Oxford Democrat. [volume] (Paris, Me.) 1833-1933, 1878-05-21
From the Portland Press
The National Banks.


Greenbackers about the currency of the
National Banks is a very unnecessary
noise. There is no great body of men
who insist upon the perpetuation OF the
system beyond the time stipulated In the
contract between the banks and the ma
ton. Indeed it is very doubtful If the
banks themselves would desire to retain
their circulation, Of so little value is 1t
despite the constant reiteration Of the
misstatement that it is giant monopoly
eating the substance Of the people. The
large taxes aud many restrictions put
upon the banks by the government make
the circulation Of but little profit to them.
The Casco Bank Of this city and many
Others in the country have voluntarily
surrendered their circulation because it
did not pay to retain 1t. So that the
complaint that they made undue profit
from this source is very empty indeed.
In the stress Of war necessity aud for
the purpose of rapidly dispOsing of a
large quantity of bonds, the government;
offered the banks an inducement to take
the bonds, by heavy taxation of their cir
culation as State institutions and by offer
ine them a circulation under national
authority Il told them that if they
would deposit in Washington U. S bonds
as collateral security, it, the government
would endorse their notes for circulation.
Ii made a contract with them that the
arrangement should continue twenty years.
Under this plan the most Of the banks
took national charters In 1868. Their
time will expire in 1883 and TIE plan
will then be much modified if not entirely
abandoned. Honesty and good faith re-
auire that there should be no infringement
Of the contract until its expiration, except
by the consent Of the banks As We have
said, many of them are voluntarily sur
rendering their circulation because 1t Is
not profitable. They did the nation great
service il the time Of Its trouble and 1t Is
certainly very ungracious thing to at
tempt to heap odium upon them now by
misrepresentation of their condition and
purposes.
The Greenbackers, so far at least as
they find expression in congressional
speeches and bills, desire return to the
old system Of State banking, and it may
not be amiss to compare the old system
with the present. Under our State laws
prior to 1868, banks were permitted to
issue notes TO an amount double their
capital stock. Thus bank having $780,
coo of capital could issue 100000 Of
uotes These /; could loan, and it could
also loan the money paid in for Its capital
stock with the exception Of a small re-
serve of coin to redeem its notes Thus
it could draw interest on nearly 100000
to say nothing of its deposits. Now the
same bank has on deposit in Washington
100000 Of government bonds on which
1t draws or an average FIVE per cent II
has 100000 Of circulation guaranteed by
government which it can loan, excepting
a small reserve Of greenbacks to redeem
It's notes. Thus it can loan nearly $780,
600 against about 100000 under the
old system. Formerly the bill holders had
10 security for the value Of their property
except the soIvency Of the banks. When
ever one ofthese failed loss fell upon every
one holding its notes. They were not
good Us currency except in their imme-
date vicinity. and great Inconvenience
was suffered by those who wished to travel
through the country or TO remit money
to distant parts. The present system Is
largely preferable to any which preceded
1t, but 10 one will main ain that absolute
perfection mas yet been attained, and
there will be no serious objection to re-
modelling the system when the time shall
come around So that the Greenbackers
are laundering against an opposition
which doesn't exist. They fairly parallel
Don Quixote's celebrated charge with
lance in rest against the windmill. The
banking system will be modified without
quarre, or fuss; only everybody with an
ounce OF brains will deprecate a return to
the vicious old State bank system