The Dallas daily herald. [volume] (Dallas, Tex.) 1873-1887, 1884-08-14

congress has jurisdiction.
The matter was referred to the execu-
tive committee to press to early action.
The subioined paper was then read by
Secretary Marshland from the Hon.
Hugh McCulloch, eX-Secretary of the
Treasury, who was unable to be present,
on the banking situation and the recent
decision of the Supreme Court on the
constitutionality of the greenback legis-
lation of 1878:
Mr., President and Gentlemen of the Conven-
ton:
Questions of great public interest can
not be too freely discussed, although
those who participate in the discussion
may say nothing new. 1t is this CON
sideration that induces me to send you
this communication.
The excellence of the National bank
ing system has been proved by trial of
more than twenty years. 1t has done
all that its warmest advocates expected,
1t has given to the country what it
never had before and greatly needed,
bank note circulation perfectly secured
and current throughout the Union. 1t
has done more, it has shown that there
can be "A great National Banking sys-
tenn without the centralized power of
National Bank, and free from partisan
politics. 1t has not, it is true in all
cases, protected depOsitors from losses.
This has never been done and never can
be, under any system of banking; but it
is safe to say that the losses Of dcposi-
tors by the failure of Ma
tional nks-cnormously rs depositors
have been increased within the last
twcnty years-haye been much less than
ihey were under the system Gf it might
De called SYSTEM that preceded it.
lhal 1t mas not been more effective i'm
This direction is attributable to the fact.
That while in the management of the
banks party politics have been ignored,
Inc Comptroller has, in some instances,
been forced to yield his better Judgment
IN the appointment Of examiners to the
pressure OF politicians, who have had
IIleliuS 10 De served or supporters to be
rewarded 10 be Il competent examiner
OF banks, especially of the large banks
1T our coiiiiletclal cues man should
have qualifications which very few mon
possess. lie should have a thorough
knowledge Of bookkeeping, combined
with a strong will and perfect integrity.
nc should be hard worker
and so keen and thorough i'm
ms investigations as to render mposi-
ton difficult, if not impossible. He
should be able, as some men are, TO tell
by the bearing Of the officers of a bank.
ana even its very atmosphere, whether
It Is faithfully or unlaithiuly managed.
before he examines it. Having had, i'm
wears long passed, n good deal of eXpe-
renee IN the examination of banks, |
know how difficult Of performance the
duties OF Il bank examiner are, and what
his qualifications should be, 10 select
examiners of the right kind, no one is so
competent as the Comptroller ought to
be, and no one has so deep an interest,
as far as reputation is concerned, as
lllnSell, IN the manner in which their
duties are performed. II is by him that
examiners are appointed. They are his
agents, and he is to some extent respon-
slDle for their Incompetence or neglect.
lie should therefore be perfectly indie
pendent of all outside influences i'm
making appointments. This, appre-
mend, has not always been the case, and
to TINS is attributable, to a large extent,
The fact that the examination of the
National banks have not been, i'm all in
stances, as intelligent and searching as
theY ought to have been. Still, as have
sad, the National banking system has
done all and moro than its advocates en-
pected. By superSeding the State banks,
upon which, without it, the Government
would have been compelled to RELY i'm
the late civil war for Il bank note cur-
rcncy, II did much to save the Govern
ment from bankruptcy, and il has for
nearly quarter of Il century furnished
the country with bank notes on which
no loss has been, or ever can be, sus-
tanned. did not, however, commence
writing this letter for the purposc of
eulOgizing the National banking sys-
tom, but of speaking very briefly of The
hangers which threaten its perpctuity.
Us great value, nay, its very existence
depends upon the security OF the notes
ISSUED by the banks which are or
ganizcd under il. This security con
S'SlS OF Government bonds, which arc
deposited with the Treasurer i'm WASH
ington. Nothing else will answer the
purpose. Bank notes should always be
rcdcemablc in coin, but they would
never be issued il they were to be pro.
tected 10y an equal amount of coin i'm the
vaults OF the banks. They must, to a
large extent, he based upon credit, and
there can be no credit reliable enough
for the basis of a National paper cur
rcnoy, except the National credit. Nufu-
NIX therefore, but the bonds of the Gov
Crnment can perfectly secure a
National bank note circulation. OF
these bonds, the National banks
are being rapidly deprived, and will
be soon deprived altogether, unless the
| public revenues are largely reduced,
! ihc pubic sentiment seems To demand
an eNtlnguishmcnt of the public debt as
soon rs the condition of the Treasury
| viii permit 1t; but so highly is the Nj
/ lunal banking system approved hy the
| business men OF the country; so essen
| lial has its maintenance become to our
National prosperity; SO ontwinod is il
| with both public and private interests,
/ That the sentiment in favor of the cN-
/ llnguiShment of the debt would doubt
less be satisfied with reduction of il to
such an amount rs would bo neodful to
secure a bank-nOtc circulation, were il
| not Tor the recent decision OF the Su-
! premc Court ON the legal-trnder Ques-
! uoh, which throws dark cloud over
/ the financial outlook II is not
! for me TO criticiso that dccis-
ION The justices Of that
! court are among my personal
| friends. have the highest respect for
ihieir characters and legal acQuirmentss
rms much, however, cannot torhear to
say: 1t is decision which fails to com
mend the approval of the best legal
minds OF the country 1t clothes Con-
gresS with imperial power-the power
which the trainers of the Constitution
maniioStly intended to withhold, IL m .
uounces Il new doctrine, that Congress-.
instead of being limited to the exercise
OF enumerated powers, may do ANYTHING
and everything which the Constitution
docs not absolutely prohibit. Indeed, il
10y its authority to coin and borrow
money, Congress can authorize the issue
of Government notes MS money, It is dill.
hcult to see what power does not consti.
tntlonGlly belong TO IL. Discus.
sion OF this question, however, is now of
no avail. 1t is now the law, thai
Congress, In the exercise of its own dis.
erection, may authorize the issue of leual
tender notes at all times aud to any
amount Such Is the decision of the
court, from whose decision there is nc
appeal, and 1t is not to be disguised that
u puts the National banking system i'm
imminent jeopardy. Nothing can save
: II If the redemption of Government
bonds goes on, and this can only he pre-
vented by reduction of the Govern,
ment Income to tho amount required Il
cover its ordinary expenses, OF which