The Richmond palladium. [volume] (Richmond, Ind.) 1855-1875, 1874-05-13

SsJV@YOO%StJ III TIT
dttribu6 OF amon1 TIE aAtes Upon
ssss u act. IL Ne Ne kstland ssates ~ere
entitled to less than $4,000 600, but
received $40. 600, 600, and the other
Eastern States had an excess Of nearly
$1,000, OW.
The most fthe friends of the bill
desired free banking, that is. the re-
and locality of the circulation of
National banks, SO that people should
be left free in every part of the United
States to establish National banks
wherever and whenever their local
wants and necessities demanded them.
The profit upon the currency of Ma
tional banks is less than two per cent.
and they will not be established and
maintained anywhere. unless there be
local demand which will give to
them iiberalline of deposits. But the
purpose of this letter is not to enter
into any defense of the second section
of the bill, but to remove a misappre-
hension that appears to prevail in re-
gard to the first.
Whether the volume of the currency
is sufficient for the business Of the
country, is question OF fact about
which men may honestly differ. During
tire four years preceding the panic,
there had been an actual contraction
of the currency. and a much larger
comparative contraction resulting
from the growth Of population and
business. A majority of Congress
were of the opinion that to produce a
restoration of confidence, a speedy re-
vival of business and return to the
prosperity, which was so suddenly de-
stroyed by the panic, some addition
should be made to the volume of the
currency.
That the bill which has failed to be-
come law would have produced some
contraction is undoubtedly true; but
it would have been almost entirely in
the stock market in New York. 1t is
well understood fact that the reserves
of the Western and Southern banks
kept in New York have been loaned
by the New York banks almost ex-
clusively upon call to. dealers in
stocks, and have thus contributed to
stimulate unwholesomc speculation,
and have been of very little benefit to
the mercantile or manufacturing com
n,unity. The evil resulting from this
fact was strikingly illustrated during
the panic last fall The stock holders
who had borrowed the money were
not able to repay the New York banks
and they in turn were unable to pay
the country banks from which the
money had been received, and thus
the disaster of the panic was greatly
aggravated. This bill in effect required
the banks outside of the redemption
cities to keep three -fourths of their
reserve at home, and would have with
drawn some millions from the stock
market in New York, which would
strengthen the banks to which they
belonged, and would have produced
contraction in quarter where it is
pretty well understood that contraction
would do no harm.
The act OF 1869, to strengthen the
public credit, declares that "the Uni
ted States solemnly pledged its faith
to make provision at the earliest prac-
ticable period for the redemption of
the United States notes in coin" In
the debate upon this bill nobody has
denied the character or binding force
of that pledge, but the question as to
the practicable period for its per-
Torrance remains as open as it WAS
upon the day it was passed. Very few
members of either house of Congress
have agreed upon any method for the
resumption Of specie payments A
few are in favor Of boarding the gold
In the Treasury until enough has been
acquired to begin the redemption of
the notes, Others have proposed to
acquire the requisite amount orgold by
selling our bonds in Europe; others to
fund a portion OF the legal tender
notes in bonds bearing five per cent,
interest, and retire them in that way,
to bring the rest to par by contrac ton;
others to fund them into a bond bear
ing FIVE per cent. interest, to be re-
Issued and again funded.
While the Government is pledged to |
redeem the legal tender notes in coin,
at the earliest practicable period
while the purpose to do so should ever |
be kept in view, yet that period is by |
many not deemed to be practicable |
when there is great stagnation of bust
ness, much labor unemployed, the |
revenues largely fallen off, ard much |
distress and suffering in every part of |
the country.
Very truly yours. o. p MORTON.