Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1893-12-10
Federal Supervision Over State Banks

| The Times corrects. arter 4 ihSnion VI
its own. its unintentionai misrepresenta-
ton OF our record as to State banks
with Federal supervision and State banks
without Federal supervision. But our
neighbor .ntimates that the difference Is
like that between tweedledee and tweedle-
dunn. But nobody else thinks so. President
Cleveland does not think so. Neither 90
the fnanciers Of the country.
The Committee of Ways and Means Is
expected soon to report a bill to repeal
the tax on State bank-notes, but only
,,pon condition that the banks issuing
them shall be subjected to Federal con-
troll. and the notes themselves be amply
secured" In a word, the new system
will be the present national-bank system
based upon other securities than United
States bonds, which can no longer be had
for that purpose.
The Times asks us TO point out that
nrovision OF the Federal Constitution
which authorizes Congress to provide for
superyision Of corporations" chartered
by the States. As we look at the mat
ter corporations" is good. But we shall
not be misled by the use of that word.
II Congress has the power to protect the
country from the unsecured issues OK
State banks It has the power to provide
for Federal supervision over them, though
the name be changed from bank" to
corporation"
Instead, however, OF giving our own
opinion as TO the power or right OF Con-
gress to assume jurisdiction over State
banks and StSte-bank issues, we viii
give the opinion of the lawfully-author-
ICED expounders Of the Federal Constitu-
ton that the taxing act Of Congress now
in force is mot unconstitutional" or, in
other words, is constitutional, as 1t must
necessarily be II It is not unconstitu-
tional.
For years an act of Congress has been
in force taxing the circulating notes OF
State banks; or. to phrase 1t differently
the Federal Government has exercised the
power to supervise the currency issued by
State banks and TO tax same cut OF ex-
1Stence. ibis Is tHe TAX "hiSh 'hc hu
preme Court of the United States has de-
cided is mot unconstitutional" or, in
other words, is, as we have said, consti-
tutional.
To seek TO maintain the proposition that
that law IS unconstitutional and there
fore the Federal Government has no
right to exercise any sort Of supervision.
much less control. over State banks, is
to beg the question, or TO take a posi-
ton from which no argument could posi-
bly, dlslodge the person holding it. Why
does not the Times hold as to the de-
clsions OF the Supreme Court Of the
United States the doctrine which It holds
as to what was settled at Appomattox
Courthouse? Touching the latter that
paper, after reciting that 1t still believes
that the States when they entered into
the Union reserved the right to with
draw from It If the compact was broken.
adds that when we were conquered on
the battlefield and at the mercy Of our
conquerors, our future existence as States
was granted to US upon CONDITION that
we would never again assert the right to
secede. 1--WE are therefore barred from
asserting the terms OF our old contract
by the new contract which we made at
Appomattox."
Again: The subcommittee Of the Com
mittee on Banking and Currency In the
national House OF Representatives has
agreed to report to the full committee a
bill favored by President Cleveland which
provides that the issues OF State curren-
cy. or the circulating notes of State
banks, shall be under the control or d.
rection of the Federal Comptroller Of the
Currency, and shall be limited in amount
by this Federal supervision. and shall
be "amply secured is, the note-hold-
ers shall be secured. What is the use
Of arguing the question OF power in the
face OF such authority and such facts?
We have just as much right as our neigh
Dor to pronounce a decision OF the SUI
prems Court a war-decision wrongfully
made. We have the right, II such de-
csions do not end discussion, 10 maintain
that the Supreme Court has never right
fully decided that the denial TO the
several States of the power to emit bills
of credit did not apply to notes issued
by banks chartered by a State No such
decision could be rendered now; for both
United States Treasury-notes and the
notes Of national banks have been de-
cIared by the Supreme Court to be
bills Of credit" And II they are bills
OF credit then circulating notes of State
banks are "bills Of credit" and SO no
State has the power to emit these bills
OF credit.
Again: In the case of the Veazie Bank
versus Fenno, the Supreme Court. Chief
Justice Chase speaking for 1t, said that
the court could not go into the question
whether the tax was laid to destroy or
not: that Congress had 1.-THE right to
establish system OF national currency
and to suppress all State-bank issues
which came In conflict with that system"
That seems to US to be plain enough.
We quote further from that case:
Having thus, in the exercise OF undls-
puted constitutional powers, undertaken
10 provide a currency for the whole coun-
try. 1t cannot be questioned that Con-
gress may constitutionally secure the
benefit OF II TO the people by appropriate
legislation. To the same end, Congress
may restrain, by suitable enactments,
the circulation as money of any notes
not issued under its own authority"
That is, any notes issued by the States
or State banks.
Not one objection can be raised 5 to
the right OF Congress, under this opinion
of the Supreme Court. to exercise fun
control over the issues OF State banks.
For, as that august tribunal says:
Without this power, indeed, its attempts
to secure a sound and uniform currency
for the country would be futile" The
only answer that can be made Is, There's
where we differ with the Supreme Court"
In addition to this warning OF the highest
court In the land against wildcat
currency, and against thus destroying
the best currency the world ever saw,
we will state that the subcommittee
above spoken of finds the power TO exer-
else Federal supervision over State banks
In that uaction of the Constitution which