Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-05-22

AAOc OdhAAhS. DCAhcOl OOI0OA NdAAS
the South and West not to be deluded
with the hope of cheap interest as long
as the present national bank system
lasts, however free it may be made. AS
long as it costs S115 In greenbacks to
buy bond upon which only $50 is is
sued n national bank currency, it is
self-evident that the sections which
must purchase the bonds will only les
sen their loanable capital by such in
vestments. The East holds most of the
bonds in this country and the develop
ment of any demand for them would
only enhance their price and make the
difference greater than SIS on Sis.
The Senator's views of what ought to
be done under the existing circum.
stances are thus given.
1t is to my mind clear that the Gov
eminent ought to do one of two things,
or both.
First. It ought to remove the tax on
State bank notes, and cease to attempt
to furnish currency to the people; or,
Second. 1t ought TO make its own is
sues, and not national bank notes, 1.-THE
money of the realm"
As TO State banks. If these banks
were allowed to Issue threeforone upon
gold, 1t is plain that interest would be
lower; for bank with 100000 gold,
and circulation of three for one, can
better afford to lend its $780, 900 at six
per cent than a national bank with
100000 in bonds, and $4,000 circuls-
ton thereon, can afford to lend at twelve
per cent. The difficulty is to confne
these banks to the amount of issue al
lowed by law Scotland, for example,
thought it safe to allow an issue of
four for one, and greatly prospered IN
der the system; but the history of
Massachusetts banks demonstrates the
danger to which refer. Between 1926
and 1898 their issues varied from four
to eight and three quarters for one IN
gold. | fully recognize the dangers of
this system, but safeguards can be
thrown around it. With all its evils,
it is better, far better, for the pro.
Queer than the national bank system,
under which We shall never see money
uniform in the agricultural districts at
a reasonable rate of interest, nor ever
prevent its concentrating at certain
seasons IN the mOneyed centers.
If, however, State banks are still to
be taxed out of existence, let govern
ment abolish the existing monopoly.
Upon what principle Of justice can
Congress legislate out OF existence
greenbacks:which cost the people no
tax, and supply their place with ma
tional bank notes, issued on bonds,
which cost the people millions per an
mum? Yet this is precisely the only
measure now before Congress, after
eight months discussion in and out Of
that body. The national banks now in
existence are based on bonds for which
the people pay over S20,000,O00 per
annum, and IN the short space of twen-
ty-five years the compound interest paid
by the people upon these bonds will
amount to more than the entire nation
al debt. Why not issue gresnbacks and
bug up these bonds, and stop the inter
est, and annihiJate such a system? The
Senator argues at length against con-
traction or specie resumption, but does
not consider it an open question, with
this Congress at least, closing his re-
marks as follows:
There is nothing in these views hos
tile to the sentiment, which if the ques-
ton were open, might d5mand gold
and silver as a circulating medium.
But the issue is not whether we shall
have paper money or gold and silver
money. Government has fixed the pol
icy of making paper issues the cir
lating medium of its people,
He therefore favors an increase of
greenbacks, interchangeable into bonds
bearing a low interest, by which the
volume would be made elastic. He does
not seem to have reflected how, under
this inter-convertible bond and green
back system, pools of millions might
be formed to expand or contract the
volume of currency just at those criti-
cal turns of the season when al COM
merce would be demoralized thereby, to
the profit of the spectators. We can
not ignore the fact that in Our day a
jaw Gould or a Vanderbilt could or
ganize 4 pool to lock up fifty millions
of greenbacks, creating a scarcity that
would induce food of perhaps hum
dred millions from the Treasury by
of bonds. Then on top of
this the pool could unload, causing a
tremendous initiation Of current values. |
OF course the contraction of recon
version into bonds would soon begin;
but the pool, having raked in their |
profits, could in like manner exagger-
ate the normal contraction, and pre-
cipitate a frightful depreciation of |
values, reaping a second harvest of |