The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1893-08-26
The Banks and the Law.

Senator PETER. Popul;st of Kansas. offered
resolution in the Senate on Wednesday,
making inquiry of the Secretary of the Treas
ury Us to the conduct of national banks in
refusing to pay promptly, in currency, the
checks of their depositors, and u motion was
made 10 refer it to the committee an finance.
A debate ioloYed, Hoar, Voorhees,, Mander.
son and German and others in favor OF the
reference and by PETER, Kyle, Wolcott and
Hill and others against it. The latter four
wanted immediate action, believing that the
committee would report that the banks are
violating the law, but that in the present
situation To bring the banks to n strict COM
pliance would result in closing up the most
of them. The passage Of the resolution, it
was argued, would be notice to the comp
troller TO enforce the law.
Mr.. German argued in favor of the refer.
ence of the resolution. For the third or
fourth time, he said, during the present none
tary system IA point had been reached where
the national banks were failure, so far as
their power to relieve the condition of the
country was concerned. 1t had been reached
in 1878, 1877, 1887, 1890, and now in 1893. At
those periods it was utterly impossible for
the banks 10 comply literally with the law.
They had violated it by refusing TO pay cheeks
of depositors and had issued clearing house
certificates. They were doing that today.
They had done il with the eye of the Secre-
tary OF the Treasury and of the Comptroller
of the Currency upon them. but the enforce
lnent of the law on any of those occasions
would have resulted in the destruction not
only of the financial institutions, but of every
interest of the country. Never had there
been u period half so threatening as that
which confronted the Senate today.
Mr.. Hoar-"Suppose the comptroller of
the currency shuts up these banks, will not
the result be that every one of these banks
will have to be placed in the hands of a re.
cever and that nobody will get any money!
Mr.. German. The Senator states the law.
He knows that that Is the law, and the mover
of the resolution and every gentleman OF
intelligence in the United States understands
that that is the fact. Every one knows that
there IL u technical violation of the law, but
it is the duty of the men in charge of the
government not TO do add TO the distress.
Under our present system of fnane the bangs
are powerless unless they act as they are act
ing. There is no relief to be given 10 them.
On former occasions relief was given by the
sale of bonds, by the deposit of government
funds in the national banks and by the antici-
patton of interest on the bonds. But now
none of these remedies can be applied. The
Secretary Of the Treasury and his chief lind
themselves powerless to give relief. Bonds
cannot be redeemed, for you have left moth
ing in the treasury to redeem them with. No
deposit Of government funds can be made in
the banks, because the money is not in the
treasury. The adoption of the pending reso
luton would be understood by the country
and by the executive officers as an expression
of opinion by the Senate that the law must be
enforced; and that would mean destruction to
the interest of the country. We have come
here, not to produce further distress, but to
give relief TO the country in whatever form
we can do so. The rule or custom of the
Senate that any Senator may call upon the
department for information ought to be. III
this case, violated and set aside in the interest
of the common country.