Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1882-05-18
NEW PLAN F0R PERPETUATING THE
NATIONAL RANKS.

A very significant article appears IN
New York financial journal, the Public,
which il known to be an able organ OF
the banking interests, cOnfessing that
the national banking system, whether
favored by legislation extending the
charters or not, is in the crisis Of its ex-
iStence.
This declaration is based upon the pal
pable fact, heretofore referred TO in these
columns, that the very basis upon which
the system is based is every day slipping
from under it. In other words, the ma
tionaI debt is being rapidly paid, and the
failure to refund the large amount Of
IorSs --0yr IeyTvvInOose in rOus UoIItl5
brings the country face to face with the
early end Of the national banking sys-
tenn.
Sixty-four per cent Of the National
bank circulation is based on the eOntin-
ued debt of the United States bearing 81
percent interest, and the apparent fact
that this viii be paid in about three
years is leading the banks to seek some
means or plan of averting the impend-
ing end of the National banking system.
The Pst5(le thinks that the winding up
of nearly two-thirdS Of the National
banks, which must follow the retiring
of this portion Of the National debt
would virtually end the system. The
conclusion is reached that ''unless sub
stitute can be found for United States
bonds as basis for circulation the Ma
tiona banking system must soon cease
to exist
The Public then undertakes TO out
line plan for prOlOnging the system.
Its plan is for the government to A.
sumo, under conditions, the local i'll
debtedness of States and corporations.
1t goes largely into the argument Of the
question as to whether national char
acter and sanction cannot be given to
securities representing State and local
Indebtedness, and concludes as follows:
lit is possible. The United States has
power to remove half the burden OF local
indebtedness without adding one dollar TO
the burdens of taxpayers OF the Union. Ii
can issue bonds so far superior in value to
any that States or municipalities can issue
that creditors will be glad to take them in
exchange on easy terms. 10 can afford TO
do this wherever the indebted State, county,
city or other locality will levy a sufficient
tax 20 meet the reduced interest and ulti-
mately to pay the principal, and will sur
render to the United States power TO col
lect this sum If local authorities fail TO col
leCt il. Having entered into such an
arrangement an indebted community will
pay the stipulated sum TO the United
States in preference to any other claim,
because that sum can be Immediately col
lected by summary process. Nobody would
be disposed 10 trust q community that
would not or could not get the assent Of the
United States TO an increase OF its debt
upon the same terms, and thus great re-
straint would be put upon reckless exPend.
itUre or borrowing
The details of plan by which the
idea may be carried out are then sug-
gcsted, all of which is very seductive
scheme to indebted States and commu-
mites. We do not see that it has any
less Of the centraliZing features Of the
present National banking system,
while it probably opens greater oppOr-
tunities to abuses and corruption. New
ertheless, we shall not be surprised to
find the banks making an effort of this
kind to perpetuate their existence.