The Portland daily press., 1878-09-19
The National Banks,
To the Editor of The Press: I:

~ Hte I.uH0F W WS TTeSS.
The Greenback party are specially hostile to
the National Banks and complain particularly
OF the injustice of the system and enlarge upon
the saving to the nation which would result
from its abolition and the substitution in its
stead of greenbacks issued by the government.
Tney say the system gives an unjust advantage
by furnishing them the profits of q double
capital-of their bonds and their bills for loan
Ing and circulation. But their bonds they buy
and pay for, just as other people do, and GER
tainly are entitled to the interest on them
These, therefore, are their own capital, not the
Governments, But the bills, it is said are
certainly the Governments capital As far as
they are capital this is admitted. It Is the right
to use them, however, that is the real bonus of
the Government to the banks-the bills them
selves cost but little to any one. The banks,
then, fui nish themselves with their bonds and
draw interest on them, just as individuals do
who keep their bonds in their private safes, and
receive from the Government ninety per cent.
of their amount in bills, on their depositing
these bonds with the Government as security
for the bills, thus risking their forfeiture for
the safety Of the bill holders. Where Is the
injustice here? Wherein is the system more
unjust than the old system of State banking,
which prevailed before the war? In our pres
ent banks their capital, which is their bonds
bearing interest-soon undoubtedly to be re.
duced to four per cent, thus compensating by q
low rate of interest for their exemption from
taxation-while under the old system, at most
but a fifth of their capital, aud usually much
less than this, viz the portion kept on hand in
gold, was unproductive; and as to their bills
they were better than given to them, as they
were allowed to print them for themselves and
circulate them to many fold the amount of
their capital. Which system allows the banks
the greater advantage? And, what is more
important which must produce the better and
safer currency, that which is local in its lchar-
acter and authority, admits almost indefinite
expansion, with the slenderest possible means
of redemption, or that which Is national in its
character and must remain stable within the
the limits of ninety per cent. of the bonds de-
posted, which are all pledged for the redemp-
tion OF the bills? Aud now that free banking
is allowed there is certainly no more monopoly
in the present system than in the old one,
indeed there never has been. How many cor
poratiOns in any part of the Union which have
been ready to deposit a hundred thousand dol
lars OF the national bonds with the Government
uaNo CNCi pcou uouiou bu6 us6 OF ninety per
cent In bills for circulation? 1t is well known
that there have been but few such. And why
should there be such hue and cry about these
banks when they are merely copy OF the New
York banks, which had existed in that State
| for many years before the war, being based
| upon State.bonds purchased and deposited by the
| banks with the State Treasurer, and receiving
| in the same way from him bills for circulation?
| Is it not the fruit of the same disloyal spirit
| which complains of the bondholders, because
| rsking their money when the Government was
| in danger they obtained the bonds cheap, and
| are now enjoying the legitimate reward of their
| patriotism by their appreciation?
And nowsas to the substitution of greenbacks
| for the National bank bills. what would be the
| advantage? If they are to be merely put in the
| place of these, leaving the organization Of the
| banks as it now stands with their deposit of
| bonds, etc, see no objection to it and no ad-
| vantage from it. But this does not seem to be
! what is coutem plated. The saving, it is said,
is to be effected by so far at least destroying
the banks as to take away their bonds, and
| thus save the interest on them. These are TO
| be purchased Of course and not seized BY the
| government. They must pay for them then,
| their market value, and hence either borrow
| the money to do so and pay interest for il di-
| rect, or else raise it by taxation and thus take
| from the people what would bring them inter-