The Iowa plain dealer. [volume] (New Oregon, Howard County, Iowa) 1867-1895, 1882-05-04
BANKS AND CURRENCY.

BANKS AND CURRENCY.
Speech 81 Hen. George w. Ludd, O1
1ainc, In the National House Of
Representatives.
The Honse having under consideration the
Ill to enable natlonal-banking associations to
1cnd their corporate existence, Mr.. Ladd
,aid:
Mr.. Speaker, let lis look at some OF the argu-
nents used by the friends OF our natiOilal-
banking institutions. When it was proposcd
to enlarge the issuc OF greenbacks, we were
told that trade controls prices and tho entire
:,ursuit OF business operations depended upon
tho volume Of currency, aud that TO increase it
was = foolish or wicked "infiat,On.' But when
other questions came mp, that OF Diminishing
the coin part OF money by one-half by demon
etlzing silver, the same persons who deprecate
imitation made the discovery that the volume of
money % Of no const tquence, and that it may be
eeduced to any extent without injury. The
Comptroller OF the Currency in his last report
proclaims the new doctrine in the following
language: "Con and currency are but the
sfnall change used IN trade. checks and drafts
are substitutes for money" And hetherefore
proceeds to adopt and indorse the following
Ut bankers Of London, Oct. 10 last:
Diae books full OF weighty arguments, all
curiously wrought out to help in the settle
mont OF the great note question. It Is clear
hat the check and the caring system are the
nam lines upon which banking is destined to
run. Dead theories respecting notes and tho
light OF Issue belong to tho generation 10
which they we're living veritics. To us the
living fact Is the substitution Of new instru-
snent Of credit. For the present generation
lie Improvement of the check and the clearing
systtm. the mechanical details Of Office organ
'zatlon, those details OF book keeping which
save time are, from the enormous number Of
documents passing through the hands OF bank
srs. Of more wcight than the most learned
reatlsc on notes and nOte-Makers"
Il this doctrine IL true, no reason II visible
or maintaining the costly machinery OF the
Office Of Comptroller Of the Currency, and
lone for Techartering national banks. The
business Of checks and draf > can be conducted
just ~ well. and TO any extent, through State
banks and private banks, and the only special
object Of National banks ID to secure cur
rcncy OF notes having general circulation II
coin and currency arc but the small change
used III trade, we have an abundance already.
III gold aud silver coin and existing green
bscks, when all the national banks shall have
- The London Bankers Magazine for No
yember, which has just been received, contains
an abstract of . paper recently read BY Mr..
Pownall before the London Bankers Institute.
from which the following table has been com
piled. The percentages Of the receipts in the
.'ty Of New York ON September II have also
b n aided to tho table:
Localities. Coin. Notes. Checks.
per cent. per cent per cent.
New wiork............ 30 .65 $3.50
London. ............. - 2O4 1923
Ed,sLarsh E!,,,i,, IS i2s1 ss.7s
csuntry banks in 26i
PAGES: 100000. 1870 ll.a 72.s6
ut will be seen that the proportion Of checks
aud drafts used in London does not vary greatiy
from tnat OF the same items shown in tbs re-
ceipts of the banks in New York city,"
Now that the vast fabric of modern business
has grown beyond the old sy stem of the hand
ling OF the metals i'll exchange for the legal
payment OF debt, the one class who deal in
large sums by the use OF representative money,
the bank check and draft, should not forget
that the industrial classes, who produce that
which renders them able to deal in large sums.
have rights which they should respect. Among
those rights, they claim to use a representative
money, the greenback as the best and safest
yet devised. That in largo money centers there
Is next to no coin or currency used - conceded;
and that IN such localities they have so little
use for currency that ii IL an instrument only
to be used as standard OF value.
In this we find the true inwardness OF the.
desire OF capital to strike down one OF tho
metals as standard Of value. By demonetz-
ing silver. One-half Of our metal money. they
correspondinsly lessen that which measures
the products OF the country, and thereby give
to the gold dollar the purchasing power Of 20
OF bimetal currency. ihis cannot be denied II
the theory could be carried ont. Still more
wonderful, those who advocate this do not
longer propose to handle gold coin they ask
Government to issne gold certificates for their
especial benefit. MS mere portable and handled
with less trouble aud danger. Thus, it will lie
seen, where their own interests are concerned.
they are anxious TO trust the Government to
issue paper obligations. Now let me bring the
money theory to tho practical wants Of business
life.
Tne man Of industry, he who produces 500
bushels Of wheat, which takes him from Elk to
seven months OF time and labor, is III daily
want OF currency to pay for labor, materials,
taxes, etc. When his grain is ready for market
b. has expended s4OO in currency; he then
PAYS freight on it, which maintains your rail-
ro.'ds this amounts 10 500 more. 1t is then,
perilaps, changed by the miller into 100 barrels
OF -four. When it reaches tho merchant in
New York the farmer has invested in all $500
III currency, on an average Of five months
time.
The merchant goes upon Change ut II
o'clock, sells the 100 barrels OF fiour in thirty
or sixty minutes, obtains his pay on delivery,
takes check for $3.50, this check COOS through
the bank and Clearing House, pays the mer-
chants aud bankers balances, and no money is
requ red. only the grand confidence.
MIR. Speaker, the question for the country to
decide Is this Shall merchant and banker who
do not use currency be allowed to dictate to the
producer what the standard shall be, single or
double; what the quality and character Of the
oh all hn vl,as, 10 NoI k~&h
equally safe for circulation? Tho former, using
Ill their business next to no currency, aud the
latter. from necessity, using all his land and
labor produces.
Again. shall the producer have . voice in
legislation for the adoption Of an honest cur
reey for the future? insist that those who
clsin to use only representative money should
net denounce Others a. being infstionists !;
thoee who ask the privilege of having continued
. currency winch is now conceded has no equal,
and which is universally preferred to the
metals for general use.
Apply the legal principle in evidence, that
which IL wrong in part IL wrong III all, to our
existing laws, regulating banks Of issue, how
will the benks stand2
Bnt few years since the expansion OF cred-
its from the nse OF representative money! the
check and draft, obliged the banks to suspend
Lawful payments in greenbacks. They brilgei
over this suspension hy certifying one another 4
obligations, faiiin, from scarcity to meet their
legal obligation in our lesal-tender treasury
note.
II il claimed that the present system or
banks il superior to all others. This DENY.
Under what system of banking ever before
devised could cashier Of bank nse up all
the assets. stock. deposits and credits, leaving
nothing but stove and desks, as wac done in
Newark, N. j.. TO tho amount OF q million
Again, Pre-id mt OF bank il Boston m king
away with ali tho bank h I'd. and ~ much more,
resulting In the loss Of mlllions. In both cases
the very intelligent Board Of Directors aud
Bank Examiners. it was found, had been boss
ing .splritu,l shadows" for months. while the
cashier and President had been dealing in
bubbles which happsned to burst at MONDAY
aud could no longer be hid.
Only IN one cAse can II be said that our ma
tional-bank currency ID superior to any previ-