Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1892-10-06

Governor Mckinley said, in his recent
speech, that the purpose of the act of
Congress imposing tax of 10 per cent
on state bank notes was "open ana nm
concealed. 1t was to displace the state
bank circulation with national bank
currency and national money" He
went on to say that this was a war
measure and "wc had to do it to pay
the expenses and meet the obligations
OF the government and preserve the
Union."
This is straight enough as far as il
goes, but lacks explicitness. The main
object was to enlarge the demand for
government bonds by forcing the banks
to buy them. This was accomplished
by making these bonds the basis of
hank circulation, When the national
bank system was established, in Febru-
airy, 1868, most readers will remember
that United States securities were selling
at an enormous discount. Gold com
manded high premium; in August of
the following year, 1854, it had gone up
to 273 per cent; that is to say, one dollar
in gold was worth $2.73 in greenbacks
or national bank notes. So that,
averaging the market value of United
States bonds at that time at Sl.05 in
greenbacks, 81 900 in gold would buy
$4,000 worth of bonds. Since the value
of both greenbacks and national bank
notes, which were interchangeable, de-
pended upon the value OF these bonds,
it is easy to understand that the growing
demand thus created for the bonds by
newly organized national banks had a
great deal to do with preventing the still
further depreciation of the national cur
rency which Governor Mckinley seems
to have forgotten was not always "as
good in London as it is in Philadel-
phia."
1t was several years after this, in 1870
in fact, that Mr.. Rutherford B. Hayes
then occupying the White House by the
grace, or disgrace of the electoral COM
mission, sent message to Congress in
which he said:
The retirement from circulation of United
states notes, with the capacity of legal ten
ger III private contracts is step to be taken
III our progress towards Il safe and stable
currency, which should be accepted as the
policy and duty of the government, and
the interest and security OF the people. 1t
IS my firm conviction that the issue of legal
tender paper money based wholly upon the
authority and credit Of the government ex-
cept III extreme emergency, is without war
rant IN the constitution and violation of
sound financial principles. The issue of
United States notes during the late civil
war, with the capacity of legal tender be-
tween private individuals was not author
lied except as n means of rescuing the
country from imminent peril The cir
culation OF these notes as paper money,
Tor any protracted period of time after tile
accomplishment of this purpose, was not
contemplated by the trainers OF tine law
under which they we're issued They antici-
pated the redemption and withdrawal of
these notes at the earliest practicable period
consistent with theattaininent OF the object
for which they were provided
We have resurrected this utterance OF
Mr.. Hayes, MT to endorse it, but simply
to warn our Republican friends to 20 a
little slow on this business, or the frs.
thing they know they may find them.
selves treading on their own toes.