Lancaster daily intelligencer. [volume] (Lancaster, Pa.) 1864-1928, 1881-03-01
Aanraster ftltel!.gearer.
TUESDAY EVENING, MARCH l. 1881.
Power Poorly Placed.

Auc power nclO Uy tue udtlOudi UduhS i
to suddenly and disastrously contract the
medium of the country, as
lately exhibited, seems to demonstrate |
that the expedient of resorting to a ma
tional bank note circulation, instead of
government note, is of much less value
than it was supposed to be. Evidently
the cheapest and most reliable paper
money country can use is the promise
to pay on demand, made by the govern
ment itself, supported by the needful
coin in the treasury to redeem that de-
mand. Substantially the national bank
note is a government note, since it is
based upon a government bond that pro-
tects it. If the government bond Is
good the national bank note is good
otherwise it is not.
Why then does the nation resort to a
second hand issue Of note, through
o bank, and pay that bank for issuing
the note, when it might itself issue one
Just as good for the purpose and save in
terest on SO much of the national debt as
the currency would supplant? We have
ourselves never been able to clearly see
the force of the reasoning which has led
Congress to create national bank cur
rency, instead of authorizing direct
issue of non-interest- bearing LOtes,
payable on demand, in amount suffi-
cient Tor the country's currency require
ments. We understand the idea to be
that there would be danger to the bust
ness interests of the country in having
the control of its currency lodged direct
ly in the hands of the officers
of the governments and in Con-
gress that it might be suddenly and
unduly contracted or expanded, because
the power over it rested in one place.
The diffusion of this power, by placing it
in measure with the many banking
institutions, has been looked upon as a
safeguard, for which the country could
Well afford to pay the profit given to the
banks fer doing tie business. If this has
been the idea, it has been shown to be
fallacious by our present experience,
the selfish impulses of the banks having
prompted them to suddenly withdraw
circulation FROM the market, thus max.
ing money IN its centre TO he SO scarce
as to cause great Inconvenience and loss.
If our currency was well regulated
there would always he 4 sufiiciency of it
for business wants. No such sudden
withdrawal of it should he possible as
would make the cost of hiring what is {:
mere medium of exchange much greater
than the average value of the use ol
capital. The supply of a circulating
medium is q government function
Coin is the currency furnished be
cause of its intrinsic value. Paper
money is the currency desired because o
its convenience. 1t should he made a!
valuable as coin by the capacity to ex-
change coin for it. As the government
supplies the coin we know no adequate
reason why it should not supply th'
paper money. There is, of course, dan
ger that it will not be wisely and honestl!
supplied. But that danger is inheren
in the case. It attaches to every gov
ernmental function. And when th'
people can have the positive advantage
of saving the interest upon the amoun
Of currency that is needed, over ant
above the requisite coin reserve 1tt. .u.ret
for its redemption, we believe the.
should receive it. But whether this be 81
or no, it seems evident that the larg
sum they pay the national banks to sup
ply the country with currency is none!
worse than thrown away. The trust
not wisely or patriotically discharged
and the sooner it is taken away from tin
stupid and selfish national bank mana,
gers who have so clearly shown their un
fitness for it, the better it will be for TIN
nation.