National Republican., 1878-09-21
THE NATIONAL BANKS.

When the national banks were first ere
ated the controlling idea was prompted by
desire to crystalline the floating capital of
the country in the support Of the Govern
ment Much of that capital was absorbed
by the State banking organizations, and
would have remained permanently invested
therein if the banking laws had not been
changed. The capitalstsbr stockholders in
these State in Institutions were patriotic enough
to submit to this change without objection,
and the people were gratiiied at it because
they were instantly given o currency Of
equable value in every part of the country,
with which to replace the wildcat and con-
stantly fuctuating issue Of their local banks.
Hundreds Of thousands, and finally hur-
dreds of millions, of dollars were thus
placed at the disposal OF the Government
at time when money was needed by it
for use in maintaining its own existence.
The plan was to give the capitalists better
and safer opportunities for investment than
they had ever enjoyed before, and at the
same time TO give the people better and
safer currency than they had ever known.
1t succeeded beyond the hopes of its origin
ators. and to the national banks is due much
credit for having patriOtically furnished the
then-needcd thews and sinews Of war. OF
course, it is the popular thing to say that
these patriotic capitalists made money out
of their patriotic investments, and they did;
but they were all making money before
that in other channels, in the local banks
and in the thousand and one avenues of
commerce. When asked to take their
capital out of these channels and loan it to
the Government they did so, sometimes at a
tainty of steady and reliable percentage
of profit The change in the banking sys-
TEN of the country was arbitrary and COM
paratively sudden but it was justified by
the emergencies of the occasion, and was so
skillfully directed that no one suffered great
injustice.
Just now these banks are very useful as
an Intermediary between the Government
and the people in the matter of specie re-
sumption. Their notes are secured by gold
u
greenbacks, which will be redeemable in
gold in about three months, and the holder
ofnational bank uotes will then he able, with
only one intermediary change, to convert
them into gold. But this intermediary
change will serve at all times as check or
guard against a rush or corner" upon the
Treasury. Meanwhile the banks will con-
tinue to pay taxes, and, as we have said be-
fore in discussing this subject, they have
ceased to be the extraordinary profitable
institutions to their stockholders they We're
formerly In the shrinkage of values they
have suffered because their deposit and dis
count business has all along been conduct ed
with the business men Of the country,
whose commercial interests have depreci-
ated correspondingly with that shrinkAge.
They retain their deposits rs guarantees for
their circulation, and draw interest upon
them the same as other bondhOlders
do; but it is estimated that
ii they were to be closed up to-day, not
more than One-third of them could Instantly
realize the face Of their loans. 1t is there
fore apparent that any sudden demolition
of the national. banking system would be
disastrous to the country and the Govern
ment to the country, because Of the dim
cutics that would arise in the settlement OF
loan accounts, aud to the Government, be-
cause they would he withdrawn as an inter
mediary and useful protecting agencyin the
event Of specie resumption. But that they
must go in time and by the gradual process
of careful substitution Of legal-tender OF
regular Government currency in their stead
is ns true rs il is that they have served the
purpose for which they were called into ex-
istence and are consequently no longer use.
Iul to the people, The impulses Of the
hour and the education of the voters Of all
parties OH the subject of finances point to
this subject unerringly. The popularity
Of the greenback system now that it has
survived the war and the insidious assaults
OF Copperheadism, as well Us the open
cnmity of repudiationists is constantly in-
creasiug, and as it increases the people be-