Buchanan County bulletin. [volume] (Independence, Iowa) 1869-1891, 1878-09-06
SENATOR ALLISON.
Concluded from first Page.

OrS and managers were politicians, and
sought to control elections. How much
more dangerous would this power be
when exercised by the Secretary of the
Treasury on behalf Of the party which,
for the time being, would control the
administration of the government! The
power thus conferred would give the
Secretary of the Treasury more author
ity over the property and earnings of
the people than is now exercised by any
monarch on earth. That it would al
ways be wisely welded cannot for a
moment be supposed. The safety of
the country rests in establishing a sys-
tenn Of currency flexible in its nature,
to be regulated by the wants of bust
ness, without Congressional informed
ding.
Again: This would become a central
lied power, either at Washington or
New York, remote from the great body
of the people, managed by politicians,
and not by men of business, providing
no facilities for local exchanges and dis
counts in the remote parts OF our coun-
try-except that which might be fur
nished by the Shylocks of each neigh
borhood. Is it likely that the people
would long endure such centralized
power
But it is said that this system would
result in the saving OF interest, since
this money, when first issued, could be
used in paying on the interest bearing
bonds. OF course the saving would be
in interest, as these Treasury notes, be-
ing promises to pay, would still be a
debt, though without interest. Now II
it is intended to keep these notes at par
in coin, specie reserve must be held Tor
their redemption. This reserve must be
borrowed, and interest at four per cent.
must be laid upon it. Assuming the re-
serve to be $150,000,000, the annual in
terest would be $6,000,00O. But the
National banks now pay ono per cent.
tax on their circulation, or $3,25O,0OO.
They pay State and municipal taxes on
all the bonds they hold, which amounts
annually to $0,0O0,000 more, so that the
cost to the people of the substitution
would be at least $17,000,000. The in
terest that will be paid upon these bonds
now held by the national banks, at four
per cent. interest, would be Sl4,OOO,00n.
SO that the loss to the people by the
proposed substitution would be more
than $3000,000
But it is said that our national bank
ing system is a scheme for the perpetu-
uation of our national debt, which should
be discouraged. If the bonds held bv
the national banks were paid off, our in
tcrest bearing debt would be 81 5000
600. This sum can only be paid by tax
alton. 1t seems to me it would be time
enough to consider this question after
we shall have paid off a thousand mill
ions, at least Of our debt. And il we
shall pay $25, 100000 per annum, on the
principal, besides the INTEREST," it will
require forty years to pay 81 ,000,o0O,-
600. 1t seems to me that when this
point is reached, it will be time enough
to discuss the dangers of Il pcrpetuation
of the public debt.
Again: it is said that this system
tends to combine, concentrate and IN
tensify the money power. How can
this be true? These banks are nothing
more than two thousand or more local
banks, subject to State and municipal
taxation, and required to give the ut
most publicity to their transactions; al,
so subject to governmental taxation and
revision. And all of them combined are
as nothing, compared with many 9TH
er of the great interests OF our coun-
try. The savings banks or the private
banks, each have more money and cap
ital than all the national banks. The
national banks have no influence in Con.
gress, as is shown from the fact that al
though they have persistentig asked, for
the past six years, to be relieved from
the tax on deposits, no bill for that pur-
pose has even been reported by com
mittee of either House.
Again it is said that they have spe-
cial privileges, and these are dangerous,
ANY five men can organize bank.
Therefore national banking is free.
And the special privileges afforded the
national banks are so great that they
have voluntarily surrendered S30,000,-
600 of circulation within the last three
years.
But it is said that if the government
is to issue part OF the currency, why
not all of it? I answer that this govern
ment currency, Oh a specie basis, is to
some extent an experiment. We issue
S347 100000 on the faith Of the nation,
and upon the belief that it will always
be kept at par with coin; whilst the
Bank of England is authorized to issue
only S75,000,000 on the faith of the ma
tion-our issue being four times as
much. The Bank of England issues n
addition, circulating notes equal to the
amount deposited. Our laws provide for
certificates of deposit for all coin depos--
tied, and these certificates do now and
always will circulate as money; because
for each dollar in circulation there is a
dollar in the treasury SO that we have
nov precisely the system of the issue
department of the Bank of England,
And our paper money can be enlarged
by the deposit of coin in the treasury,
and thus more convenient circulation
secured. Before attempting to enlarge
upon this system by the sudden issue of
nearly as much more government paper
as is now provided for it seems to me
wise to test the experiment upon winch
we are about to enter. Senator Thur
man says the Ohio plan is that of grad
ual substitution Just what is meant
by this Ohio plan" / do not know. But
he calls reduction of $3,000,00O of le-
gal tender in three and half years, a
rapid and sudden contraction" of the
currency. Accepting this definition, it
would probably take twenty or thirty
years to make gradual substitution"
according to the Ohio idea. But this is
not the plan generally proposed which
is a sudden and immediate change from
one system to another. Now is it pos
sible that the present system of national
banks can be uprooted, without serious
ly disturbing, even destroying, the bus
mess of the country-especlally when
the country is adjusting itself to a spe-
Gle basis? 1t seems to me that to throw
this disturbing element into our finances
now, would be folly only equaled py
that other folly perpetrated few years
ago-the demonstration OF silver.
PROFITS OF NATIONAL BANKING.
1t is a mistake to suppose national
banking is profitable. If it were so,
more capital would embark in it. That
it has been profitable in the past | do
not deny. But these profits have dim
inished during recent years, and will be-
come less when our debt is converted
into four per cent bond. Now, with
bonds at five and six per cent, the profits
on circulation will be wholly nominal
I am not prepared to say that our
nrosant hank mo svtam is the host that