Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1878-08-29
sHERMAN ON THE NATIONAL BANKS.

SHERMAN ON THE NATIONAL BANKS.
Secretary Sherman, in his speech at Toledo.
placed himself squarely upon the record as
the champion of the national banks. He
favored them
1. Because they furnished better and
more stable currency than the State banks
that existed in ante-bellum days.
2. Because their currency not being re-
deemable directly in gold or its equivalent,
the secretary of the treasury can more easily
resume and maintain specie redemption of
government notes of ISSUE or greenbacks.
3. Because through their agency the cur
rency can be more readily contracted.
4. Because they pay taxes on circulation
to the national, State and municipal govern
ments.
5. Because they furnish an avenue for
the placing of over four hundred millions of
government bonds, deposited by them for
security for their circulation.
No one will deny that the national bank
currency of today is infinitely better than
the State bank currency in circulation be-
fore the war. 1t is more uniform, safer, and
less liable to be counterfeited. But the ad-
vantages possessed by the national over the
State currency are possessed in more emf
nent degree by the greenbacks over the ma
tional currency. Greenbacks are guaranteed
directly by the government, and if properly
honored, as they will be whenever the Demo-
cratic party obtains the ascendency in
Congress-, will be the equivalent of gold for
all commercial PURPOSES including the pay
ment of customs duties. Every argument
State currency will apply with double force
in favor of greenbacks over national cur
rency.
The fact that the national currency is not
redeemable except in greenbacks is no bar to
resumption of specie payments. If man
wishes to convert national notes into gold, all
he will have to do is to get greenbacks for
his currency and gold for his greenbacks
It is absurd to suppose that the non-convert-
Utility of the national notes will interfere in
any way with resumption of specie pay
ments, and Mr.. Sherman begs the question
when he puts in any such claim as reason
for the maintenance of the system. 1t
would be just as easy, as claimed by Mr.
Thurman, to maintain $66s,OOO,OOO green
backs at par with coin as it is to maintain
$346, OOO,O 900 greenbacks and 1922, 100000
national bank notes at par with coin, and
Mr.. Sherman's attempt to prove to the con-
trary is simply preposterous.
Mr.. Sherman does not openly ayow
that he favors the national banks be-
cause they afford means for the contraction
OF the Volume of the currency. He states il
by implication, however, when he shows how
the banks have the power to retire their cir.
culating notes at will, and have exercised
that power to a certain extent. This power
to issue or retire their notes Mr.. Sherman
regards as one of the chief merits of the
system, but by all clear-headed fnanciers
and advocates of sound, stable, non-fuc-
tuating currency it is one of the chief objec
lions to it.
Mr.. Sherman claims that the national
banks pay total of nearly seventeen mill
ions of dollars in taxes to the national, State
and municipal governments, and that there
fore they should be maintained. He fails to
state, however, that they are taxed only on
their circulation, which is ten per cent. less
than half of the capital invested and which
ought to be taxed. There are now on de-
post in the treasury as security for national
bank notes outstanding 1854, OBJ, ATT in
United States bonds which are not taxed.
1T these bonds were released through the
abolition of the national bank system, that
amount of capital would in all probability be
diverted into other channels of trade, and
thus become liable to taxation. Instead,
therefore, of paying only seventeen millions
OF taxes, the capital invested in national
banks should pay thirty-tive millions or
more.
The excuse that the banks are benefit
because, as security for their circulation thew
have been compelled to purchase United
States bonds, is an impotent one. Our
bonds have never yet gone a-begging for
purchasers, and there is not the slightest
likelihood that the government will ever be
embarrassed because of it's inability to sell