Birmingham state herald., 1896-11-21
THE GREENBACK QUESTION.

Cincinnati Enquirer. N
 It is all very we'll to toll congress what generally won't doit.-Baltimore Ameri- can. fl A ,1
 The best part of it is that congress is generally right, as, for instance, when it refused to take MT. Cleyeland's advice to retire the greenbacks, next to gold the very best part of our currency. and thus imperil all business interests in the union.-New York Sun ss
 And congress will continue to refuse to take MT. Cleveland's advice on the sub ject. The greenbacks will Dot be retired.
 Why should the governments promises to pay be abolished as part of our cur rency to make way for the governments promises that private banks will pay? There are some banking houses in the United States the notes of which would be received generally with confidence. Their certificates of deposit are go re- liable that they would be counted as good as gold. So there are some mercantile houses whose aceeptances would be looked upon in the. same way But no system can be devised under. which banks of issue generally could make their notes acceptable everywhere, as representa- tiyes of money value, unless they had the unconditional indersementand guarantee of Uuele Sam. Banks of issue are neither necessary nor desirable As we'll have banks of coinage. The issuing of circu- lating notes is no moresa Legitimate func- tion of banks than is the coinage or money The creation of money and its substitutes or representatives IS solely a government function. Checks. drafts ana certificates of deposit are all Hinstrumen- talities of trade and their value depends upon the estimate placed on the credit or their maker. The same may be said or the promissory notes of individuals or or corporations. Before the WAT such notes, printed on engraved plates. were issued by state banks in denominations or rom one to one hundred dollars, and constitut- ed what was regarded as the paper money of the country. In some states they Were guara nteed by the state government, upon the deposit with a state official of approved bonds just as our national bank notes of the present time are guar anteed by the United States, upon the de- posit in the treasury of the Unlted States. of United States bonds. But in some or the states no such guarantee existed, ana the holders of the notes of. the banks m those states often found their vaiue shrink and disappear in day.
 To be able to circulate one promlssory notes as money, so that his debts are thereby transferred into capital, is nice thing. Equally So with bank cor porations, when the United States Coy ernment kindly comes forward ana teiis the banking corporation. that 1t does not mind indorsng it's notes, whlcn, other wise, would have no standing in most cases the notes of private parties are thereby invested with the money func- tion. Able fnanciers, like Controller Eckels are then made happy. But when the government chooses to give it's own promissory notes in the form of green backs in exchange for services or sup plies, then all the Eckelses in the land smte their breasts and depreciate the participation of the government in the banking business. ;" All of which is the veriest bosh. The issuing of greenbacks is not the banking business. Their re- demption at the treasury on demand IS not the banking business. The issue Of bank notes is not the banking business. The legitimate business of banks IS to receive deposits and make loans, under such restrictions of law as will secure the depositors. and at the same time. &C., commodate the public and give employ ment at a profit to capital that would otherwise be idle. |, The goyernment is in the banking business tonly when 1t be- comes the indorser of the notes of banks. It should "go cut of the banking busi- ness" The banks should go out of the government business of issuing money in any form. We repeat that the issue of notes to be used as circulating medi- um is as strictly the governments func- tion as is the coining of money. We have yet to hear of any proposition that the coinage of money shall be turned over to the banks on the ground that 1t does not look we'll for the government to be engaged in the banking business.