Ottumwa weekly courier. (Ottumwa, Wapello County, Iowa) 1872-1899, 1877-09-19

his provision about $3G,OOO.OO0 of
bank circulation has been voluntarily
retired.
We know 1t has been stated that
there will be no greenbacks that they
will all be destroyed! There never
was a shadow of cause for such
Within the past few days
the Hon. John Sherman, Secretary of
the Treasury, has written brief,
but pointed letter, giving the truth
of this matter, as we have stated it.
This letter we have published recent
ly.
To the third interrogatory we reply
that the greenback and the national
bank notes are, alike, good beyond
question, and no preference can be
given the one over the other in this
regard.
To the third interrogatory we re-
ply that the difference in interest the
government would have to pay would
be just the amount of interest due on
the bonds.
In reply to the fourth intcrrogatory
we state that the security for the cir
culation of the national banknote is
government bonds belonging to the
bank and held by the government in
the proportion of 500 in bonds to
every 800 Of circulation. The chief
practical difference between bank
notes and greenbacks is as stated in
the interrogatory-the legal tender
character of the one, and not of the
other. 1t should be remembered,
however, that national bank notes are
redeemable in grcenbacks.
In answer to interrogatory 9Th we
say, that most men would prefer to
have out their notes not bearing in
tcrest than otherwise; but very few
of such notes are taken except on
short time, in business transactions,
and they carefully provide for interest
if not paid when due. We will add
by way of suggestion, that among
men the case was never heard of
where the interest-bearing notes of
an individual were taken up and SUBJ
stituted by non-interest- bearing notes,
and if such were to be enforced
between creditor and debtor it would
be declared an outrage upon justice,
In answer to interrogatory 9th VIC
reply, the basis Of capital in national
banks is the government bonds gen.
orally bearing five or six per cent
interest. If these banks were dc.
stroyed it could not destroy the bonds
and therefore the interest would have
to be paid just the same, while not a
dollar of the capital in the bonds
would pay any taxes. Under the
national bank system this bond CAPT.
tai indirectly pays taxes on the bank
stock represented by the bonds. II
round numbers the banks have paid
since their establishment in GA, $50,
100000 to the general government
and 1914, 100000 in state, county and
city taxes. The bonds, which arc tn,
soul of the bank, the capital invested
therein, can only be diverted into
other channels of'business by the gov
ernment's paying them off; the inter
est on them can only be stopped by
their payment therefore it is as plair
as that two and two make four, tina
SO long as the government has bonds
upon which the present system O.
banking may be based, so long vii
the national, state, county and city
governments derive a large revenue
therefrom that they otherwise would
not. True, the men engaged in bank
ing might, if the banks were legisla.
ted out of existence, sell their bonds
and employ the capital in other bust
ness; still the bonds would not bt
destroyed and the interest would
have to be paid just the same. The
hundreds of millions of bonds form.
ing the basis Of these banks would
were the banks destroyed, in being
cashed, find their way, in part a
least, to foreign markets, yet the in
terest must be paid and, what would
be worse for us as a people, that in.
terest in coin would be taken out OF
the country. 1t is therefore plain
again that the national banks in
no way serve to curtail our
currency circulation, but in
fact are circulation based
upon comparatively dead Cap.
ital. But, though our querist does
not say so we suppose he contem'
plates the destruction of the bond:
to secure the national bank cir
culation by converting them into
greenbacks generalization and SO
swell the greenbacks of the country,
to say in round numbers 100000 600.
That is to say he would replace the
National Bank circulation of $3l5, 000,-
600 to-day with greenbacks. This
can, of course. only be done by the
government buying the bonds for
coin and issuing the legal tenders
This it is impossible to do without
violating the fundamental law of the
land. All will remember how the
unconstitutionality of these legal
tenders was declared far and wide
when issued even in time of the great
rebellion. 1t is well known part of
the history of the country, that after
the war closed Salmon p. Chase the
author as it were of the greenbacks
as Chief Justice Of the Supreme Court
decided their issue unconstitutional,
carrying with him majority Of the
Court. Since then upon a re-organi-
zation of the Court this opinion was
only reversed by the decision of five
Of the Judges against four.
The whole question turned on the
existence of war-a necessity imminent
to save the Governmcnt-when all
else failed. 1t is the sheerest folly to
suppose that now in time of profound
peace the issue of over $500, GOO, 600,
or any other sum Of greenbacks
would or possibly could be sustained
by the court.
Again-grecnbacks are still ire
deemable, they arc still q forced loan
by the Government and bear no in
terest. Therefore, the substitution
Of greenbacks for Understanding
bonds is the forced act of the Govern
ment paying its interest bearing note
with a nOn-interest promise to pay,