Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1886-12-04
The Ranks.

The Comptroller Of the Currency having
raised, as we have heretofore stated,
question ss to the power OF Congress TO
charter banks issuing no circulating notes,
The Nation, IN commenting upon the ques.
tjop. calls attention TO the fact that Con-
yress has assumed that 1t possessed such
power, in providing by statute how na-
tional banks may surrender their circuls-
ton and still continue In business as banks
OF discount and deposit. We think that
there can hardly be doubt that the Su-
preme Court Of the United States would
hold that Congress has the power alluded
to. 1t can scarcely be possible that Con-
gress has the power 10 make greenbacks q
legal tender for all debts, public and pri-
ystr, and set Is destitute OF power to char
ter national banks 10 aud in the dissemina-
ton OF that currency and to afford to the
public facilities in the banking line which
are necessary to the increase, II not to the
ssreeulation," OF the commerce between
the several States.
The Louisville Courier. Journal proposes
by providing by law that on the bonds
which they deposit to secure their circuls-
t,on they shall be allowed to issue dollar
for every dollar Of the face Of the bonds.
We quote:
"The true solution Is readily found in
abe 4 per cent. bonds. There are more than
300, OOO, 900 Of those bonds, and they are
therefore, create circulation considerably
more than double the present issue, and
they are 10 run for period about equal 10
the whole past life of the system. But the
bonds are worth 1884. and the banks would
lose monty by issuing them as a basis oil
circulation under the present system.
"But see the folly OF that system. A
bank in buying the = would pay sl2S,000
for S1OO, 900 bonds at par value, aud on this
outlay 1t would receive $4,000 Of notes.
II would therefore drop $4,000 out OF its
use on every 100000 Of bonds purchased.
II II were TO buy 100000 3 per cents ut
their present value, which l. par, it would
get SOC 900 In notes for 800, 00s invested in
bonds. IL II would buy 100000 A. per
cents. II would get 100000 OF notes for
S111,JOO invested in bonds. So that 1t
would lose the use of an OUTLAY OF $2S,-
600, or IS per cent. Of the par OF the bonds,
by taking As instead OF Is, or GIG, 800, or l6i
per cent, by taking the As instead OF the A
per cents.
"Now the panest man can see that this
system Il uDscentiflc. Each class OF bond,
performs exactly the same functions. and
the contingen cies Of the note ISSUES are ex-
actly the same on the one bond basis as on the
other; and yet there are Determinations OF
at.,uf l.a A. to-
other reason than mere accident, mere
lack Of forecast In the national legislature
"Ou the assumption that the bank sys-
tenn Is to be preserved with its issue func-
ton, In order to avoid universal currency
shock the course TO be pursued Is clear.
TIE banks should be allowed exactly 100
per cent. OF the par value OF the bonds de-
posted. The full par value Of the bonds Is.
OF course, guaranteed, dollar for dollar, by
the Government, and that guarantee, which
Is msnifestIy complete, would carry specie
guarantee OF dollar for dollar for the bans
notes issued against them. The Is and IS
would permit an expansion o. the system 10
fouriold its present volume"
II would be perfectly safe to allow the
banks TO issue notes to the amount OF 90 per
cent. Of the market value Of their bonds.
Let us repeat, once more, that the inter-
est on all these bonds has 10 be paid to
somebody, and, to say the least, might IS
well be paid to the banks as to any other
owner. The people receive from the banks
a valuable consideration in the form OF a
currency good from Maine TO Texas,
whereas they would receive from any other
owners OF the bonds no consideration
whatever.
The Boston Herald says: "There is no
danger that banks and banking will 80 out
OF fashion In case banks are deprived OF
the profits Of circulation" They may not
get out Of fashion, and yet they may 60
out Of the national bank system. There
Ii 10 fear that there will not be banks
enough, but that these banks will be each
a law unto Itself, aud too many OF them in
danger OF reycrting TO the wildcat system
Of ante-belum days. The Herald makes
the following suggestion:
ali the bonds which bear ~ per cent
interest and mature in 1891 could be ex'
changed for longtime bends vt per cent.
with the understanding that certain
amount OF these should be kept as "a basis
Of circulation, the question for that time
would be solved.
1.-THE national banks have given Us
sound and uniform currency. practically as
good As that OF the Bank OF England, and
we should be very much opposed TO any
plan for driving that currency out unless IL
provided for one equally good"
The present Congress viii reuder the
country an inestimable service IL II shall
successfully solve this problem, aud the
present President win In that event be the
NEXT President.