New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1892-08-01

blank bills These blank bills not money
they cannot be used such; they must lirst DC
| signed by the officers Of the bank. Then they DC
| come the promssory notes Of the bank ana not
Of the Government. They are not lcSal-tenoer
| for debts The banks issuing them are compelled
| however. 10 redeem them on presentation in money
which Is n legal-tendcF. In or Ter - protect thc
| nrople who take National bank bills as money,
ard TO secure people against loss. the National
bank before IT. can secure its bills. Is compelled
| to purchase United States bonds and deposit them
in the Treasury OF the United states, Sloo OF
euch bonds for every $40 Of blank bills received:
and then il the National bank fails TO redeem us
bills when signed and issued the Government sells
the bonds which it holds, which really belong 10
the bank, and with the proceeds arising from the
aale Of the BONDS redccms the bills oil TIE oank'
| This is not n loan TO the bank.
| Tho whole system of National banks vas de-
| visod FOR the purpose OF enabling people VIII"
wanted TO orranize such institutions 10 Issue
| pron,ssory notes which could bc used as cur
rcacv. and Al the same time 10 secure the re-
dcmption OF such notes when found IN ire names
| Of the people. 1t is without DOUBT inc safest
and most excellent system Of banking ever A''
devised by human ingenuity. The system is per
hans susceptible Of improvement as all human
| institutions are: but | defy any human being
Ia give an instance where, up 70 date the pco-
Die have been better protected than nnocr thc
| National banking system Of the United states
There institutions are owned and managed by incr-
chants mechanics and farmers all over the Cni'ed
States. o>.
pcfore closing this article l want TO say just
another word about the real money OF the world.
Real money must always he some substance
which is the result Of human labor IL must oi
necessity be sumo article which, In its crude
state. is the product Of Nature, but which mas
had added TO it human work
| A ton Of steel rails costs to-day $50 simply
because it costs about $50 worth OF human Ton
or1 materials 10 take the ore in fs raw condi-
| tio, rs If lies untouched in the surface OF the
Garth. and carry the mp through all it's pro
ccsscs until the result is reached OF ton OF steci
rails
4 nromissory note which should promise to pay
| one Ton IF steel rails would be worth just as
much as the rails themselves providing the maker
was responsible for that amount and never failed
| IN nro1uce tho rails on demand. The moment the
| ability Of the maker Of the note 10 produce the
rails became doubtful, that moment the note
world deprcciate in value Just the moment II
| became evident that the rails would never bc
nrolnred in payment Of the note th" note wonh
become absolutely worthless The rail, possess IN
| trinsc value Tho promssory note possesses
value because II represents something having
| intrinsic value ana because there is certainty
Of rs redemption Tho real money OF the world
must always be something TINT possesses TINS
intrinsic understanding which carries in its
yrrv makeup actual v7lue. piece OF paper, 10
possess valne M circulating medium. must always
hc a promise e. pay in something which has ms
intrinsic value: and it must always hH redeemed
on presentation or II will dcpreciate in value
THAT nAxK or VENICE.
think have In my possession nearly halt
hundred letters in which the writer's ask me-
Did not the Bank of Venice issuc its bills and
were they not for hundreds Of years at par ahd
above par though they were not rcdecmablc'
wonder how many people who arc constantly re-
fcrrinr 10 That Bank Of Venice have the least
idea Ms n what those bills were ? They wcrr not
honl, hills Al NIL. They we're certificates OF
deposit
The Government forced a large number OF
wealthy men 70 dcptsit large sums OF money In
file Eank OF Venice for which the bank issued Its
certificate Of deposit, bearing interest at 4 per
cent n year The Government then compelled
| the bank 10 loan it the money and passed law
| prohibiting the depositors from presenting the
certificates for payment In that way 'hoSe
certificates Of deposit became actually perpetual
bonds Of the Government, bearing interest at
ner eent year Now, Just &C long as the COY
| eminent lasted and kept its contract with the
| bank those certificates were above par, inst as
United States bond day would be above par II
IFS interest was secured without any regard TO how
| long it might be before the principal would 10
paid. The longer such bond had to run the
| more valuable IL would be.
| These modern lovers Of the Bank OF Venice,
| however. omit one circumstance connected with
those bills The Government finally failed To
| keep its promises with the bank; the bank also
| failed: and the people who held those certificates
lost every dollar. If the holders OF those crrtifi-
Gates had had, in place of the certificates gold or
! silver. steel or tin, or any substance possessing
| intrinsic value, they would have been secure.
Now as the Government does not produce these
articles Of intrinsic value for The use Of Its prl-
vate citizens neither should it be expected To
supply them with promises 70 pay in materials
which II does not itself produce.
| Let me repeat again, in conclusion: ms
whole trouble arises from q mistaken notion as 70
what can be required Of Government Any ono
who comprehents the fact that government must
always be sustained and supported by the people,
| and that no n.tion should be required to supply
money TO private individuals for their private
business, can ever he led astray by these modern
| theorists. H. IT, llOhh"
re