, 1873-11-08

'-~ NH~etseA
things any bettor. Do you stil think 1t would
have mado them any worse7 -.
THE WAR OF THE NATIONAL BANKS.
There is No doubt that fro will bo mado ali
along tho line. In tho next Congress, at tho
National Banks. It will DO demanded their
monopoly Of iesuing circulating notos bo broken
up. II might bo beneficial to tho commercial
lntoresta Of tho country IT tho monopoly feature
could DO removed though wo havo shown here
tofore that It has never yet hurt anybody. but
there is strong probability that tho plnn for
removing tho monopoly will DO in tic wrong
direction. II, for instance, tho National Cur
ronoy net should bo 80 amended as to prohibit
the National Banks from !ssutng any circulating !
notes wnatover, Congrosa might got tho tannn-
oial intorosts of tho. country into worso |
lnuddlo than over It would thcn be necessary |
to rotire tho outstanding circulation of the !
hanks and no SOC but throe Ways In Which this |
could DO dono, viz. ~ For tho bankere to con-
vort their bonds held by the Government as Be- |
ourtty for their circulation, and redeem their |
notes with the proaent volume Of legal-tondor;
or (2) for tho Government to undertake.
tho samo process on tho part Of tho
bauka; or (3) for the. Government to
keep tho bonds and issue new batoA Of
legal-tondor equal to the amount Of their out
standing circulation. In cithor of the first two
oaaaa, the ratiremcnt of the present volume Of
|. National Bank nosea would be contraction Of
tho currency to tho amount OF $954, ,0oo.-
900, Or about one-hali Of the whole currcn-
cy Of tho country. It would be inpraoticable
to attempt to do this in tho present financial con-
dition Of the country. Tho third plan would bo
simply to substitute for 1854 600 900 OF currency,
which ia secured by deposit Of $40o,0oo,o0o
United Btatos bonds, and also by tho entire Ma
tional Banking capital Of the country, like
amount OF legnl-tender, or lrredeemab1o paper
money not eeourea At nil. Tho amount Of lcgal-
tender could not be doubled without deprcciat-
| lug 1t very materially. As tho case stands now,
the National Dank circulation must be redeemed
ont Of the present volume Of lega1-tondcr,
| or, il not in that. thon in specie.
The amount Of lo8Al-tendors outstanding Ia
now ovor $500, ,ooo, 900, including tho recent In
| oureiop upon tho ao-called "reaorve.n 30 long
| as this Iegal-tendcr is irrodaemable, NO GRO
$500, ,000 900 removed from specie basis If this
amount DO doubled, no shall be just twice as far
| removed To retro tho Nationnl Bank notcs md
aubatituto graonbaoks in their place would bo to
dopreciate the latter In q greater proportion
than that Of the increase, and to make the proa-
poets for Bpecle resumption more distant and
obscure than they are nor. . =, :.
Tho main ground Of objection to tho law
authorizing tho National Banks to issue cirou-
la.ing notes Is that thoy are unable to draw, as
tho people belieye, double intereHt, on their
capital. Thoir notes are secured. by tho deposit
| Of Unitcd etatos bonds to tho amount Of 116
per cent They then draw por cont interest
on tho bonds thus deposited, besldes the to ID
per cent interest which they arc nuppoaod to
realize on tho full amount Of thnif circulation
II this wero the actual condition Of things, the
National Banks would be earning from IA to IL
per cont on their circulation, which is above the
usual average rate Of interoat for tho country
We showed in q former artiole; however, thai
the actual profit on ciroulation,' oVo
! and above tho average interest, is not mos'
than Is cent? on s10o. II this Ia tho case, th
country can we'll afford to loao it to enjoy th
absolute socurity of tho present law. TIL
] amount of tho National Bank circulation i
. 1851, 900, 900, while the amount of bonds De
i, posted, to secure this circulation. is noarl
; s40o, ,o0o, 900. There arc, therefore, 940o0o,o0
| on which tho National Banks draw only half a
a much interest "a they could realize II the cap
/ tai wero actively employed. Besides this, th
+ banks are required to keep reaerve of 25 pc
: cent on their circulation. Thoy are also RI
: quired to pay a tax, Which Is for tho genora
/ benefit Of tho country. Tho proportion Of eli
i culation to bonds is about 800 to a115,, and th
l. account really Stands thua: is.
!. National Dans Circulation.
United etatsa per cent eona s1s prom
: Currency Issued on same ....... 90
y Less legal reserve. - p
'' 1ntoreat tou................. $68........... &.
)" go. sl2.
B. Loss ta1 pcr cant on 800. ....................
+ ID. -. $11.
,, Mortgage Lodn. '~.; =:
@ 10per cent interest Oh saaa...,.
CO Difference between tho two Investments.
y At this rato tho loss to tho people ia only !
cents on $780, which Is not = loss Il 1t bo rogar
I'd ed as compensation for tho security oonferr'
in by the deposit Of bonds. II, in order to sa
ur the it conts on eyory 500, tho National Bar
Us notes are retired aud grosnbacks substituted
H. tho full amount, It is not at all unlikely that l.
or doubling Of the .greenback circulation, witho
h. any plan for relosu1ing it. will put up tho pri