The midland journal. (Rising Sun, Md.) 1885-1947, 1890-10-03
The National Bank Law.

N'NN'' " 'hN NOuhty pub ~
nish subsidy for money changers Sen
ator Stewart.
The national banking law has proved a
failure in one Of the PRETENDED objects oil
its enactment. l, had Tie seeds of dssolu-
ton implanted in it at its birth which soon
began TO develop. When the public deb,
was made the basis of banking system il
became at once the Object of speculation,
the demand for bonds by banking companies
naturally making them subjects for the
Spectator in stocks, and in the case oil
securities that could not fall below par, the
spectators were as sure 10 he all on the bull
side, and interested only in tossing up the
premium on the bonds. Banks which had
placed large amounts of bonds with the
Treasurer 10 secure circulation, when the
premiums began to move upwards naturally
inclined to realize be fore the premium be-
gan to recede which it must do as the bonds
approached maturity. New bank. bough,
sparingly, the high premium they had It,
pay being so much idle capital invested.
The steady rise in premium on the bonds
tended more and more to diminish the
amount of circulation of the Older banks,
which withdrew their bonds and returned
their circulation to the Treasurer, while
the new banks deposited the minimum
amount with the Treasurer which would
suffice to secure National Bank charter.
The statement of some of the banks shows a
capital Of 81, 800, COO and surplus of two
to four millions more, whose circulation is
but $l5 900 or 0,0O0. This steady con-
traction created a stringency in the money
centers and the United States Treasury soon
became the main source looked to for relief,
and appeals are constantly made to the
Secretary of the Treasury to anticipate the
interest on bonds, and to purchase bonds
with the surplus in the Treasury, which is
idle money, to relieve the stringency in the
money Market" and enable business to
proceed. This worked in favor of a steady
advance in premiums on the bonds, and ar
steadily forced the National Banks to re-
turn their currency in order to sell bonds
and realize on the premiums. The law
took the control of the currency out of the
hands of the government and placed it en-
tirely in those of the banks. The banks
had the power TO increase or contract il at
will, but the premium on the bonds insured
but one result, that of contraction, while
the growing business of the country demand
ed steady expansion to conduct it. Nation
al Bank notes are fast approaching their
vanishing point. The Financier in late
issue estimates the amount of per cents IN
possession of the National Banks TO be
$l23, 100000. This amount at its maxi
mum will represent but SOL 900 900 OF
national bank currency. This amount OF
currency added TO whatever may be repre-
scented by the Al bonds, can scarcely reach
$l3S, 900, all told, in place of 81 ,OOO,-
100000, which the business of the country
demands. These are facts. patent to all, and
they prove the national banking system a
dismal failure as regulator of the currency,
but monumental success as bond specu-
lation.
The whole public debt Of $2,SCO, GOO, 900
when created would have purchased l,4OO,
000,0C0 bushels OF wheat only. The re-
naming unpaid. which is drawing interest,
OF less than $500 DOC, 900, would buy ,OO0,-
100000 bushels of wheat 1t is not sur
prising that demand which cannot long
be resisted, is made by the producing class
es for a radical change in financial sys-
TEN, which has increased the national debt
that cost so cents in gold to premium Of
20 cents above par in gold; over $50 per
cent above its cost, with purchasing power
of 200 ever per cent measured by the drop
in prices Of products and other property.
Any system of banking founded on Sc
cu.ities that can be manipulated by stock
SPECTATORS must prove a failure. Our
national banking system has been weighed
in the balance and found wanting and
Itkel is written oyer the bank door.
Had not the much abused silver dollar
and certificates assisted in eking ont the
meagre supply of money it is alarming to
contemplate what the financial condition
must have been at present. With bu
$lSS,0C0,C0 national bark notes, $780,
600, 900 greenbacks and about $500 COO COZ
silver dollars and certificates in circulation
as our money supply 10 transact the stead
lily growing business of this country (gold
does not circulate) it is not at all surprising
that call loans have been quoted as high al
1881 per cent in New York.
Senator Stewart very plainly present!
the hopeless condition of the debtor under
contraction in his speech delivered in The
silver debate last May. Mr.. Stewart said
ut is impossible TO pay debts contracted
when money was cheap with money made
dear by contraction. The vast army o
enforced idlers costs the Government by the
loss of production more every year than tht
entire national debt. While contraction
continues there can be no relief. Price,
will continue to fall, more laborers will be
thrown out Of employment, more farms will
be taken by the mortgages, more farmer;
will become tenants, the holders of accumu'
lated capital will become landlords, the
tenants will become serfs, and landlord;
will take the same position towards the