Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1878-12-05
THE N4T1ONAL RayEs

In Mr.. Shernan's report he goes out Of
bis way to enter plea on behalf Of the ma
tional bank system. This is consistent with
his past policy, and perhaps we have noright
to find fault with it. He makes some sd-
missions, however, which show that he is not
unaware OF the drift Of public opinion on
the subject of their continuance. Admitting
that the system is still on trial, he presents
its advantages IN as strong light-perhaps
stronger-as the facts will admit. He grants,
however, that the expediency of continuing
it is debatable. He says:
Whether the power to issue circulating notes
should be granted to private corporations or be
exercised only by the government, Is purely a
question Of public policy and public interest.
In behalf of circulation issued by the gov
eminent, it is claimed that interest is saved to
the public on the full amount of the notes
issued. To this it is replied that the issue of
such notes necessarily involves their redemp-
ton in coin, and this can be secured only BY
coin reserves and the ordinary machinery Of
banks. If the banks issue notes they expect
to derive profit from the loan, but this profit
is diminished by the burden Of redemption, by
the large taxes imposed upon the franchise,
and by the risk always incident to the issue of
the circulating notes.
We are unable to see why the issue Of gov
eminent currency unnecessarily involves their
redemption in coin," which 'scan be secured
only by coin reserves and the ordinary ma
chinery of banks" Paper money has
always been, and always will continue to be,
the principal circulating medium of this and
every other civilized country on the face of
the globe. If currency was issued guaran-
teed as of full face value by the government
of the United States, there would never be a
call for it's redemption, except for p urposes
Of exchange with foreign countries. For
such purposes OF exchange there is ample
machinery now in existence, all Of the prin-
cipal importing cities having a spb-treasury
authorized to transact such business. But if
these were found to be inadequate an United
States depository might be designatedin each
of the cities as at present. It is not neces-
sary that these repositories should be ma
tlonai banks. A private institution could
fill the duties just as well, and, under prop
now performed.
With the abolition OF the national bank
system the banking business would not cease.
These institutions ara necessity to trade
and commerce. Indeed, at present more
than one-third Of the banking institutions
of the country are not organized under the
national banking law, and the private banks
stand as we'll commercially as the national
banks. It is true, as stated by Mr.. Sherman,
that the system cannot be legally abolished
before the year 1883, but it is not too soon
to commence the discussion of the sub
ject or to pass an act of abol-
ishment. The change, when made, must
necessarily be gradual, for to retire the cur
rency issued by these banks at one fell
swoop would prove disastrous to the material
interests of the country. But by gradually
retiring the national bank notes and substi-
tuting greenbacks in their stead, trade would
experience no shock, and in the end we
would have better and a safer currency
than we now have.
1t is wrong in principle to give to private
corporations the right to issue currency.
That function belongs exclusively to the
government, and ought to be exercised by it.
If there is any profit to be derived from such
issue the government ought to have it, and
the public will not be satisfied until our cur
rency in its entirety shall become uniform
and absolutely safe.