Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1878-11-15
From the New York World (dcm)
Government Paper and Bank Pa
Der.

| We make room to-day for . communication
from correspondent in Pennsy lvania, because it
10 concise statement of certain inquiries which
| in one form another come to US daily from Va
lious parts of the country. As to the opinions of
Elk. Secretary McCulloch on the subject to which
our correspondent refers, we can give him no
light, nor is it necessary that should give him
any. The States, in our opinion, never intended
to confer and never have conferred upon the gen.
eral government the function of banking. The
government at Washington can "coin" money and
regulate the value Of its own COINS 1t can also
borrow money, and therefore it can emit bills Of
credit; but we are at q loss to conjecture how
Congress why Congress should make
money" or anything that 10 to be put to the
uses of ''money" out Of anything but coins. I'm
der the constitution as we read it. legal tender
can be made of nothing but gold and SILVER"
| No single State OF the Union can coin money or
emit bills of credit or make legal tender of any
thing but national coins. The bills Of credit"
which are prohibited must be bills issued by q
State, pledging the credit of State and designed
to circulate as "money" on the credit of . State.
Bank notes issued by State banks are not such
| bills Of credit. So much for notions of the
law, which, as we think. practically dispose Of oil
the inquiries of our correspondent.
But If this not the law we should con.
denim the making Of the national government Q
|
convertible into coin on demand, never has stood
and never will stand very long at par, while if
government paper is based dollar for dollar on
coin in Its vaults nothing is saved by issuing 1t
to coin. Ii paper money is issued by = govern
ment without being yoked to coin 1t 10 based sole
ly on the credit of that government it is local In
its circulation; it 10 arbitrary In volume it is liza
BILE to disastrous augmentation; 1t may be con-
venient, but it will become q false standard Of
values. 1t is the national credit used as money.
1t may transfer private debts but it cannot pay
them. 1t is simply forced loan and direct tax.
Its volume is subject to the mutations of political
parties, and therefore no time transactions can be
safely based upon it.
That paper money is more convenient than
coined money every one feels. Paper money is
therefore needed. How can We get paper money
which shall be as reliable as coin Clearly, if At
all, through q system Of banks, properly organ
lied, protected outtressed and restrained by law,
and permitted only to issue currency convertible
into coin on demand. Is such q safe currency
practicable in this country under any
other constitutional system than that which
is now in operation? Can the differ
ent States be trusted in the matter, or must
Congress prevent by taxation the establishment Of
State banks of issue as 1t now does 2 Every sound
banker knows how a sound State bank. issuing
only sound mercantile currency, should be organ
lied in its essential features, and If we cannot
safely give TO every State in the Union the power
TO incorporate such banks, than are ct loss to
see how the people can safely be permitted to
manage government bank OF issue IN wash
ton through their representatives sent to that city
The di ference, from our point of view, between
Government paper currency and such sound State
bank issues is that the former would. not be like
ly to be controlled by the laws of the production
and distribution of commodities, but by partisan
necessities and ascendency, while the volume Of
paper issued by well managed bank would be
defined and bounded by the laws OF trade, and not
by the methods of politicians.
But our chief difficulty in the way Of Govern
Dent paper is that to make & bank of the Treas
ury is neither necessary" nor appropriate" to
the exercise of any power specially conferred on
Congress, aud is therefore forbidden by the Con.
stItutlon.