New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1884-01-07
BUCKNER'S NEW SCHEME.
HIS BILL TO PREVENT CONTRACTION.
THE MEASURE FINANCIALLY UNsoUND AND UNCoS
STITUTIONAL-POINTs OF CRITICISM
fpy TELEGRAPH To THE rRIpIrsE


fBY TELEGRAPH TRIBUsE.I
WAsHINGTON, Jan. 6.-The bill of Judge Buck
ner, Chairman ofthe House Committee on Banking
and Currency, ITO prevent undue contraction OF
the paper circulation" which he will introduce on
Monday, is regarded as uDsound and uDcOnstitu-
tional by some Of the most eminent fLancers and
constitutional lawyers. A TRIBUN correspondent
has oonversed with several prominent
Republicans, who, in spite Of the new
garb ingeniously thrown around 1t
by Judge Bucker, declare they recOg-
nize the old enemy enbackismn II is asserted
that the only basis Cor the National bank currency
now existing by Congressional authority is as
privilege or franchise granted to the association
which issues such notes, part and parcel of the
scheme proposed by Congress 10 borrow money on
the credit of the United States" during the war.
These quoted words are the only authority
tanned in the Constitution of the United States by
W hch tho Government issue or emit bills OK
credit or authorize anybody else so to do.
PURELY 4 WAR MEASURE.
It was to aid and make sure of rapid and fair
priced sale of bonds during the war that Congress
granted the privilege associations TO organize as
banks and issue circulating notes to be secured by
the United States bonds, which the Government
needed to sell to prosecute the war. The
system was a valuable auxiliary in placing
these bonds which were authorized by the
Constitution under the clause authorizing Congress
"TO borrow money on the credit of the United
States. 4" The United States Treasury notes, COM
monty called grecnbacks, " issued also during the
war; were legal only as authorized by this proyis-
ion of tho Constitution. They were a forced loan,
and their lcpa-tendcr quality was added by Con-
gress to make Of their general circulation.
They were borrowing money on the credit OF the
United States without the consent of the citizen,
IL. 4 r.fftaf fIan Of
peoples money to the Government, TO aid and en-
couragc which the privilege of issuing circulating
notes was granted TO certain associations.
WITHOUT CONSTITUTIONAL AUTHORITY.
1t will be claimed by the opponents of Judge
Buckners bill that there is absolutely no authority
in the Constitution by which the Government can
issue Treasury notes except ito borrow money on
the credit of the United States" 1t cannot emit
bills of credit take the place of the notes of pri-
vate OF Other corporations chartered by the United
States any more than it could issue such bills or
credit TO substitute for bank notes issued
under State authority. The substitution OF
its bills of credit for other peoples is not
its business Such bills can only be issued by the
Government to borrow money TO pay its debts lhe
National bank notes are not q debt Of the Govern
mcnt The relation of the Government to them is
that of trustee for the securities which the law
reduireS to b. placed in its hands as security for tho
notes of these private banks which it has author
lied to organize and do business.
IN THE CONSTITUTIONAL CONVENTION.
In speaking of the cOnstitutOnality of this pro-
posed Democratic measure for emitting more paper
money one well-known constitutional lawyer
called attention to the fact that In the convention
which adopted the Constitution, article was
proposed authorizing Congress TO emit bills OK
credit" whenever it was deemed necessary for the
of ,lo Mr
it vehemcutly as a vicious proposition, and
Mr. Madison, while first thinking it harmless
hpcauSe il did not contain a legal tender clause,
finally voted against the clause altogether, because
he would do away with any and every pretext or
authority in Congress to authorize the remission or
hills Of credit rs a written constitutional grant OF
mower. leaving the matter an authority which
Congress might assume under the power granted TO
borrow money the credit of the United States,
but a, the worst alternative under that power, and
one to be encouraged or even mentioned, in tho
Constitution. The proposition voted down in
the convention.
SOME POINTS OF OBJECTION.
In short il will be urged that the 4" traditions Of
the Republic" which Judge Buckner speaks of, are
all against his nnsound proposition, and that in no
instance were such notes issued from the days OF
Continental money until the period of the CIVn
War. That the po icy of issuing Treasury notes IS
one reached as last resort, even IN time
of war and great pnblic emergency, when the
Govern aent needs to borrow money, and that any
scheme tu issue such bills ofcIedt in time of peace,
not only not 10 borrow money, but To substitute
the credit of the Government for the credit notes
of private corporations, absurdIy ana badly IN
contTlveutiun of the policy and letter "i The Con-
stitutiOn. There Is no legal authority lOf the
National bank notes. bat the debt OF tine United
Jrndno Rrpnblicans are emphatic i'm declaring
Al.
contraction can be legal and constitutional, that
does not base such notes on said bOnds-some new
relative percentage of issue, 10 encourage and lus-
tIfy the banks IN hypothecatng the present long-
time high priced bonds security for their clIculA-
ion, or a new longtime bond of small interest
those purposes; though the latter propo-
sitipn involves the question why
plns revenue ,hond increase lis surplus by gong
into the market as a borrower. These seem to DO
some of the Institutional objections to his scEeme
which Judge Buckucr will have to meet
GOvEitNNENT AND THE BANKS.
1t will also Toe urged that the Government has
nothing to do with the banks in monetary sense;
that 1t superiutendS the printing of notes merely to
make them uniform and 10 protect the
people against cOuncrfeits, etc. that the banks
are taxed TO pay all these expenses. The whole
scheme IL merely the substitution of Treasury
notes for corporation notes. 1t is also claimed that
the practical effect of the scheme would be as dam
grrous as the LEGAL aspects are unsound. Speaking
roundly of the $2O0OOO,OO0 of per cent call
bo uds twO birds are owned by the National banks
and one-thlrd by private individuals no
Rnckner notes would bo paid out IN eX-
change for the retired National bank notes,
50 the Outlct for the surplus revenue would be tho
p,vm.nt of bonds owned by individuals. Estimat-
ing the surplus revenue for the coming year nc
$50 900 900 aud surprising ten per cent Margin on
the bank bunds rs well as the bank notes are 10 DO
redeemed by these Buckmcr notes, II would rrqnre
"A ca N of no less than 81 10 900, 600 within 4B9,-
900, 600 of the cutuc amount for the coming year,
in order to dispose of the Surplus revenue.
HOW BUsISE,, WOULD TE AFFECTED.
Grave donbt4 ara entertained 10 Judge
n..-L...r,. .tn..-n..ut thnI hls nrnnnsltlnn VIII