New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1879-05-16
KX-SECRET4RY WCULLOCH on NATONAL
BANKS.
THE CHRONIC CHARGES AGAINST THEM CLEARLY


THE CHRONIC CHARGES AGAINST THEM CLEARLY
REFUTFD.
E,op Mr. leCIloeb's Fourth Lecture at HdrCGrd Urers
In my Judgment the National banking
system is one OF The chief cOmpensatOns Of the war
1t mas given a bank note circulation OF uniform value
fitted for a Nation like than the notes OF state
banks under the old system. only small proportion OF
Them we're secured, and none of them had circulation
outside of rae state which the bank when issued
them was situated. The loss which people sustained 10y
system was a system under which bank note brokers
hsconr Trh and the pcople suffered It is to such
system that the country would return II the National
banking system were Oyer-hrOwD, for the people viii
~ naner currency of some kind and il is likely
tbat 4; will he considerable extent furnlsncd ny
the Government The contest now Is between Govern
ment and National bank notes.
Letus consider the popular objections to the National
bank nocl and the real and substantial objections 10
substituting Government notes. The first objection 20
the National banks is that they costly, the second
that they monopoly, the thlrd tnat ty constitute
n great money power and the fourth they cannot
furnish currency enough for the requirements OF trade
In what sense, then, the NATIONAL banks costYf
hank can issue notes Oaly TO the amount OF 80 per
cent of the United states bonds which IL owns and de-
posts with The United states Treasurer IL Is costly 10
ibe h,uks but not Ia the Government This provision
is what the Government and the interests Of the people
require of the banks security FOR their notes Ibcfe
is not nauk in the United states, which, looking at ITS
Interest alone would not be right glad b. freed from
this requirement The bonds which they nave and on
which bey are paid interest would be expense 10 the
ncoplc wet her they basIs OF circulation or not
Who heard OF any complaint OF the Tree Dankln&
ecty seeurel Nor National banks the creation Of
the old State banks for the latter were driven out OF
existence bv ne National bank act which put tax Of
1er cent on the circulation of state banks The Ma
ona banking the first practical assertion Of
the authority OF the Government to regulate ana con
rO the currency OF the Nation, the first performance OF
the duty of the Government TO the people To make banks
secure their notes The National banking system Is III
no costly TO the people Inc people pay nothing
FOR its support and pays largely to the pnbhe treas
uTy by taxes, which are unwise as they are UNJUST anu
il continued. viii force many OF the banks 10 give up
the business The taxes which they have 70 pay ana he
interest on the coin reserye "heh 'he rogetuulel'
would have to keep but for the banks. would lar eA-
bonds deposited by them in the United states treasury
The National banking system, while 1t furnishes the
safest paper currency IN the world Is not profitable
business 1t is true that in the beginning, ~ al
others, they did make money on paper Dut the profits
dends which o. them declare are making III
roads upon their capital at least upon their sur
plus. which prudence requires them not only 70 man,
tain but increase Tie way IN W hich the enemies OF
system claim that money can be saved by the re
the banks in United states notes The experiment II
tried will d. costly than amy ever tried IN this or
costly Is utterly without foundation Equally unounded
i il that II n monopoly 50 lar from ~ IL Is emlnehlly
free and democratic In character. II empowers any
five persons who can command S00,0OO To become
bankers. IL requires only that those VINO shal hhuer
that those who issue obligations To pay shan have
m"nev vim which 70 redeem tnem Ii Is IN fact great
free banking system eminenty popular IN its character
open 20 all cnzens OF the United states with all oJec-
tons to a Government Bank carefully eliminated IL Is
the extension OF the free banking system OF New York
which a triumph OF the popular over what may DC
called Tie mOnopOllsc system. Nor is IT monopoly.
What night has money bank which il does not pos
sess outside Money power always and everywhere
In has been aud it always Will continue to be such, and
no legislation prevent It. But ITS political power,
50 far being increased In fact lessened when u
Is invested In bank stocks The banks have capital OF
some $40, ZOO and they have the use OF some
$500 900 900 OF capital which Is deposited with Them
Their capital is made up OF the investment OF savings,
and their deposits money for which the owners nave
no immediate use Bankers are not politicians They
do control large amount OF money but Is only Tor
business urpOses II any one Is known TO be III pol-
ties The bank with which he is connected is regarded
with suspicion and suffers III proportion Bankers are
generally OF ability, but they are not POLITICIANS
OBJECTIONS TO UNITED STATES NOTES.
The substitution of United States notes with The quail
ity money, for bank notes. IL Objectionable on const
tutona grounds. The change in the opinion OF prom,
iucnt men on this point Is marked Many VINO denied
me asure are now of peace in favor of increased,
unlimited issue The Constitution is the supreme
power No law is constitutional which is not In har-
inOny with it, and while liberal construction may be
by ls letter spirit subyerts the basis
government The Constitution gives Congress the right
TO coin money TO fix the value OF money OF other eOu
rics and establish minis FOR the purpose OF coinage.
Authority To issue notes rs lawful mOuey is not given
needed for the execution of It's purposes. IT. by the a
hOrity given TO Congress TO coin money ana regulate
egatender notes can be made, can conceive OF no act
OF tyranny which 1t might not pass under the same at
hOrty. am not unmndtul OF the fact inst the United
Supreme Court has decided that United states
notes legal tender Tie decision was by divided
make necessity superior to the Constitutions that Con
grcss under the pressure OF great emergency, may
alone - c1mpetenG 10 decide when such eiDeIgtnces
and there Is intination III that decision that
this power be lawfully exercised In times Of peace
Iue notes have intrinsic value, and they not
ealdrd and treated money outside OF the United
| states. Their value depends upon their convert
bihty into coin. Their ega,-tender qualify Is not
| only contrary to tue Constitution, DuJ IL a
violation OF the cOm!Gerula laws OF nations
Tuen they issued there Is way OF fixing limit
for one Congress cannot make laws 10 bind succeeding
Congress- How could business he conducted n such
power we're intrgsted 10 Congress Would the Demo
party be Wiling to intrust such power 10 RepuO
leans would the Republican party willing 10 In
trust such power TO Democrats would the business
aborng classes be willing 10 nIrust II to either No
Government in the world Is just enough wise enough
| to intrusted with the power To make money simply
by using the printing press Objections 10 the continued
| ISSUE OF slGa notes are lusupeTaDle.
IL said that our able financial Secretary believes
that it would De judcloIs IL keep $500 900 900 OF United
States EOes IN circulation ali the time. IL is also said
that made the statement that II the question
| were whether the United States the banks should
issus the notes exclusively he would be for the Govern
ment. In this decision he would 90 against the expert
enee Of other nations and would not have the support
OF the business of the country The specie stand
will be permanently restored the financial ques
ton will not be removed from politics. VIII business
revive until United States notes deprived Of the
legaltender quality by act Of Congress By the opI
ion OF the Supreme Court In differing with Mr.. Sner
man, whose ability have great respect and TO whom
the country greatly indebted, might doubt the
| rectness OF my opinion 10 not borne OUT By
Mr.. S8erInan's utteraDces from time to time al
Senator during the whole history Of the question In Con
grrss. IL tho Minister differs with tho mus
stand with the Senator, and 30 hope and believe vii
| inc country.