New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-12-08

unon other sections.
The National banks located in the Southern
States have an aggregate capital Of ~sySsoo"' On
october s. 1895, they had borrowed largely from
hanks in the East. to assist in handling the cotton
crop s35sSoo On March following tnn these in
had been reduced to s5e2o9 They sue CONNER
cal required With propeT ea nnw
sss hs Be- sssssS t for sn %n%a w
am confident that under an act t a,Gc
interest 10 issue instead Of sso5o 900 the amour,
S wnsh to the n fu and in
@ ss Soa%e OF Of
ns 3 per cent Of their capital record. o, the
dsa safTsd Of %s 1sso'H'
that during the existence OF the canita
of he s' number Snf% this list
wE sap a@ Of .0y have
an noas baa such $40 notes been
outstanding to tho tg Limit f as ner Gespectvey
P Pbe deficiency would have required to cover Il
from the % asnd failed III put assoca
tons maintained in current use an amount OF nose
issues equal TO IS per cent OF their capital as
able Of s s . saSwn to banks aaxs
failed %oys sq hare see their e
vide for all their own outstanding creut currency
PREJUDICEs AND MISCONCEPTIONS.
In submitting those recommendations am not
unmindful OF the convictions preconceptions ana
pre1udices so widely prevalent among the people IN
much that relates TO our currency ana oann's
system It will at once appear to many that inc
p-oposal herein made to place In condiuonai le"io
ment the sum Of 500 100000 IN our legal tender
(greenback) Issues is discrimination ssA"s'
form of paper money which. under the i1huehco y,
n worthy sentiment has become to them symoo'
Of the unity and power Of the Nations life iitte
will LEAF a
n the contrary Of such an inference Bearing IN
mind the fundamental truth upon which THIS a'su'
ment rests namely. the necessity for renucuon III
the volume Of demand liabilities. now const'u'"is
a menace to the public Treasury 1t Is. ecohom.oA'N
speaking a matter Of indifference whether TINS TO
auc,,on be made in the volume Of silver silver cor
tincates, Treasury notes. greenpacKS or III syn,
agreed upon proportions OF each' ou' inc ms 49,
fact Is that It has been through the sreenoacA u.
only unaoyed credit note OF the Government 'n"'
the endless chain has been worked. ohce ois-
bursed, these notes find their way. py pu'ey
natural process to the banking centres. where III
case Of an outward movement OF goio. or because
OF any internal movement OF distrus'' 'hey "H'
been made a ready agency TO deplete inc soo re-
..rve in the public Treasury. The proposition 10
retire a largo portion Of these notes INTO an ssue
and redemption division. there TO be held until the
nubIic is willing TO offer for them In fair exchange
An equal sum Of gold Is proposiuoh 10 o's"'''
them with the honor Of actual gold eauiVhiehc'
when they ars passed out. as they haVe h''"ei'o
heen honored with actual gold eQuivaency when
nushea in upon the Treasury for redemption Iho
proposition is therefore quito different from
proposition to retire and destroy then' o' 'i'e
other hand the proposal to thus preserHe M
honor them win excite objections from ahotnsr
class who will alleys tina. the notes now IN a r
ron should be retired and utterly desuoyet tnsY
viii aver that so large sum. no matteI now nc.''
Mil Drove an irresistible temptation TO which Con
sress VIII yield when ncs d 'T for puSo expenditure
shall rest upon the Treasury and that ths re S.Ie
In considering this objection m, mps tort DC and md
mieded to as q determnative objection there IS
nothing whatever to prevent the awmakins pow ss
from sS4s notes at any 3, the uned States to
as Sosy s 4o Which, s asre
Neither must 1t be forgotten by such oojectors |
!sat use Do aHs bus d Dnans
uiory enactment or constitutions ptUni on ,n q,
scd s' has ;Dssi fssp'o T.cs a.
e5ssS ,s:; s"
S viii eyeT action The only real difference then
setween holding these Government notes in
s ssEEsr.ss gSch could at any be
by legislative action.
NOTE ISSUES BY NATIONAL BANKS
Tho important nature OF the subject under as
cussion tempts 10 q fuller treatment. must
howeyer. be content with referring once more TO
,ho, ,satur. OF this series OF recommendations /
which touches the question OF note isues by Ma
tional links moved 10 press the recon- /,
mendation submitted In view OF the following
considerations:
Paper money II tho product Of an Industrial.
commercial and financial evolution. Its econo-
Milling effect in the use OF metallic money precludes
the idea OF It's abandonment until aociety shall
relapse into anarchy.
Credit II the base upon which II rests. Paper
money Is the evidence that q thing OF value has
tnfo ha md hat
the holder OF that paper Is willing 10 await pay
ment When payment Is made the evidence OF tho
transaction should be withdrawn. to appear again
only when similar transaction occurs.
The bank Is an agency. the result also Of pure
evolutionary movement. whose function II Is TO
issue It's various forms Of credit instruments, OF
which paper money IL one. against tho pledges and
promises to II Of the less publicly known Members
Of the Industrial community. 1t thus becomes an
Intermediary in much tho larger part OF all trade
and industry
whatever operates to render tho bank a safe. eff
Client and available agency to tho people, operates
to tho general prosperity.
Tho requirement that tho bank shall invest its
capital in public securities a. a precedent to tho
issue OF It's credit instruments-paper money-is q
requirement which operates by SO much to reduce
its efficiency to commerce and industry 1t cannot
use its capital in two directions At the time
Only necessity TO control the banks capital for
the public use indispensable need for security
In such a form TO the notehoider can justify this
requirement
The exigencies Of the Governments finances In
,ss, induced Congress to require from all noeissu
ing banks preliminary investment OF their capital
~ tbo Government's bonds. The many disastrous
losses incurred by the people from the note issues
Of banks Of maey 80 40
rate States seemed to justify the National Govern;
ment in requiring from banks OF issue pledge OF
the bonds in trust for the security OF their note
holders. ,,.-,, 49,.
Without further extension OF the historical state
ment II is recognizable that the exigences OF the
Government do not now require the absorption OF
banking capital In aid Of Its own finances In fact,
with Treasury conditions once normally established
as TO revenue and expenditure. the funded debt Will.
within n few years. be entirely llquidated
The Importance OF banking in Its relation to In
dustrv and commerce demands for It, In view OF the