Savannah morning news. [volume] (Savannah) 1868-1887, 1881-11-14
The Circulation Of the National
Rauka

United States Treasurer Gilfllan, in
his recent report, dwells at considerable
length upon a subject Of vital interest
throughout this country, and that is the
absolute control of the national banks
over their circulation. At present the
banks contend, and they have done so
successfully so far, that they are invested
with such absolute control of their cur
rency that they can expand or contract
it at pleasure, only being governed by
their own convenience, and without any
regard to the public welfare in the re-
quirements of business.
1t must be confessed that the banks
have good ground for asserting this as
one of their rights. for heretofore all the
Republican Secretaries of the Treasury
have conceded it to them, and interpret
ed the laws establishing the national
banking system as giving them authority
to act as they see fit regarding the ex-
pansion or contraction of their circula-
ton. Treasurer Gilfillan, however, it
seems, is greatly in favor of decided
reform in this matter. He regards this
authority as fraught with evil and
mischief to the country, and is of
the opinion that it is an au-
thority which should promptly be cur
tailed. He boldly asserts that ''the
power now possessed by the national
banks of throwing up their circulation
at will is wrong in principle. unneces-
sary and dangerous" and he takes the
manifestlY correct ground that under
sound system of currency the circulation
can be reduced only by the act of the
holders in presenting it for redemption.
Under the present system, the issuers
can suddenly and arbitrarily contract it
to any extent; and it msy be for their in
terest to do this when there is legiti
mate demand for all the currency in cir
culation, or even more" He then goes
further, and is equally correct IN declar-
ing that ga bank having issued circu-
lating notes should be held responsible
for them until they are redeemed or il
goes out of business. The privilege of
surrendering circulation by depositing
lawful money is not necessary to correct
redundancy in the circulation, since any
real redundancy will be naturally cor
rected by the return of the notes by the
holders"
These views of the United States
Treasurer must meet with the hearty ap-
prevail of the people at large in every
section, and they are already generally
endorsed by the press everywhere. ex-
cept, perhaps, in the East, where the
money power, ana consequently the
national banks, are well nigh omnipo-
tent. How the banks, by combining,
can threaten the welfare of the country
was conclusively demonstrated last win
ter when they defeated the three per
cent. funding bill of the last Congress
by Withdrawing their circulation, there
by threatening to throw the business of
the country into chaos. This action of
the banks is well remembered
and is forcibly characterized
by our st. Louis contemporary, the Re
publican, as plainly a conspiracy against
the public interests and against Congress
- deliberate and matured scheme to
place the country under the hardships of
a suddenly contracted currency for the
purpose of affrighting Congress and the
President from what they esteemed a
duty" eff the banks engage IN this
work." continues that paper. had
been justly dealt with, they would
have been wound up and their managers
forever debarred from the privileges of
the law they had so grossly abused.
But weak and foolish executive quailed
before their menaces and vetoed the bill
offensive to them-and the conspiracy
was successful"
The soundness OF the Suggestions thus
put forth in his report by Treasurer
Gilfillan cannot be questioned, for, as
was shown in the case above cited, while
such dangerous powers continue to be
We. ted in the national banks-those crea-
lures of Copgress-the country must
live under perpetual menace. As our
st. Louis contemporary well says in ef
feet, while discussing this subject, such
proceeding ought never to be allowed
again. The banks should be taught to
know their duties as well as their rights.
One of these duties is that of maintain
ing a circulation given them for the pub
lie good, till the public good shall indi-
cate the propriety of its contraction or
withdrawal The correction of this evil
should be among the first duties to
which Congress should address itself
during its approaching session.