Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1882-05-24
OUR FUTURE NATIONAL CURRENCY

Solid work has evidently not been a favor
lite exercise with the present Congress, but the
absolute necessity OF the case did at last
lead that body of procrastinationists to take
up and pass the bill for re-chartering tine
national banks. Various changes were made
in the old law, changes that some of the
newspapers denounced as injurious, while
others regard them a whole as of no great
moment The amendment, however, which
takes from the banks the power, by mutual
action, of contracting the currency at will, is
generally regarded with favor. The national
banks are to go on for another twenty years,
but an important difficulty in their operation
| is arising, Independent of the charter ques-
ton. The credit of the bank circulation is
assured by the bank depositing bonds
with the government. As the country
is calling in and paying off these
bonds, time is near at hand when they will
be no longer available; in their absence how
are the banks to supply the security re-
quired? The question is grave one, for
within four years over sixty per cent. of the
security now held will disappear, and in
eight years seventy per cent. will be gone.
L ne only SECURITIES lcll Will Uo Tue IOur per
cents, but they command price offering lit
tie inducement for the banks to invest in
them. What, under these circumstances. is
to be substituted for government bonds? is a
question that has for some time occupied at
tention but has, az yet, received no authori-
tative answer. The banks themselves have,
hitherto, appeared to be apathetic upon the
int of he
so strongly denounce, vociferate, and condemn
whenever the banks take an active part in
matters with which they are essentially iden-
tilted, that they appear to have come to the
conclusion that self-respect obliges them to
leave the public 10 attend to financial mat
tiers in which its own interests are
vitality concerned, while they themselves
confine their attention simply to the business
interests of each individual bank. This
attitude, enforced upon the banks by per-
sistent abuse, renders it the more important
that the people should maturely consider
how the approaching crisis is to be met. The
only plan which has as yet excited any
attention, is that suggested by Senator Alli-
son, of Iowa, in the North American for
4AC cChdlOi ouSSCobAOho eAG drCAuA
as a starting point for consideration. His
plan is to allow the government to receive
deposits OF gold coin and to issue, in conven-
lent amounts, certificates which shall take
the place of the present national bank notes.
II is urged that a circulation, having gold
coin as its basis, dollar for dollar, will be
self-regulating and absolutely safe, and will
No laaA to suddan contraction or
pension of the volume of the paper circula-
ton. But Senator Allison sees that more
liberal currency system than this would
be required, one that, while practically
redeemable in coin, would not require dol |
lar for dollar reserve. To effect this he
would allow banks to issue notes to
the extent of one-half their capital, for
which notes the holder should have the first
lien On assets, and for any deficiency the
stockholders must be held to individual
liability. The notes to be convertible into
coin not only at the counter of the bank, but,
also, at one or more central agencies for re-
demption, notch olders to be secured ''abso-
lutte redemption in case of failure of the
bank" Notes issued beyond the amount of
half the capital to have a gold reserve of
dollar for dollar. Those who will reflect
upon the merits and deficiencies of the plan
here proposed, will make some progress to-
ward discovering how the contingency that
is approaching is to be met, 80 that practi-
cal scheme may be prepared for submission
to Congress, free from the hair-brained plans
contemplated by various amateur financial
ista, and fitted to meet the crisis that will
arise with the extinction of our national
d.ht