Belmont chronicle. [volume] (St. Clairsville, Ohio) 1855-1973, 1878-08-01
IBanksYotes Versus Greenhaol.sL.

Though there are some financial
writers with high title to authority
who maintain that there is neither
safety, economy, nor advantage in any
form Of paper money not secured, dol
lar for dollar, by coin on actual deposit,
It is practically certain that we shall.
have for long time to come a currency
based in some measure on credit. We
are destained to use circulating notes,
either OF banks or of the Government,
and the question next in importance to
that of the convertibility of all such
notes In coin, is whether the Govern
ment or banks of issue hallfurnish the
paper currency. Assuming that the
State bank question has been settled
beyond resurrection by events and the
lessons of experience, 1t is plain that
the contest is to be between the green.
backs and the national bank notes.
This contest has already begun
Though 1t has thus far been con plicat-
ed with that between specie REDEEM ption
and irredeemable paper, it is quite
distinct from 1t in principle. The
greenback may be logically advocated
as against the bank-Dote without CIV
ing up the doctrine of convertibility,
which is as essential to one as the other.
Not only is the National Party de-
manding the abolition of the national
banks and the replacement of their
uyifh fhnln nf tho
but the Democrats, who do not yet
dare to join fully and boldly in all their
schemes of initiation and reputation,
have taken the same ground on this
question In several of the States, aud
are likely to do so In Others. Western
Republicans exhibit tendency in the
same direction, and the contest between
greenbaek and bank-note will probably
develop through the canvass for the
Fall elections. and come up at the next
session of Congress with more life il it
than it was able to show at the last. 1t
is contest that will have To be fought
out, either in connection with that for
specie payments or independent of 1t.
1t is time, therefore, that the question
began to be discussed On its merits.
Convertibility with coin is essential
to the safety and stability of any paper
currency. Starting with that as a
settled point, and admitting that credit
iH to remain in some measure at the
bottom of the currency, that Is to say,
that coin is not to be kept constantly
on hand for the redemption of every
dollar in notes, but that abundant re-
sources and ample security are suffi
cient to assure ecOnvertibility, is it better
for the Government to issue the notes
or for the national banks? 1t is claim
ed that the credit Of the Government is
less liable to sudden shocks or TO chronic
weak ness, and that its resources are
practically without limit on account OF
its power of taxation upon the property
of the people. 1t is further said that
the process of putting its notes in cir
culatiOn is inexpensive, while that 0
Issuing the bank-notes is costly. The
cost of the latter il reckoned as the in
terest Of the bonds pledged for theil
security and the discount charged upOr
their first issue from the banks. The
former OF these items is real, to the ex-
tent of about nine-tenths of such in'
terest, II we suppose that the issue O
greenbacks In place OF the bank note:
would result in the liquidation of al
equal amount of the bonds. The lattel
item, that of discount In issuing IL
notes, is imaginary. inasmuch as they
represent SO much capital sunk in ths
security, and the discount is II legiti
mate charge for the loan of credit
There is, then, certain amount o
cost to be charged against the nationa
bank notes, and offset by some advant-
age which 1t pays for. What is this
advantage?
The proper volume OF currency cal
only be determined by the eXigencie.
of commerce, and should be under tht
control of the business community. 1
cannot be safely left to the Govern
ment, and especially to the caprices o
legislative power directed by so little
wisdom as the American Congress ma,
lately shown on the subject of finance
With the banks it is not determined by
the arbitrary will of Directors, as /.
sometimes alleged, but, like every
other matter Ofsupply and demand, bS
the profits of business. With the Oh
legation to redeem In coin, or tor the
present we will presume either In coiI
or in redeeuIable Government note,
the volume would be determined from
time to time solely by the profit o
issuing them under that obligation
which would correspond closely to tn,
'wants of trade" or the quantity tina
could be profitably used. This resul
could not be attained by any Govern
ment mschinery, and the continu..
tampering to which the currency
would be liable. and even the agitation
of questions of expansion or cOntrac
tion, which would be inevitable, oc
casiOn losses. compared to which tn,
direct and definite cost of getting bank
notes into circulation Is the ueres
bagatelle. The pledge of bonds, ex'
ceeding by one-nlnth In amount thu
issues of notes, affords an ample secu
rity, and, with the obligation of tn,
Treasury to redeem ifthe banks do not
gives to the system the full benefit o
the Government credit. Besides this
the capital and resources of q bankin,
association are definite thing, cover
ing Its liabilities, and immediatel,
bound, under law, for their security
The Government resources, command
ed by the power of taxation, are an in
definite thing, subject to the will O
Congress and the influence of politics
Currency Is an instrument of com merce
and should be supplied by commerce
and the business and industries of tn
people should be as free as rossibl,
from the disturbing and deranging in.
reference of Government.-N.Y Y Times
i
Tie Greenbak Party.
The great Republican party Is tn
original greenback party, and the onl.
true greenback party of the present