Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1879-11-07
THE NATIONAL BANKING SYSTEM.

"a lHI- NAllbNAL BANKING SYSTEM
! In the progress toward specie payments
a Two financial questions have arisen upor
! which it may he proper for me to make q
few remarks, for both of them will enter
e largely into our political discussions One
is the proposed abolition of the National
{; banks, and the other is the free coinage OF
! silver dollars. | feel bound to say that the
system of National banks adopted by the
+ Republican party, has proved a most impor.
tant all and agency in the business of the
country, the advance Of its credit, and in the
r refunding of the public debt This admira-
bic system of banking, designed to supersede
State banks, has realized all the hopes of its
authors. Its notes are now redeemable daily
; at the Treasury i'll coin, or notes equal to
, coin. They are of universal circulation
! throughout the United States, secured be-
yond all peradventure against loss, or failure.
or counterfeiting, and the amount can be
varied TO meet the varying wantsO of business
The system is free as any other occupation or
employment in life.
1t has been quite the fashion of the Demo-
: cratic party to attack this system, because it
Is supposed that any moneyed institution is
subject TO popular Outcry. 1t has been pro-
posed by the Democratic party that this
, system shall be superseded by a new issue
of United States notes, in violation of the
law OF 1864, and the whole basis upon
which this measure is proposed is that it will
save the people of the United States the in
terest on the circulating notes so issued
Even on the narrow ground of interest, such
u measure would be an immediate loss, for
the taxes levied upon the banks by the State
and National authority are now greater by
several millions than the entire interest at
per cent on all the bank notes in circulation
The destruction Of the banks would be the
loss OF this tax. The United States bonds
deposited as security for the notes, are now
in effect taxable as capital stock of the bank.
but would not be taxable in the hands of pri-
vate parties and thus, by the destruction
OF the banks, nearly all the capital employed
IN them would assume a form, in the
hands of private parties, beyond the reach
OF taxation. In this city alone the taxes on
National banks amount to -, ,S32, 9s1. 40,
while per cent interest on their circulating
notes is 1898, 1449G. Abolish the banks and
the sos, i45, 500 of nited States bonds held
by them and forming the body of their capi-
tai stock now taxable will cease to be taxable
whether held by private persons or corpora
tions This deficit in your taxes would have
to be made up by taxes on other property.
But this argument of profit and loss is the
least of several objections to the abolition of
the National banks. They are interviewer
with all the commercial business of the coun-
-ry, and their loans and discounts from our
most active and useful capital. and the COL
lection of which would create the mos. wide
reaching distress. Again, the abolition of
the National banks would inevitably lead to
the incorporation of State banks, especially
In bankrupt States, where any expedient to
make paper money cheap will be quickly re-
| sorted to, and thus We will encounter again
all the innumerable difficulties of exchange
and business which existed before the war
| under the system of State banks Again, it
/ will open the question of the repeal of the
! provisions of the loan laws fixing limit to
the amount Of United States notes. and thus
will shock the public credit and raise new
| questions of authority which the Supreme
Court would probably declare to be uncon-
stituional
| Free banking open to all, with prompt and
easy redemption, supplies currency to meet
the varying wants of different periods and
seasons. Who would risk such question
to the changing votes Of Congress? | will
not disparage your intelligence by the dis
cussion of propositions gravely made during
this canvass, that seem to me to border on
lunacy. They We're all based upon tie claim
that. Congress had the power TO. and ought to,
issue paper money without regard to the
limits fixed by law, without regard to re-
dempti0n, and based entirely upon what
they call the wants of business. With
high opinion of the general intelligence of
Congress, do not believe they have such
power, nor ought it to be conferred upon
them. The present volume of United States
notes was issued during the war. and their
issue and reissue has been upheld by the Su-
preme Court We have had a weary strug-
gle to bring them to the standard OF coin
There let us rest. |, for one, am in favor of
maintaining them in circulation, supported by
an ample reserve in coin, but am equally in
favor of allowing all otherpaper money to be is
sued by corporations under a law free aud open
TO ALL So that the business of banking will he
like any other business Of private life. If
experience shows that the existing law is
subject to abuse then Congress can readily by
general law restrain them even to the extent
of a tax equal TO any portion of the interest
on the bonds held as security for their cir
culating notes. Bat the general principles
of the system of national banks cannot be
greatly improved. They fill the commercial
want of furnishing Il safe, uniform, conven-
lent currency, univallcd in excellence by
any banking system heretofore devised.
THE FREE COINAGE or SILVER.
Another subject of embarrassment pressed |
upon Congress during the preparation for re- |
sumption was the free coinage of silver | |
believe with Hamilton and Jefferson that the |
free coinage of both gold and silver is the |
true policy of the Government hut the essen
tial prerequisite of free coinage is that the |
coin ratio shall be as near as practicable |
equal 10 the market value of the two metals
at the time of coinage. This was the rule
adopted at the beginning of the Government,
when the coinage was fixed ineXact conform
ity with the market ratio: that is. that fif-
s..F. oil Il
of gold Subsequently, when the price of
silver had somewhat fallen, and when gold
had become practically dcmonatized the
ratio was changed to sixteen ounces of silver
10 one ounce OF gold. And now. ii the market
value OF .SiNteeh ounces of silver were equal to
one ounce of gold, there would be little if any,
objection To The free coinage of silver but
by series of events not necessary 10 state.
4l2t grains of standard silver are only equal
to SS cents i'll gold, and. therefore free coin
age of silver now would necessarily demon
etizc gold and thus rcdlcc Us To the single
silver STANDARD. To this | am utterly 0p-
posed. What then, does public policy clear
ly require: Either
First That upon the present ratio the
coinage shall be limited 10 an amount of sill
yer coin that can he maintained by its neces-
sary use at par with gold without respect to
its market value; or.
Second That, by an arrangement with
commercial nations ration hetween the
two metals may he fixed At which all ma
tions will receive and coin both gold and sill
yer; or,
Third-To put in til, silver dollar enough
silver to make it equal Ia the gold dollar
The gold dollar of 2j $ grains has been the
standard coin Of this country for 40 years,
and it would he an aci of insane folly to now
cha . Il, .
ism of an hour. France. though it has slls-
pended the coming of silver, is now greatly
embarrassed by having in the vaults of the
bank of France more than half its coin re-
serve in silver coin, and we should not fool
ishly involve ourselves in the same cmbar-
rassment. We should issue no dollar that is
not equal to the gold standard, or, if we do
it should he redeemed in the gold dollar
whenever demanded. The interest of labor
ing men, above all others, is to have fixed
standard Of value for the rich and the poor,
for the bondholder and the nntcholdcr; to
have no money in circulation except that
which is as good rs coin; To make no dis
tinction between moneys. but to maintain
all at the same purchasing power. We now.
under the law, are coming 2,OOO,O00 silver ,
dollars month. OF these. 81 a6J, 900 are ,
in circulation, and S32. 0j2 80 are in the ,
Treasury. Ii ismanifcSt that we have already !
reached the limit To which this coinage !
should he carried, The popular opinion is
50 enlightened on this subject that | trust the
danger that threatened us II year ago has
passed away with the triumphant success of a
Upon both the silver and banking questions =
the great effort of the Democratic party |
seems To hr tn find some financial fallacy upon q
which they can gain votes. cheat and mis- '
.t1 IL = IL,