The Carbon advocate. [volume] (Lehighton, Pa.) 1872-1924, 1878-10-05

up because OF the unproiitableness of Nation
al banking. National banks do not get dol
lar for dollar of circulation for bonds depos-
ited-only ninety per cent. of circulation is
allowed for one hundred of bonds-and this
difference is also in the direction of security
for the note-holder in the event Of bonds be-
coming of less value than par, that there
should be at least margin of ten per cent.
to indemnify the note holder. In addition
to this, banks are required to add ten per
cent. Of their net earnings to a surplus fund
until the surplus is equal to twenty per cent,
of the capital and to keep twenty per cent.
of deposits as a reserve. The National bank
ing system is the best that has ever been de-
vsed as fiscal and financial agent of cir
culation and exchange in this country. 1t
is full of felasticity-saie and uniform as well
as free from the charge of being monopo-
ly, and is one which costs the people less
has more guards against fraud and counter
teiting than any other.
The population in 1870 was 3S,55S,371, =,
and
State Bank circulation..."..S 2,222,793 90
National Bank circulation. 299, ,766,9S4 90
Demand Notes............,...... lO6,256 90
Legal Tender Notes. $4,000 900 90
! and year Notes of 1863. 24S,272 90
Compound Interest Notes.. 2,l52,9lO 90
Fractional Currency"......... 39,S7S,6S4 4S
The entire circulation was 800, O,375, ,S99.4S
equal to eighteen dollars per capita of cir
lation. The one dollar greenback, according
to the gold standard, was worth $50.
1t is charged that there is not enough
money in circulation to do the legitimate
business Of the country with. Whether this
be true or not depends upon circumstances.
The volume of paper money in the decade
tp yx-li | in 81
two hundred per cent, while the increase of
population was less than twenty per cent. 1t
is hardly wise to claim that there was fair
ratio between the issue Of paper money and
population. Real money represents wealth
and must be created by labor and the devel-
opment of natural resources. The merely
printing and stamping piece of paper with
figures and devices and calling it money,
whether by nations or individuals does not
make it money unless it has that back of it
which can be converted into wealth or mon
ey, according to some known and acknowl-
| edged standard of value among civilized ma
| tions. A man may issne his promissory
notes for one dollar and upwards, and as
| long as persons to whom they are offered be-
lieve that there is back of the promise wealth
value out of which the note can be paid,
| it can be negotiated and passed, and that
| idea back Of the written or printed promise
| gives it value, and not the piece of paper.
Now what is true of an individual is equal
| ly true of a nation.
| Nations like individuals, become bank
rupt, and without credit-as Mexico, Spain,
| Turkey, etc. not because they are not able
| to print paper promises representing money,
but because they cannot make nations and
| individuals believe and trust IN their print
| a1 tpk pf n,,tf 20. =
sue of such paper promises bearing some
fair proportion to the income of the govern
ment issuing them and havinga redemptive
| power to back them, then paper promises
would pass as current money, Just as our
| greenbacks and National bank notes would,
| if let alone.
1t is asserted, however, that more paper
money is needed than we have at present in
circulation. The National banking system
provides an easy and safe way to increase
the volume of paper money according to the
| business necessities of community or of
the country, but on the very face of the pre-
tended demand, National banks are with
drawing their circulation, because banking
does not pay. Now if there is so much de-
mand for money, and National banking is
as profitable as is claimed, why do individ-
uals and communities not avail themselves
of these advantages to get more money into
circulation and make the profits which they
allege the National banking system provides!
The National bank notes are safe because
they are based upon the maturing interest
bearing obligations of the nation as well as
the individual liability of the stockholders
and therefore in a double sense represent
wealth, and have back of them the redemp-
tive feature, viz: that banks must redeem
their notes in greenbacks or gold and silver
AS real money represents wealth, banking
capital will increase with it if there is suili-
cient certainty and stability in the laws to
protect it fairly without unjust discrimina-
tion. Is it not a clear proposition, therefore
that the creation of wealth does not consist
in the printing of pieces of paper with
promises of money--but rather in the build
ing up and developing of the resources of a
country, and then when a nation can re-
deem its paper promises with gold or in
a known and acknowledged standard oi
value, its paper promises will pass for mon
ey, because then they are convertible and
interchangeable.
Outside'of the present banking system,
know of but two other ways of creating pa
per money-one is a return to State bank
ing, and If conducted under no better guards
than the old system was, the note holders
and in many cases that would amount tc
nothing, and there would necessarily be a
constant huctuation in the valne of the State
bank notes-many would break up and note
holders would lose and be cheated out OF
their values. The other is to issue green
backs. have already intimatcd that the
merely issuing them will not make them
money-but it cannot be successfully assail-
ed that the more greenbacks you get into
circulation the less value there will be "a
them. Suppose you paid off the govern
ment bOnds-S2, ,OO0, 900 ,000-with them, dc
you suppose for moment that 500 green
back would be worth SlO0 in any known
and acknowledged standard Of value? Il
not, then the greenback would be measured
by its purchasing power in the markets o.
the world.
do not object to the greenbacb as now
issued, and believe that the present volume
it is desirable to maintain in circulation
and for the good il has accomplished an
profoundly grateful, and the Republican;
should have the credit for providing it.
The government could not emit green,
backs 10 pay the bonded Indebtedness with.
ont further legislation and population
Would such an act be beneficial 10 the work
/ ING man-would il give him emDlOytnenI