Fort Worth daily gazette. (Fort Worth, Tex.) 1882-1891, 1883-12-29
A Question nf Finance.

The rapidity with which the govern
ment of the United States is paying off
the national debt directs the attention
of finance to the time, which appears
not very far distant, when the nation
al banks can no longer avail them
selves of United States securities as
basis for their issue Of circulating notes.
While it is true that there is some diff
ference of opinion in regard to the rate
ut which the government debt should
he eXtinguished, there is no question
that the American sentiment is in IA
vor of paying of the debt at the earli-
est moment compatible with the inter-
est of the people as affected 10y taxa
ton. At all events there will be no
popular desire to maintain a public
debt in order to furnish national banks
with safe securities for their currency.
The question lie, what sort of securities
will be found to take the place of the
national bonds? This question seems
to exclude the theory that the govern
ment may furnish all the currency
that will be needed, an assumption,
in the opinion of eminent financicrs,
not ut all warranted, If to the pres
ent stock of legal tender greenbacks be
added gold and silver certificates
equal TO the coin resources OF
the country, and non-legai tender
treasury notes, redeemable in coin and
protected Ivy an ample reserve, it is
not impossible to conceive that the ma
tional bank currency might disappear
altogether without any monetary dis
turbance. At the same time IL must
be admitted that whenever the ques-
ton is narrowed down to Il choice be-
tween the national bank system and
any possible system of state bank cur
rency, the former will always COM
mand the support OF the business pub
lie and conservative pr ople anywhere.
If national bank currency were 70 be
based upon the security of corporation
public or private and individual
bonds, it would have no advantage
over the old state bank system of cur
rency. That plan will not work.
Nothing short of Il combination of ma
tional faith and individual liability
will suffice to keep bank currency at
par under ali circumstances, and
place redemption beyond all ques-
ton. The gold a. d silver certificates,
representing an actual deposit in the
United states treasury, will furnish
the former; unrestricted liability of
shareholders and universal guarantee
by all national banks, which may be
provided by all national banks receiv-
ing at par the circ Hating notes OF all
other national banks, would provide
the latter. OF course, it can only be
determined by serious deliberation,
and possibly only after more or less
experimenting, what proportion it
will be necessary to keep in specie or
certificates of overDment deposits ms
- 'NSNi w va ANpN'iil '''VAi pun IlpsCst uuu
how much margin may be safely trust
ed TO unlimited liability of shareho,d-
ers, 1t is certain that the latter con-
dition has always served to keep the
circulating notes of the Scotch banks
nj par, and ii is state that, under
the same condition, there would never
have been any loss TO the public on
national bank notes by the failures
that have occurred since the national
banking system was established in
this country, even if there had been
no deposit of Unitel States securities.
in ease the paym of the circulating
notes had been gwen preference by
law over all other liabilities. Never
theless, it will Always be necessary to
provide for an ample redemption fund.
and also for a combined guarantee of
redemption ut any tank operated UNI
der the national law, in order to re-
tam lin the absence OF government Sc
curities) the popular confidence in the
safety of nntjopni bnnly ,,to. -