The Montgomery advertiser., 1901-07-16

WIuc iu CtFSulAtihk uOtcg. Auey Wcrc purchasabie then at 50 cents on the dollar, but as soon as this vast market was made for them, they ap- preciated until they reached par and went above par, That resusoitated and sustained the credit of the Feders1 Government, and was more potential in giving to 1t success in putting down the Confederacy than were the Federal guns at Gettysburg. 1t was the one stroke of all in the war that prostrated the Confederacy.
 Mir. waiker--Is 1t the purpose of your amendment to allow the establishment of State banks not upon specie pay ments?
 MT. oates--I will explain that. At the close of the war these National Banks had in circulation about $75.000.- 900. They expected to get much more. The system was intended for commer- cial purposes. It never had the neces- sary elasticity. It was simply intended to create a market for the bonds of the Federal Goverpment. but they con- ceived the idea that they might extend It's circulation to a vast amount, and this purpose was declared at the time the Federal policy was declared with Treasury, to retire nearly all the green backs, which was over s6o0,o0o,0 900. When that policy began, 1t was under stood that they would all be retired, and that there would be . necessity for a greater volume of paper money, and then the National Banks, desiring to supply that demand, brought influence to bear on Ccngrss which imposed on the State Banks a 10 per cent tax, which they knew the State banks could not survive. It was tantamount to saying that no State bank should issue these notes, although 1t had been decided more than fifty years before in the Kentucky case that the States had a right to have banks of issue and 1t went on to discuss that at greater length than I have time to refer to. That was the object and purpose of that 10 per cent. tax and 1t completely squelched the State banks, as much so as if the Congress of the United States had had the power and had passed an act declaring that no State should have any such banks. It taxed the State banks out of existence. Now the question of the repeal or mod ification of that tax is not settled. It is the only reminder of the acts of the
 Federal Government In robbing the States of the rights thay had under the Constitution which still remains in full force and I trust the day Is not far distant when men will be in the Congress who will see the injustice of 1t and repeal or modify that odious tax.
 Now should that be done before this Constitution ceases to be the organic law of Alabama, we may want to avail ourselves of 1t. This amendment Is not obligatory but 1t provides that banks may be created as banks of issue with
 A4A Aa into specie at their face value. wheth- CT of the United States. the State of Alabama. or any county or city, an equal amount dollar for dollar with the Issue of such bank or banks, with the power in the depository on the fall ure any time of any bank to redeem its bills in specie to sell and con- vert those bonds into sufficient amount to redeem them. Other parts of this ordinance requires that every bank shall redeem It's bills in specie on demand. I want that to be in op- eratiun, but at the same time 1t IS per fectly practicable to incorporate this and let it remain so as to be of use should the time come. as I hope 1t may when you can broaden your basis of circulation with perfect security and make bonds which are convertible into specie the source and basis of bank ing and will add to your circulation on as safe basis as the national bank ing system. I think 1t would be of such elasticity as to furnish the State with what money Is needed It will expand and contract according to the demand and wiil add to our internal wealth.
 Mr. Robinson--Is there any provision In the Constitution which prevents the fttra from d0inQ this?
 Mr. Oates-When you adopt this other provision you can do 1t?
 Mr. RObinson--What Section do you refer to?
 MT. Oates-The Section which de- clares that no bank shall be estab- lishsd except on a specie basis. want to make it on a bond basis con- vertible into specie.
 Mir. Walker-Does the gentleman con- strue the provision as contained in this Section as anything more than requirement that any bank shall meet It's notes on demand in specie.
 Mir. Oates-No bank can be estab- lished except on specie basis.
 Mir. Walker-But Is not the extent of that requirement. that 1t shall meet it's notes In specie on demand?
 MT. Oates-But am inclined to think you had better have more room for the establishment of such system If you can get 1t. It does not do any harm but leaves 1t to the Legislature to put it in force.
 MT. Fletcher-We had hoped that this would be one Article which would escape the pruning knife that has been so freely used in this Convention. The distinguished gentleman from Mont gomery for many years in Congress en- deavored to have this tax on State banks repealed. but 1t was not done. As long as that tax remains we are hampering the Constitution and ac- complaining no purpose. We think the Legislature is perfectly competent and If at any time this law imposing the tax is repealed the Legislature can take the necessary action relative to State banks. l can see no purpose or object or anything this amendment accomp- fishes and l therefore move to lay 1t on the table.
 A vote being taken, by 3S ayes to 50 noes. the House refused to table the amendment.
 Mf. Oates-I now move the previous question on my amendment to this Sec tioL.
 A reading of the amendment was called for and 1t was read as follows:
 Amend Section 2 of Article XIV. by adding the following: Provided, that any bank may be established with au- thority to issue bills to circulate as money in equal amount to the face value of bonds of the United States or of this county or city
 MT. Coleman (Greene)-A circulation haSed On citV and cOuntV hondR2