Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1878-08-21
The Bank Note and Greenback

What the greenbackers and the democrats
clamor for is a currency consisting merely of the
Governments promises, without any definite obi
CATION to pay, OF any security for conversion with
coin on demand. The opposition to the national
banks Is expressed chiefly in vague denuncatons
Of monopollsts and money lenders, aud the asser-
ton that they make undue profits from the prvi-
leges of circulation, which might be saved to the
people if the Government furnished the currency.
A statement read before the Bankers Convention,
now in session at Saratoga, shows clearly how lit
tie ground there is Tor this insane cry. The bank
corporations, as the business is now distributed,
are comparatively small associations, and the
heavy stockholders are very few. The shares are,
for the most part, held by people of moderate
means, who wish to pat what they have into
investment which will insure them a far annuity.
More paid out 10 taxes than is received in inter-
est on the Government bonds pledged secdrity
for circulating notes, aud the profits Of the bust
ness are not, and 10 the nature of things cannot
be, IN excess of those obtained by the equally pru-
dent use of like amount Of capital in any other
way. With banking free to all owners of capital,
and shares IN the associations open to all pur-
chssers who have money to invest, compel ition
very speedily equslizes the profits to those that
could be obtained by any other employment of
capital aad of SIX Ill in the conduct of business.
Among the shallow criticisms which are con-
stantly reaching US, is one to the effect that the
is usually expressed, to the banks, whereas there
is no more reason why it should furnish them with
funds to make profit from than anybody else.
This would be too silly fcr notice were it not for
the fact that many people have vague and con.
fused ideas to what the bank notes are. Of
course, the Government furnishes no money and
lends no notes to banking associations. 1t merely
prints the blanks for the notes for the sake of
securing uniformity and being able to prevent
counteIfetng, and the slight expense of this pro-
cess is reimbursed by tue per cent tax on circu-
lation These blanks become notes only when
they are signed and issued by the officers of the
bank receiving them and then they rest on the
credit OF the institution and made good BY its
resources. The bank is bound to redeem them,
and though in case OF its failure to do so the Gov.
eminent takes them up II holds assets of the bank
for the purpose III the shape of bonds deposited
with the Treasury before the notes are furnished
Again, il is urged that the public pays for get
ting the notes Iuto circulation in the discount on
bank loans, which would be avoided by direct
issue by the Government We have see this ex-
pense reckoned up into enormous figures. But it
must be remembered that the notes, when issued,
represent actual capital embarked IN the banking
business, and Dacaed by assets. The bank
loans lis own credit, winch has been Obliged to
secure in the amplest manner. There is no
charge paid by the public in It's borrowing cspaci-
ty, which would not tall upon 1t if the loans we're
made In any other form. Ii is impossible to trace
in the legitimate discount of banks any expense
to be credited to the people as an item OF cost in
maintaining the bank circulation.
The errors aud misconceptions this subject
are innumersble. When they are cleared away,
most OF the objections urged against the national
bank system disappear. The opposition is in fact
only disguise 10 cover the real design Of its pro-
moteIs. winch Is To put another obstacle in the
way OF a return TO specie payments. With the
banks in existence the process is cOmpar atively
easy, and promises 10 be permanent, provided the
Government Is held TO the policy of II deemng its
notes. They present the ground ready prepared
on which TO MAINTAIN resumption, aud while the
system retained tnere would be q fair prospect
OF ultimately getting the Government out of the
field. That The greeubackers are sharp enough
TO see, and hence TINS crusade, which is purely a
movement IN the interest Of rredee mable paper,
and 10 accepting IL the democrats must accept it
as such.-Nep York Times.