The Iowa plain dealer. [volume] (New Oregon, Howard County, Iowa) 1867-1895, 1881-01-20
THE THREAT OF THE NATIONAL
BANKS.
fFrom Chsse's Enquirer.l

THE THREAT OF THE NATIONAL
BANKS.
fFrom Chase's Enqnirerl
The New York Tribune ID alarmed
lest the banks, rather than base their
circulation on 8-per.cent. bonds, will re-
tire from business and contract the cur
rcncy.
Fisk 4 Hatch, New York bankers,
rcckoned there would be fair profit in
banking on 4-per-cent. bonds at 119.
Whether the banks make large or small
profits is Of little moment compared
with the danger the Tribune points out.
The following from tho Tribune shows
how completely the destinics Of the peo-
pie are In the hands Of the national
bankers:
The paper currency now consi .ts OF legal
tender not, =, OF which no moro can be issued
without bad faith, OF national-bank notes and
silver certificates. The volume Of bank circnla-
ton can be expanded only BY the deposit Of ad-
dltional bonds. and will oe contracted when
the proceeds directly than TO retain the circnla
ton tascd on Til. deposit bonis. Nearly e200,-
OOO. 600 or 8 and 6-pcr-ccnt bonds of the classes
which become redccmablc next year, are now
on security for bank circulation. II new bonds
can be sold, those on deposit will be
:. From and after the 1st day OF July, 1881, tho
3-pcr-ccntum bonds authorized by tho first Sec
tion OF th act shall be the only bonds hereaf.
ter receivable ~ security Tor national bank cir.
culation.'"
If the above is put into the Refunding
bill. the Tribune fears there will bo
sudden contraction Of $500, ,0O0, 900 Of
national-bank notes, and advises that
the banks be eased on their taxes
50 they will consent to continue their
circulation.
The Tribune further says that il is
the belief OF nearly oil competent tinan.
cicrs that the banks would not retain
their circulation based on 3-per.ccnt.
Londs.
Ii not. the effect might lie sudden and vio-
lent contraction, possibly oven TO tho ext nj OF
the whole anloant now covered BY tho s2O9,-
co., 900 about TO become redGcnaLlc.
In tho above, the idea that money in.
creaaos or diminishes in value IS its vol
nmc increas = or diminishes is recog-
nized. Ii the banks should suddenly
retire from circulation sos, ,OOO, 600 ot
their substitutes tor money, Of which
tho Tribune thinks there is danger, the
effect would be TO increase the value of
the gold dollar. that "ncver 1uctuates, =
p.rhaps 50 per cent.
The Tribune says the Government
has tied its own hands and cant issue
my more legal-tendcr notes, but the
banks have i..e power and.will contract
tile circulation sos. .OOO, 900 If the Fund
ing bill should pass in its present Snaps.
Suppose the bas-xs should do what they
have in their power and what the Tribune
threatens they will do-retire S9O9, ,UO,-
600 Of their circulation this winter, what
would be the effect? Farmers who have
fifty tons of hay in their barns, and stock
to eat it, would find when they turned
the cattle out to grass next spring 4
2-year-old would not bring as many gold
dollars as ycarling will now. The farm.
era cattle would cat and thrive all win
ter. but shrink as fast as they grew; but
Government bond would buy as many
2-year-olls in the spring as yearlings
now. In the spring the farmer would
find "them steers" contracted from g
year-olds to yearlings, aud the public
creditor would find .'them bonds" in
flated from yearlings to 2-year-olds.
Nothing would strengthen the public
credit Ike having the hanks do what the
Tribune threatens they nre going to do
retire sos, ,OO0, 900 Of their own notes,
but il would mako the man richer who
wintered bonds, and make the man
poorer who wintered cattle and hogs.
II the hanks should contract the cur
rency $2O9, ,OOO, 900, and legal tenders be
put in circulation rs fast as the national-
bank notes were retired, there would be
no robber under tho hay-mow. no in
crease in the value Of the gold dollar,
and no disturbance OF values. The
farmer would get the growth Of his cat
tie, and not tho man who held the mort
gage on his farm.
According to the Tribune. If the new
Funding bill in not shaped to suit the m,
tional banks they will retire sos. .OOO. .OO0
Of their circulation ut one swoop. Dc
not the industries Of the country rest on
volcano? Is not this power Of con-
traction vested in the national banks q
dangerous power? II the present
Funding bill is made TO suit viii
not contraction be, ut somo time
tor their interest? II they should
retire one-half Of their circulation aud
surrender one. half of their bonds tht
other half would be doubled in value. /
the banks ha6 not the power to contrac
their own notes. their power to do mis-
chief would be curtailed. Arbitrar,
contraction Of the volume Of money !.
worse than highway robbery, becaus.
the robber is protected by the law. ane
the victim cannot defend himself NJ hs
can against the highwayman. Ths
threat Of the national banks, through
their chief organ, the Tribune, TO TAXI
S2O9, ,OOO, 600 from the volume Of none,
ought 10 set tho people thinking
Should not tho people bc protected il tn
banks carry out their threatr Would !
not he in the peoples interest to pro
vide some why 50 that II they did carr,
out their threat the people would hc un
harmeds
The Rank Burden Greater Than tn
Public Debt.
Much complaint Is Justly made of tn