The times. [volume] (Richmond, Va.) 1890-1903, 1892-11-15
STATE BANK NOTES.

ina AAbaN NNAAN
journal, the New York Daily Commercial
Bulletin, he's, for some time, been an
earnest advocate of the repeal of the
act of Congress imposing a tax of 10 per
cent. on the issues of currency by State
banks. A day or two back it had an
elaborate and admirable article discussing
the proposition from a number of points
Of view. It summarizes its arguments for
the repeal thus:
We have advocated tina course mainly
for these reasons
Cd That the tax was originally intended
as a temporary expedient for diverting
banking to the national system, which
was contrived as a support TO war
finance;
() That, as that purpose is no longer
operative, the constitutional right or the
State banks TO issue notes should no
longer be held in allegiance TO Federal
Intervention;
go That. from the nature of the national
system, it tended TO the extinction of its
own circulation and had already suffered
q compulsory retirement Of about two-
thirds of its original maximum of note
issues:
O That his contraction Of bank cir
culation had encouraged the mania for
an increase OF silver dollars as a substi-
toute and was keeping alive the clamor
for free coinage;
CD That the national system imposed
such arbitrary conditions Of guarantee
against its notes as were fatal TO their
issue and, being unpopular. there was
little or no hope of those restraints being
remedied by Congress; and
60 That, unless we are to open the
flood gates for the unrestricted use of
silver, it Is imperative, in order TO pro-
vide due elasticity in our system OF cir
culation, that the State banks should be
forthwith allowed the exercise of this
natural, rfghtful and wholesome func-
ton.
The Times has on several occasions
very earnestly pressed upon public atten-
ton every argument presented here, be-
sides several others OF equal cogency.
1t desires this morning to call especial
attention to the second of the above pro-
positions, which it has frequently re-
marked on before.
Nothing could be more erroneous than
the general idea that those who favor
the repeal OF the tax are making any
sort of war on the national banking cur
rency. No one proposes TO interfere with
the national banks in any way whatever.
Let them continue to do business and
to put out notes as long as they please.
All that is asked is that corporations
chartered by the state Legislatures shall
have the same right.
The Commercial Bulletin well speaks Of
this as a constitutional right" Every
citizen. natural person or corporation has
a natural right to issue his or its promis-
sorry notes, and it is an unwarrantable
abridgment of the individuals natural
right to prevent such issue by arbitrary
acts of the legislative power. Any argu-
ment that will justify Congress in for
bidding the State banks TO issue their
promissory notes will justify it in for
bidding a merchant TO give his creditor
his %promissory note. Both stand upon
the same footing. The act of Congress is
an intolerable abridgment Of the natural
right Of the people, founded on a popular
misconception of the true inancia func
ton Of paper currency.
A circumstance which ought to have
very great weight with those not capa-
BILE of thinking this subject out for them
selves is the fact that the leading finan-
cial papers of this country earnestly ad-
vocate the repeal of this tax. 1t surely
ought TO have some influence with a man
who is compelled to admit to himself
that he does not understand the subject
very well, to tell him that the New York
Journal of Commerce, the Financial
Chronicle and the Daily Commercial Bull
letin favor the repeal.
These journals represent essentially the
hard money idea. and they abhor what
ever smacks of the imitation of the cur
rency or unsound currency. Yet, the ad-
vantages to m of State bank
issues are so obvious to these leaders OF
thought in commercial matters that, with
entire unanimity, they press for them
with all their might. The small fry ought
to be modest In obtruding their crude
views into such a presence.