Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1886-12-01
WEDNESDAY. :. DECEMBER I, 1896
The Banks-The Constitution-The
Circulation.

Circulation.
We were rather surprised that at so late
day the Comptroller OF the Currency
should have raised the question OF the
power OF Congress to charter banks having
no circulation. This be has done In his
annual report Of this year, as we stated yes
terday.
On the other hand, In the last years Re-
port OF the Comptroller Of the Currency,
the then Comptroller, after saying that the
excess above the required minimum OF
bonds deposited from July, 1882. to July,
1888, was % per cent. Of the total deposit,
and this excess from July, 1888, to July,
1884, was only IA per cent. Of the total
deposit, and from 1884 TO 1885 was only s
per cent, adds:
"This shows conclusively that the banks
Organized between the periods named have
not been induced to enter the system on &C.
count Of the profit TO be derived from the
issue OF circulating notes, but because 1t
was believed by their managers that they
would have 8 better credit and standing
with the public under the national bank act
than as State or private banks"
Hon. HENRY w. CANNON was the Comp
troller at the time when that report was
written. Mr.. TRENHOLM is the Comptroller
now. But the facts cannot be altered by
change in the incumbent OF the Office. We
do not mean to say that there is any real
conflict Of opinion between the two Comp
trollers, but merely to note the fact that Mr..
CANNON did not seem TO think that there
was any constitutional question involved.
The implication, on the contrary, is that As
the banks spoken of did not enter the ma
tional banking system in order to secure the
privilege OF issuing notes but 10 insure 8
better credit and standing with the public,
the system itself might well be perpetuated
for the benefit of the public, even though,
owing to the high pnce or scarcity OF ma
tional bonds, the banks might decide to
issue no circulating notes.
In the earlier days OF the republic the
power Of the General Government to char.
fer banks Of circulation, deposit, and dis.
count was denied by some Of the greatest
OF the statesmen OF those days. In 1911
Mr.. CLAY made one OF the mos. celebrated
speeches Of bis life, in which he denied that
power to Congress. Long afterwards Gen.
eral JACKSON made war upon the National
Bank, and never ceased his warfare until
he had put II down. There was but one,
but II had branches. The mother bank
was in Philadelphia. II would be remark
able If the enemies Of the existing national
banking system were to reopen the question
in new form, and whilst admitting the
power Of Congress to charter banks Of cir
culatiOn, deny its power 10 charter banks
oi.discount and deposit only.
But the national banks are too deeply en-.
trtnehed 10 the favor OF the public TO have
augbt to fear from any question that can be
raised against them, or any war that can be
made upon them, In the interest OF State
banks. Nor have they anything TO fear
from the Greenbackers though these have
created a considerable prejudice against the
policy Of allowing the national banks to
issue circulating notes; but their substi'
tute would be the issue Of irredeemable
greenbacks by the Government, and this
scheme Is not at all likely to succeed. On
the contrary, II Is not half as popular as II
was ten years ago. The people have learned
that they do not lose a copper by allowing
the banks TO issue notes upon interest-bear-
ing bonds, as the same amount OF interest
would have TO be paid upon the bonds in
anybojy's hands. The people have safe
currency provided at no cost themselves.
The danger TO the national banks lies IL
another direction-namely, In the new GER
tificaies, redeemable some In gold and som'
In silver, which are now issued from thu
United States Treasury. These seem to b'
more nearly like real money than any Other
paper currency; because they are ISSUED
upon actual deposits OF the precious metals
and can be converted at will into gold or int
silver, one OF the other. depending upor
how they read. The silver.men will pro
badly push their policy OF issuing as MANI
Of these certificates as may be needed Il
take the place Of all the retired national
bank notes, and may lind among the adyo
Gates Of good money some congressmei
who would rather fall in with that pla'
thar run the risk OF authorizing the unlim
tied coinage Of silver.
+. s.-since writing the foregoing W
have received from W. W. FLANAGAN
ESQ.,. cashier OF the Commercial Nationa
Bank, OF New York, a pamphlet in whicl
be defends his proposition 10 make silver
basis Of national bank circulation. w
may notice II hereafter at greater length.