohibiting thei'
+ sales of gold received on accoun
a of . liberal percentage on their cir
], culation. Thus the way might b.
paved for q resumption of speci,
Z payments, and the difficulty Of ,
% legal apportionment Of banking IA
i cilities to different sectis rs Of the
country be at the same time avoid
:. cd. A convertible or mixed cur.
y rency can never be redundant Il
g any great extent, or for any length
ls of time; and the moment Congress
J. is able to inaugurate q process
Il which shall surely, il slowiy, lead
}. our banking institutions back K
" the first and only sound principles
= of public finance, it will be per
fectly safe to throw open the dool
=, In feAA rnv,N uotittnu when the ava