New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1875-12-27
+ FACTOR IN THE FINANCIAL PROBLRM

WHY THE NATIONAL BANKS SECRETLY OPPOSE THE
Schema CONTRACTION OF The LEGAL ZEN
DER CIRCULATION NECESSARY.
To the EditOr OF The Tribune.
SIR: Nothing can be more true nor more
timely than the remark in your editorial about The
Presidents Speech" IN to-ays TRIBUNE, that we are
not one step specie than before it 1.-THE compromise
currency bin passed. We making sort OF pIepar
alton for assumptions aud when the date assigned for
that unless we speedily rouse ourselves, we
shall not resume"
now disputes the fact that our paper dollar Mt present
worth only 50 cents; that is, that gold dollarwil
buy - cents worth more OF any commodity than paper
dol II will purchase The problem for solution then Isl
Ho shall the paper dollar be made worth 100 cents in
col. We all admit that the that it is not now
worth that because there is more OF II than gold
ca be found redeem n the question be asked how
much more no definite reply he given nor would il
help the matter if there could be. But II IL asked
what portion Of the currency IL obviously redundant
the answer Is at hand 1t is unqestonably that part of
II for which provision for redemption has been made
viz the greenback or legal tender notes. These
constitute full half OF all currency; they the
promise tn pay" of the Government, made in its dis
tres aud should have been the very first of its debts to
be DISCHARGED II Is misfortune that the very
norton Of our currency th should be first got rid OF
lust that part that by most absurd complication in
legislation, we almost p0werle-s to touch
The greenhacks devoted. by solemn enactment to
the purpose OF redemption OF the currency issued by the
National banks the banks, their part, having first dc
posied security therefor with the United states Treas
urer in the shape of United States Government bonds
examine the present attitude Of the National
banks with regard 10 the question OF resumption ed see
if it il not necessarily of hostility. If it be,
\, it not plain that there has been hidden factor
i'm the problem we have been discussing for these
last 10 years The banks, in the present condition Of az
fairs are eaioyng "a very lucrative, II not anomalous
position They deposit with the United states Treasurer
"a security for their circulation, the bonds of the Govern
men the interest which they. thoy have right to
do collect for their own benefit. This interest we VIII
call profit No. l. In return for the deposited bonds
they receive from the Government national bank bills
which, as they legal right to do they loan to their
customers the discount on which VIII call profit
no 2 As they enjoy the Government tmW7m1t'T
their dcposits are naturally large, and por-
ton Of these also they have right
o DO they loan Ia their customers tine discount on which
We ia cal profit No. g. These facts account for the Il
per cent dividends declared well the enor
nous surplus that nak the stoek Of OF these i'll
stitutons worth on their books 100 per cent premium
We must suppose then that the banks have good reason
for being coneted with The present 'ate of things am
deprccajinC an" change But this statement ~ no
means exhaJs,s the subject.
right To redeem J! Their clcuaiioh IN ir-l tch"rF9
or grrCubacks. Can anything be more supt'inely IL
dcrOus than thisi Now, IN east OF lhe ralIlhg
in and canoeing OF me grcthodrh7 .! tic hONtIIl,
where would the banks stand Clearly they must either
redeem in CON, rcmain in SUSPENSION. on 20 INTO iyi
ton. We an know what the result of Mr.. McCu-
iOchs effort 10 contract ana there can DC niue oubt
that tine repeal IN 1865 O The Retiring Act al 500 was M
obedience to the mandate Of the power that advised
thc The 26O1O 900 1T the Fifth Avenue Hotel
consultation lf tins prologue Witn us lntllnttlOh pt
correct We are brought to the consideration OF
the concrete question, at Whose expense - inc
coin be provided whereWlth To meet re-
sumption The banks are, primarily, private
concerns established Tor purposes OF prom 20 tnelr STOCK
holders, and II they have made eNtdOr tlary glns Dy
reason OF arrangement with the Government To
which they reluctantly asscned VIVA shall say them
nay On the Other hand is 1t not apparent that in our
prOractcd financial trouble are paying the price or
that the cost should be borne by the Government
people Ut Target In fine, If the banks have the power
Ia postpone resumption ana are Secreiy using thai
power under the instinct Of sefprescrvaon should not
The legislation OF the next Congress 0e shaped 10 meet
tls issue, aud the gold received by the Government
be- exchanged with the banks for greenbacks 10 be
Cancelled IL should be borne in mind that this gold
the Government no premium and that with the ne
cOmpli,hed fact would aIvocate the passage Of
providing that all tue gold received into the United states
Treasury he exchanged weekly with pro rata
10 their circulation for gTcenbacks the greenbacks to be
destroyed received by the United states Treasurer.
Tho instantaneous eject Of this measure would be re-
business confidence and as ltd execution
cerded the enhancement IN proportion OF the value oi
rceubacks and by consequence of the national cur
rtncy. In very truth, resumption would be begun
with the first exchange. The banks should have
privilege OF in suspension unt their
cunulaon gold reached 30 per cent OF their circua
on. below which they should be deharrrd by law from
allowing their specie reserve to ia But the retirement
prernbacks should proceed until they all paid and
destroyed and their account on 10" Government ledger
balanced and finally closed and II their cancellation
duced deficiency In the currency the banking enter
prise O The country might vel he trusted To supply H.
II ia beside the for writers this subject 10
quote the example ~ Great Britain In 1921, ard OF
France her recent with Prussia. The present
financial condition Of Government has precedent.
Like Adams fall, II stands alone" a. ROBERTSON.
HunGy. y. j., Nov :, S75.