The Grange advance. [volume] (Red Wing, Minn.) 1873-1877, 1876-05-03
The Republican on Currency.

The Republican on Currency.
The editor Of the Republican
occupies nearly q column defending
himself from the charge of incon-
sistency brought by our Cannon
Falls correspondent. -. He admits
that he advocates national bank
currency, but he intimates thai: bank
notes are "redeemable at the pleas
ure1Df the holder in gold COIN" Such
is not the case with the present ma
tional bank currency, nor does the
bill recently introduced into Con-
gress by Mr., Willis propose any
thing of the kind. 1t expressly
makes the notes redeemable in
greenbacks, which are made con-
vertible into 4 per cent. bonds. We
presume that, when the greenbacks
are all retired, it is intended to
make the bank notes nominally re.
deemable in gold, but how long will
it require to retire them, if it is a
losing business TO invest in 4 per
cent. bonds, as the editor Of the Re-
publican asserts?
But our neighbor ought to know
that, although nonninally so, bank
notes never have been and never
will be really redeemable in specie.
1t has always been and always will
be "ueeessaxy'," at times, for banks
to suspend specie payments. Un-
der the old system the consequences
Of such suspensions were heavy
losses to. both depositors and note
holders; but under the present sys-
TEN the loss falls upon depositors
alone, because the notes are secur-
ed by the pledges of government
bonds. 1t is sheer nonsense to talk
about paper currency redeemable
in gold on demand, unless the sys-
tenn involves a restriction upon the
issue Of paper, combining its volume
to the amount of gold actually held
by the banks as redemption fund !;
and as such restriction would make
the issuing of bank paper profitless,
it is safe to say that it can never be
put in operation.
Our neighbor pretends to say that
because the bank currency is nom-
inal]y redeen'able in gold, there can
never be any danger Of an over-issue
and consequent depreciation. The
entire experience of the world
proves this assertion false, and there
are still too many alive who have
suffered from the depreciation of the
currency Of wildcat" banks, for
any considerable number to be de-
ceived by it now. The old CONT
mental currency is prominent Illus
tration Of its falsity. What consti-
tutes our present bank currency an
Improvement on the old bank cur
rency is the fact that the national
banks have to deposit government
bonds as pledges to secure their
notes. If bank fails, the notes
are bought up by giving notes of
other banks or greenbacks for them,
and are exchanged for the bonds
which have been deposited in pledge
for the circulation of the defaulting
bank. In other words, these notes
are, in a certain way, convertible
INTO government bonds.
This being the case, why not &C.
cept the bank issues Of the country?
Simply because of the fact that, un-
der our banking laws, the banks get
interest on their bonds and interest
on their currency, which is a double
interest upon their capital; and this
the people have to pay. AS the
greenback currency is just as safe
and good as the bank currency can
become, and as the use of it relieves
the government from the payment
Of interest upon that much of the