New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1882-05-15
DEUOCRATs AND THE BANKS.


buster indefinitely against that measure They
wopld have saved something in reputation II
tbev had not wasted day in that sort of re-
sistance Mr.. Grape opened the debate WIN
an able and convincing argument, but Mr..
Bland soon found opportunity to snow that
he had not learned anything for some years,
and many of the Democrats seemed disposed
to follow him III uncOmpromlslng hostility 10
the measure and the National banking system
much more hurtful form of opposition,
however. was opened by Mr. Flower who is
reported as having "made vigorous speech
" in favor of the bill with some amendments,
without which he thought he could not vote
for the measure. These amendments would
deDrive the banks of freedom to adjust their
circulation to the needs of business, and make
Them liable to be sued in State courts.
Whether Mr. Flower intends by this course
to set ND for himself and his Democratic
associates some excuse for trying to defeat
the bill, while processing to favor the bank
ing system, his own actions must SHOW
Bnt it is difficult to believe that an III
teligent constituency in any part OF the
country will approve the position that meas
| ure so necessary as this to the public welfare
shall be defeated, unless the majority of the
| House will consent to general legislation rad
| icaly changing the character of the banking
| system.
Mr.. Flower seems to overlook the fact that,
| even as matters now. stand the franchises en-
| loved by the banks are scarcely sufficient to in
duce them to retain their circulation Take away
| some part of their present freedom, and place
| them at the mercy of State courts in sections
| where the political forces are intensely hostile
to the National system, and it is certain that
| q GREAT many banks would surrender circula-
| ton which now prefer to retain it. AS prac-
| teal business man, Mr.. Flower cannot be
ignorant that the changes contemplated would
have a powerful effect upon the preference OF
many banks. Freedom to surrender circula-
ton. without ninety days notice. whenever
circulation cannot be proftably employed, is
an important and valuable franchise to the
| hanks. Prohibition Of surrender without long
notice is virtually withdrawal Of the power
, to adapt circulation to the needs of business.
because bankers can rarely foresee for ninety
DAYS whether currency will be in active de-
mand or not 1t has been great merit of the
banking system that it has given to part of
the currency a certain elasticity-a tendency
to adapt itself automatically to the needs of
| business. i lie amount Vi ItSu-ttLUtio 10 uAtu
and rigid. The available supply of gold and
silver and certificates representing them de-
pends, not upon domestic needs, but upon the
| the state of trade between this and other cOun-
tries. But no foreign demand can deprive the
| country of its bank circulation, nor can any
| under in judgment by Congress fix the
amount of that circulation too high or too low.
Each banker. seeing what the business of bis
own locality really requires, will seek to
supply that need. The aggregate result if the
banks remain free to adjust their circulation
to local needs, must be wiser and more ac-
curate adaptation of the circulation to the real
needs of the country than any Congress has
wit enough to make.
Mr.. Flower of course understands that this
amendment would make an important and
radical change in the banking system.
Very many people, who agree with
his expressed opinions in the main,
think that this change would be
most pernicious. Unless they will surrender
that conviction, can Mr.. Flower say that the
country ought to be exposed to great peril by
9 a defeat of the pending measure7 Opponents
of the amendment, moreover, realize that 1t
will probably turn the nicely balanced scale
with many banks. If deprived of power to
adapt their circulation to the actual demand
for circulation, they will prefer to surrender
the note-issuing business altogether, since it
is scarcely profitable to them i'll any case.
| Whatever the object of the amendment, its
effect would be to contract the bank crcula-
ton materially, and this also Mr.. Flower, as
a practical business man, must know.
The other amendment proposed is much
more dangerous. In nearly all the Southern
and some of the Western States, the hatred of
the National banking system is so intense and
prevalent that local courts, unavOidably
swayed by local opinion and by the clamOr of
political demagOgues will be exceedingly I'M
likely to deal fairly with these institutions.
In fact, in such regions, National banks would
be subjected to incessant and intolcrable per-
secution, if placed at the mercy of State
courts, and they would at once avoid it by
surrendering circulation and going out of the
National system. But this, again, would involve
a large contraction of the circulation,
and. unfortunately, that contraction would he
greatest and most hasty IN those very States
which, because of Democratic or anti-loyal
preiudices, have until now remained i'll great
est need of a larger circulation. Even at the
| East subsection to the Incomprehensible vaga-
ries of State court would turn the scale in
favor of a surrender of circulation with many
banks. No institution can be blamed for want
ing TO be out of the reach of such power as
Judge Westbrook would WELD.
Last week the withdrawal Of bonds held
for circulation exceeded the deposits by
$1,O1G,3OO. This is q large change for a