Butler citizen. [volume] (Butler, Pa.) 1877-1922, 1893-12-01

get hills in excess of 90 per cent of its cap
ital stock The Government has nothing
to do with the redemption of these bills so
long as the bank is solvent and doing bus
mess. If the bank fails. then the Govern
ment sells its bonds, on deposit in the
Treasury, and redeems the circulating
notes on presentation.
The Government owns no stock IN any
National bank, but all such banks are sub
iect TO careful examinations by public
officers, appointed for that purpose, and
are under the constant oversight OF the
Controller of the Currency.
These National banks were of immense
value to the Government during the Civil
War because of the large amounts of Gov
ernment bonds bought and paid for by
them at time when il was difficult for the
Government to get money with which to
meet its current expenses. DOUBT II any
safer or better system OF banking has ever
been devised on the face of the earth. The
National bank notes are absolutely secure.
These institutions have also been OF great
service to the people at large.
National banks all do general banking
business and are managed by boards OF di-
rectors elected by the stockholders. They
do not differ in that respect from any Or
dinary banks.
There are still large number of State
banks and private banks in the United
States, but none of them issue notes for
circulation as money. Nor are these IN
sttutions subject TO examination by the
officials of the United States Government,
In 1865 Congress passed law taxing the
issue of all State banks 10 per cent. This
law drove all State bank bills out OF rexis
tence, and induced large numbers of the
banks to reorganize as National banks. In
deed, such was undoubtedly the object
sought by imposing the tax; and 1t worked
like charm The difference between the
present National banks and the old Banks
of the United States" consists mainly IN
the fact that the Government is not a
stockholder in our present National banks
and that the Government controls the
issue Of our present National banks, and
marked feature of the present law is the
ease with which five or more American
citizens can form a National bank at any
time in any city in the Union.
There was never bul one Bank of the
United States" in existence at the same
time, and the Government pledged itself
TO charter no other such bank during the
life of the charter of that one. The old
Bank of the United States was monopo-
ly with special powers. Our present Ma
tional banks cons itu te a vast system OF
banking, the privileges of which can be Sc
cured by any number of American citizens,
il the number shall exceed five, who may
desire to engage in that kind of business.
The business done by all banks is of sim
liar character, except perhaps the dlffer-
ence between commercial and savings
banks is of a similar character. The
business transactions of the old Banks of
the United States" differ in no respect
from the business done today by each Ma
tional bank. This much can be said in IA
vor of our present system: 1t is the out
growth of long and laborious experience.
The banking business, like all other insti-
tutions of human invention, has been de-
veloped and improved by the natural pro-
cess OF evolution new system ought to
he an improvement on the old. Men OF
sense learn to better such institutions by
experience.
There is a clamor just now among mem
bers of the Populist party, joined In By
many Southern Democrats, against our Ma
tional banks. Some of the Popullsts have
gone so far as to claim that the Govern
ment should be made responsible for all
the deposits in each and every National
bank. So far as / know, no government
on the face of the earth assumes such re-
sponsibllity. AS the law now stands de-
positors in National banks get their pay
first; and the stockholders are liable to pay
their stock over again, If necessary, to
protect such depositors. When the Gov
verment becomes responsible, under the
present plan, for the bank notes issued By
a National bank it runs no risk. Can any
one devise plan which would enable the
Government TO assume the payment of de-
posits without riskf This scheme must
have originated in the minds of the men
who conceive that governments should do
all the business of the world and own all
the property. | take no stock in such
nonsense. Ny faith is of kind entirely
different. | would have our Government
leave the business of this nation to be man.
aged as much as possible by individuals,
and as little as possible by the State.
Laws should be framed so as to give all an
equal chance, and then leave the rest to
the skill, energy, pluck aud management
of individuals In that way, and that
alone, can the capacity of our people for
business and business Improvements be
fully developed
Previous to 1872 the greenbacks which |
had been issued during the wal had been
redeemed and destroyed until they were
only about $346, 900, 900 of them left in cir
culation. A law was then passed requir- |
ing that amount to be kept in circulation |
as money, and they are now reissued |
whenever they find their way into the |
Treasury of the nired States. II any of
them are destroyed on account of being |
mutilated and worn out, new ones are Is |
sued in their place. The Government has
issued large amount of gold and silver
certificates and Treasury notes, the latter
being issued for the payment of the silver
purchased.
Hence the volume of paper in this coun-
try is to day very large. The struggle to
keep all our money at par with gold has been
a severe one for the last ten months. No
paper money ever has been, or ever can be, |
worth any more than the hard cash is |
worth inte which it can be converted. |
That, and that alone, determines the pur- |
chasing power of each and every paper |
dollar.
In concluding this article | desire to
state that each "Bank of the United |
States" met necessity which existed at
the time of its organization. Both of those |
institutions did a good work, and were the |
best suggestion that occurred to the minds |
of the aDlest business men of our country |
atjthst time. 0ur.present National banks"
are great improvement over either OF
those institutions. / doubt II any |
department of life is better example Of
the development theory than the banking |
system of the present day. The system |
may be improved and perfected; it certainly |
should not be abolished.