Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1891-03-22
Tho Old or a New Banking Syst EN-?


tional-bank system Of this country we
do not think that that system is in danger
of being Immediately abolished, and so we
did not hasten to its support. we are stlll
ot the opinion quoted from US by a. b,
that banks of issue are desirable, even
necessary. although we admit that the
people would gladly surrender the present
system If something superior to 1t were
originated.
"The power TO coin money and regulate
its value is vested by the Constitution IN
Congress, and its exercise Is one OF the high
est acts Of sovereignty" says A. b. True;
but issuing fat currency Is not coming
monev.n The same Constitution forblds
any State to make anything but gold ana
silver legal tender for debts-pretty good
evidence that the trainers of the Constitu-
ton had been cursed with continental
currency and were determined that
their children should not be troubled
in like manner. Money cannot be
coined out paper. Real money IS
the result Of the coming process
not paper money-not greenbacks, or trea-
sury notes. To talk about coming green
backs il as if one should talk of making
ice without water, or bread without Hour,
or meal or some other article out of which
bread can be made. The Supreme Court
Of the United States has renderedtwo con-
fieting decisions as TO the power of Con-
eress to make greenbacks legal tender;
and so we will let one Of these decisions
upset the other, and say that IN our opin-
ion the fathers of the republic never
dreamed that Congress had any such
power. But. however this may be, 1t Is
certain that the coming OF money without
metal is q task like that imposed by PA
R.oH upon the children Of Israel Of making
bricks without straw.
United States treasury notes. or green
backs, constitute good currency in time
of peace: but they would very soon de-
preciate if this country were to get into
war with any great power. The Govern
ment bonds, instead Of selling at par or
higher, would constantly fall in value so
long as state of war continued. They
would begin to deprecIate as soon as Con-
gress WAS asked for the first appropriation
of money to be expended upon the war.
The treasury notes would fall faster than
the bonds. And if the war should last for
any considerable time the greenbacks Is
sued to pay its expenses would or might
depreciate to the point touched by green
backs in 1854, when 1t took several So
called dollars Of greenbacks to buy
one dollar of real money-slver or gold
and when the prices of all commodities
had 80 advanced that the fall in the value
of greenbacks did not represent one half
of the loss sustained by the people. In
| 1854 coffee sold for 81 cents per pound,
western -four for S11.75, corn Sl.9O, raw SUI
| gar Is cents, and so on. These prices were
| bogus prices-not prices that helped any
body except spectators in the necessaries
of life, but prices which were put upon
commodities TO prevent losses due to de-
preciated currency. The richest and most
peaceful country in the world was power
| less to mako its paper promises to pay
money as good as real money. When SUI
car was selling in 1864 for IS cents per
pound il could have been bought for less
than u cents per pound in gold. No.
There is no way in which to cause the laws
| OF nature to cease their operation.
National-bank notes. on the other hand,
have not only the credit of the United
States at their back, but property in add
ton. The note-holders are secured by a
deposit at Washington and the property
of the banks is also liable for all their
debts. We need not argue this point The
people. as we have said more than once
heretofore, would gladly welcome better
banking system. But it behooves us to be
sure that it is better one before we give
up the existing one.
Now as to the interest question. The
Federal Government owes, let us suppose,
| a thousand millions of dollars, and pays
annually from thirty TO forty millions of
interest upon that debt. The Government
would not save single dollar of interest
by forbidding the banks to own Govern
ment bonds; whereas the note-holders
would IN that event have no security that
| those notes would ever be paid. The con-
sequence would necessarily be return to
the old wildcat bank system, the main
| feature of which was the establishment Of
| banks of issue everywhere and anywhere
having no bonds, nor property, nor Sc
curity Of any kind to offer to their note
holders. Just imagine the hundreds Of
| millions of national-bank notes now out
standing to be- in themselves the only
security which their note-holders had, and
| you can imagine that panic and new
| wildcat system of banking would soon re-
suit. And, as we have said, the Govern
ment would not be benefited to the extent
of one dime by thus destroying the value
| Of the existing bank notes, and compelling
the people to accept either nothing or
notes whose solvency was secured in no
way whatever.
II Is mistake to suppose that the inter-
ests Of banking capitalists make them
favor contraction OF the currency. The
exact reverse Is the fact. The banks could
make much money by Issuing hundreds of
millions of notes and lending them.out and
drawing interest upon them; but the Gov
eminent forbsds them to issue any notes
not secured by Government bonds TO the
extent of 90 per cent. Of their value. It lie
Sho OOVcihincit tuAt Iuub COutrhCIS tHo
currency, not the banks. Whist would re-
suit II 1t did not thus require the banks to
issue none but well-secured notes, we have
just stated. The wildcat system would
soon sicken the people with bogus money,
and they would visit their condemnation
upon the unfaithful public servants who
had thus led them into financial bog.
II is another mistake to suppose that the
entire existing banking system would ne
cessarily have TO die II the national debt
we're paid of. We long ago gave to our
readers different methods which had been
suggested for perpetuating that systemic
course in form somewhat different from
its present form. The worst that could
happen would be the substitution Of such
wildcat schemes as too many men propose
In utter ignorance Of the laws Of finance.
A n A. ts. .-.skL