The New York herald., 1877-09-13
The Bankers C0nventiun-Speec of
Sir Francis Hincks.


Sir Francis Hincks.
The most noteworthy thing in the pro-
ceedings at Association Hall yesterday was
the speech of Sir Francis Hincks, of Mont
real He was Finance Minister of the Do
minion in 1869, when the banking system
of Canada was established on its present
basis in pursuance of his ideas. His solid
cast of intellect and mature knowledge of
fiscal and monetary subjects enable him
to speak with weight which does
not belong to men who lack his
large experience and practical knowl-
edge An assembly Of eminent busi-
ness men is no proper place for gushing
defamation or wire-drawn arguments on
points of constitutional law. There was
nothing fighty or strained in any part of
Sir Francis Hincks' remarks, which were
throughout an example of clear statement
and pertinent suggestion. Of course there
may be difference Of opinion as to the
value Of some of his suggestions. but there
can be none as to the fitness of his manner
in addressing business audience.
Sir Francis Hincks has a natural partial
ity for the Canadian system, of which he
is the author, and which has thus far worked
we'll Whether some of it's characteristic
features can be successfully transplanted to
this country, as Sir Francis recommends, is
n question which deserves the respectful
consideration of the American bankers. In
the Dominion the government issues notes.
as our government does here. But it issues
none in demon nations between $50 and 81.
The banks have monopoly of the inter-
mediate denominations The large notes
of the government-$50, 500, $500 and
81, 1,O0O-do not enter into general circula-
ton, but are used by the banks as part of
their reserves.
In accordance with this plan Sir Francis
suggests that it might be well to continue
the greenbacks, but suppressing all de-
nominations between $50-or, perhaps.
$10O-and So. We fail to see any advantage
in continuing the greenbacks of lower de-
nominations than SIS. When bank notes
are issued on the mere credit of the
banks it may conduce to the safety of the
laboring class, whose wages are paid in
small notes, to substitute government
notes in their place. But in this
country all bank notes are issued on
the credit of the government, which
is responsible for their ultimate redemption
The small notes are just as safe as any part
of the bank circulation, all of which is am
ply secured by deposits of government
A.
if the banks fail. With this rectfication Sir
Francis Hincks' plan might be worth trial
by suppressing all the greenbacks below
$50 or 500 and requiring the national banks
to keep considerable proportion of their
reserves in greenbacks, they might perform
useful Office in our currency after
the resumption of specie payments
This plan would economize the use
of gold. 1t would render resum ption
more easy and probably more safe by pre-
venting severe drains on the bank reserves
under heavy foreign demand for gold
But would it not be simpler to reduce the
greenbacks to fixed moderate sum, but
permit them TO be issued in all denomina-
tions, as at present? If legal tender notes
are to be retained it would be expedent TO
allow the banks to redeem their own notes in
them, which they could not very well do
on Sir Francis IIincks plan. A man
bringing u ten or twenty dollar
note TO bank for redemption would
ordinarily prefer government note of the
same denomination. here would, un-
doubtedly. be large economy of gold
in retaining some $3.50 100000 or
$500, 600 Of greenbacks, requiring
the banks to keep two-thirds of the
reserves against deposits in grecnbacks and
allowing them to redeem their own circula-
ton in government notes. On this plan we
could maintain specie payments with less
than half the amount of gold that would be
required if we were to discard the
greenbacks. If the greenbacks were
made to play the same part in our
currency that Bank of England notes do in
that Of Great Britain our circulation might