The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1878-06-14


| Ii we judge from the utterances OF eminent
men and institutions there TO say that the
| heavy heel OF tyranny will never be lifted
from Its neck till the prayer for State banks
State pride, State and personal honor are
quoted; Senator Buffers amendment, the
| speeches OF Congressman Vance aud others.
| the speech Of John w. Daniels, of Lynchburp
| the action OF the Boards of Trade at Memphis,
| Nashville and q number of other Southern
cities, all indicate the unanimity of the South
ern people on the question Of abOlshing the
tax on bank circulation They have congen-
tfated on the amendment Of Senator Butler
OF South Carolina, TO the Senate bill to amend
the resumption act, which is, In full, as fol-
lows:
"An amendment intended to be proposed by
Mr.. Butler TO the amendment reported by the
Committee on Finance to the bill House bill
No. 805) to repeal all that part Of the act ap-
proved January IA, 1876, known as the re-
sumption act, which authorized the Secretary
OF the Treasury TO dispose of United States
bonds and redeem and cancel the greenbaek
currency, viz: After section insert the fol-
lowing:
"' That section 94t2 Of the Revised Statutes
OF the United States, the same being section
l22 OF the national bank act, and imposing q
tax OF 10 per centum upon the amount of notes
OF any person or OF any State bank or State
banking association, used for circulation and
paid out by them, be and the same Is hereby
repealed
II ever an unlimited issue of greenbacks il
authorized as 1t would be II the votes of the
entire South and part of the West could pre-
vail the national banks would demand d
State system whereby they would have not
only the same advantage as they now have
under the national bank SYSTEM namely, the
privilege OF deposlting United States or State
bonds as security for circulation and deuositE
but also that OF holding United States OF
State bonds as reserve fund for circulation.
The profit on circulation would thereby be
augmented by the amount of interest drawn
on the reserve funds In their vaults, while
under present bank law bank cannot use an
Interest bearing. reserve, the 3 per cent GER
tificates having been redeemed, and no other
interest bearing obligation OF the government
being available In the reserve fund.
IN. Y. Tlmes1
The almost unnotlced appearance In Wash
fngton OF 2 proposition to repeal the 10 per
cent prohibitory tax on the notes of State
banks suggests the question whether the pres
ent is not an opportune time to take that step
Waving the question of constitutional power
1t Is at least very doubtful whether IL ia not
an a.. Improperly to exercise, for o purpose dis
tinct from, and prohibtory Of, revenue, the
taxing power which Is conferred upon govern
ments by the people for raising revenue If
Congress has constitutional and moral right
TO suppress issues OF one or another class of
banks a question we do not at present dis
euss-it would be less Objectionable TO effect
that object by positive prohibition than by
indirectiOn through clause In revenue bill
The more practical question, however con
Germs not the method of suppresslng State
bank issues, but the expediency OF CONTINUING
that suppression.
TO remove the tax now would not neeessa-
rily restore the State bank circulation OF the
past In this State the general banking law
remains, the essential features Of which are
that the State controller prepares and fur
nfshes In blank circulating notes to all tnsti
buttons and persons that have deposited pub
lie stocks with him as security and that, on
failure Of the issuer to redeem I'm coin on de-
mand, the notes are redeemed by him out Of
the guarantee fund. 1t Is unnecessary to say
that this system worked we'll for it Is the
perfection OF Legislative provisions for pro-
Y1dlng O secure paper currency short of q
regulative act like the English bank act OF
1874 the national system Is modelled upon it,
the only material changes from 1t in the ma
tional act as regards the circulating notes be-
ing that those are issued to the extent Of only
30 instead OF 100 per cent of the securities de-
posted, and that they are Of one uniform de-
sign all over the country
The system of this State, which was simply
natlOnalized into the present one. must be-
come general Between 1850 and 1868 at least
q dozen States adopted the New York system
In substance, and these facts, taken together,
answer the objection as to the difficulty OF
uniting the States upon q common basis.
Furthermore-since, If Congress can lay the
10 per cent tax of ali, 1t can lay 1t condition
ally-the tax might be removed as to banks
located In States which adopted the New
York SYSTEM the uniformity OF design which
Is so marked and popular feature in the
present notes might be retained in the new
and III that Is deemed of consequences in adj
dition to requiring the deposited State bonds
to be OF proper standing In the central finan-
cial markets, definite proportion in govern
ment bonds might be required. AS to con-
veftibility, there would necessarily be q vast
gain over what formally existed, and there is
no reason for supposing that the existing
notes after 1873 will be better in this respect
than the proposed ones would be.
But what are the reasons for such step
They are, first, that the question, What shall
be the paper money of this country is yet
unsettled and must be brought up at no very
distant day by the retirement of the securi-
ties on which the present issues rest, il by no
other causes; approximately speaking, there
are S940,000,000 of old bonds-One issue re-
deemable at pleasure, In about three years,
and the rest definitely due in from two and
half to ten years. Besides these there are
nearly 100000 Of funding bonds, redeem
able at pleasure, in three to thirty years. The
time will therefore come when the national
system will necessarily be abandoned, altered,
or reduced In size by the removal of its
foundation. The second reason is that this
step would be In the direction of withdraw
ing the Federal government from all share
In financial questions, except coming the
metals. The third reason-which is worth
especial consideration just now-is that, mas
much as what Is proposed Is not any inter
ference with the national currency" but
only the loosening Of check upon the State
banks, the inflationists might look with
favor upon such possible addition to the
currency, Notwithstanding their hatred of
banks and their fury for greenbacks; If SO, it
might be less difficult to overcome their re-
slstance to the proper treatment of the latter
turn of specie, and may be made one toward
solving rightly the money question, the
more money" people can be p1acated or be
somewhat checked In their hindrance OF
everything that ought to be accomplished
in finance at present. great good can be
wrought.