The Anderson intelligencer. [volume] (Anderson Court House, S.C.) 1860-1914, 1892-05-26
Let Us have Free Banks:

There is now a movement seriously on
foot in Congress to abolish the discrimi-
mating tax on State bank notes. This
movement was sure to start simultaneous
ly with the defeat of tho silver movement.
1t is confined mainly to the Southern
States, but it has clements of growth
which must be briefly noticed before con-
sidering the merits Of the plan. It is so
long since we have seen any State bank
notes that we are accustomed now to con-
slider them as something unlawful and
akin to counterfeiting. Yet if the 10 pcr
cent. Federal tax were repealed, the
whole machinery for issuing, regulating
and redeeming such notes would be found
on the New York statute book, ready
made, and we presume that similar ma
chinery, disused, but not abolished,
would be found in the other older States.
State bank notes would como into exist
ence by natural process without any new
legislation.
In New York the security of our own
State bonds, or of United States bonds, is
required for circulation notes. Tho State
bonds having all disappeared from the
market, only United States bonds could
be used, but since notes could be issued
on these up to their par value instead Of
90 per cent. thereof las under the nation
al bank act,) it would be worth while to
buy them for State bank issues. In short,
all the apparatus exists for transforming
the currency system of the country by
means of bill of not more than five
lines repeating that discriminating tax.
And as to this repeal the advocates of it
say, with good deal of force, that the ex-
ercise Of the Federal taxing power, not to
raise revenue, but to kill off legitimate
vocation-one declared to be such by the
highest tribunal in the lard-is perver-
sion and stretch of that power which
no number of repetitions can justify or
palliate.
This movement has its most active
supporters in the South, where the silver
movement is the strongest. In that quar-
ter it is an alternative to free coinage. It
would be possible politically to take eve-
ry Southern State out of the silver cate
CORY by offering State bank notes instead
thereof, and whilo we cannot as yet give
our support to the plan, we can say, new
ertheless that as between free silver and
free banking we prefer the latter.
There is an idea prevailing in the rural
South that there is shortage of money in
the country. This idea is fixed and
widespread, and there is no use to argue
about it. 1t is this idea that has mado so
many and such determined advocates Of
the free coinage Of silver there. It is the
same idea that gave birth to the wild
subtreasury plan. Anything which shall,
in the minds of the people, serve as a SUBJ
stitute for free silver and subtreasury,
will kill both of those heresies with one
stone. A system of State bank note is
sues is, upon the face of things, more
speedy and effectual means of providing
new supply of money than either of the
other plans. We say "upon the face of
things" because in reality, if the notes
were properly secured, the facilities for
providing new supplies of money would
be little if any greater than they arc un-
der the national banking system.
The time is approaching, and it may be
nearer than any of US think, when the
banking problem must be taken up and
settled. There is gradual shrinkage of
national bank notes going on in obedience
to well-known causes. The vacuum is be-
ing filed with'what Secretary Foster calls
ssilver behind"-with paper which is
really Government obligations, like
greenbacks, except that they have an ap-
parent backing of silver bullion, which is
of no more importance than the backing Of
firebrick with which the treasury vaults
are lined. The question, wo say, must
como up for decision soon, whether this
wretched system, eHtorted from the fears
of the Republican party, whiio the force
bill was pending two years ago, shall
continue, or some substitute shall Oe
found for it. "Unsettled questions have
no pity for the repose Of nations" and
here is one of them that will keep vexing
us till it is taken up and thrashed out by
healthy and sufficient discussion, and de-
cded. AS our readers know, we consid-
er the present national banking system
the best for our purposes that has ever
been devised by the wit of man, although
there is pressing need Of a new basis OF
security for circulating notes. We should
be sorry to see it superseded or even
1anked by system Of State bank issues.
| But things cannot stand still. Something
must be done soon in accord with human
intelligence, or something will happen in
! spite thereof It can bo said with truth
| that the State banks Of the South and the
East in tho olden time were generally
good, and it can be said with probable
| truth that no very bad banking like the