The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1885-01-13
TIE NATIONAL BANK SYSTEM,


stands as we'll as any other man in the Nation.
Aftefan explanation of the legislation creating
the national system, the purpose of which is
to secure the bill-holder from loss and to
provide currency readily convertible into
coin, which two fundamental objects have
been satisfactorily attained. Mr.. Sherman dis
cusses the question of the basis for the nation
al bank circulation. He favors the passage by
the House of the Mcpherson bill, providing
for the issue of circulation to the amount of the
face value of the bonds instead of only 90
per cent, as at present. The passage of the
bill at the time it was proposed would at once
have effected an increase of $50, 900, 600 in the
aggregate of bank-note currency, and Mr.. Sher-
man says: ''The passage of that bill by the
House would, no doubt promptly restore the
aggregate of bank circulation to the highest
amount ever issued, and, in the opinion of
sagacious men, would have removed the only
difficulty in the way"
Mr.. Sherman does not share the prevalent
fear that the rapid payment of the public
debt will destroy the basis of the national cur
rency. He says:
"This fear is not we'll founded, or it will
occur only at a period so remote that Congress
will have ample time to provide for the con-
tingency. The amount of bonds outstanding
on the LIST Of November last. was ST.. 1872, 49,
600. while only the sum of $3.50, 900, 900 is
10 to.,0 NJ
highest amount heretofore issued The fear
that these bonds would advance in price is
not likely to be realized. The constant lessen
ing Of their duration will tend to reduce their
market value, and it is not likely that at any
time in the future will they bear higher
market value than they do now. The tenden-
cy is the other way. The total
amount to be paid upon an ex-
listing 4 per cent. bond for 500
maturing in 1907 is $3.50. While there is
limited demand for public securities without
ment in them will yield, yet experience shows
that they will fall in value in exact proportion
to their duration. They have been unduly
advanced by the enormous payments made
from surplus revenue, but this surplus revenue
is diminishing by the repeal of taxes, by the
changed condition of business, and by the
general feeling that it is not good policy to
collect taxes for the reduction of the public
debt beyond the requirements of the sinking
fund. That such is the public feeling is shown
by the general demand that no taxes shall be
levied except to meet the current wants and
requirements of the law. In harmony with
this policy, the executive branch of the gov
eminent has proposed treaty stipulations
which will reduce the revenue, and if these
fail, further reduction of taxes and new OBJ
jects of public expenditure, such as the crea-
ton of navy bounties to our commerce, and
public improvements, are likely to absorb all
the surplus revenue not actually needed for
public wants"
For these reasons Mr.. Sherman thinks that
if Congress will grant the moderate relief af-
forded in the Mcpherson bill, the national
banking system is not in danger of being en-
barrasaed by the advancing price of bonds.
He does not think it well to provide before
hand for contingency 80 remote as the ulti-
mate reduction &c the public debt to sum
less than that required for banking purposes.
When that time shall have come it will be
soon enough to consider whether special
government security for bank notes is advisa-
BILE, OF whether some other form Of security
can be safely substituted, or whether come
other form of paper money shall be devised to
supply the necessities of domestic exchange
For himself Mr. Sherman thinks the ma
tional banking system has so won
upon the judgment of the people that
they will not consent to do away with it. In
the future, doubtless, certificates resting upon
coin will be large portion of the currency
and such currency, depending upon such de-
posits, seems to be free from all objection,
especially if the coins upon which they are
based are of equal market value; but it would
not be prudent for commercial community
to depend solely upon this form of currency
because the gold and silver may readily be
exported; but to it should be added a supply
of paper money always redeemable in coin
perfectly secure, created by national law, of
uniform credit and currency throughout the
United States, not depending upon the chang
ing opinions and interests Of politicians, but
regulated as near as may be by the wants of
trade and commerce. This is the kind of a
currency the national banks have furnished
the country, and there will be an almost unan-
imous protest against experimentation on so
vital matter as the peoples money, especial
ly if that experimentation is likely to lead in
the direction of return to the wildcat, :"
various and varied Statebank currency of
former times. The conservation of the ma
tional banking system, and of the national
bank currency, in the interests of the people,
is one of the important and essential duties
of wise craftsmanship.
CHE organ of DIR. Harrison, and of the pros
Et,,ti oE tho Stato hox,arroin.at