Year: 1868

vi al lhe DdhhS as IetufHeu january, ISUS
amounted to $685., 100000, nearly twice the
par value OF the bonds, which composed their
capital. One of the returns of a bank in this
city during the war showed loans amounting
TO four times its capital. From these statis
ties it is reasonable to assume, that a bank
can and may safely loan an amount equal to
twice its capital. Now let us suppose bank
with capital of S500,000 paid in. 1t pur-
chases OF the government, bonds amounting
TO 100000 and receives in exchange for the
bonds S500,000 in United States treasury
notes; by the deposits which it attracts, it
becomes able to loan this sum twice over at
7per cent. amounting to $4,000. Let us
suppose its annual expense for rent, officers,
&c, to be $4,000 and it has $4,000 to dis
tribute to its stockholders This is exclusive
OF the commissions it may receive as finan-
ciai agent OF the government, and Of any bonus
it may earn in the sale of government bonds.
Ii the present banks with all their fixtures
good will. capital and experience do no,
choose TO undertake this business, let them
give notice accordingly, and other men win be
ready to assume it. 4... -..r-


The change from a bank currency TO a
greeabdck currency aejU be resisted by q
combination of sisteeR hundred banks repre-
seating capital of S400O00,OOO and the best
talent aud strongest influence in the country.
and aeiu hare a most disastrous eject upou
business. Undoubtedly the banks, which have
continued to receive an interest of never less
than per cent. Of what they loaned the gov
ernment, will desire to continue to receive it,
Notwithstanding they have received payment
of the loan itself, in what they have most
adyantageously used as money. No doubt
they will make most plausible statements
that without such advantage they cannot
sustain themselves, and they may even
threaten to use their power to disarrange
business. Every monopoly is tenacious OF its
unequal advantages. But if Congress listens
calmly to such complaints, considers them
fully, and then settles the financial problem
in just regard of the rights of all the people,
it is an imputation upon the intelligence and
the patriotism of the stockholders and banks
to insinuate that they will not acquiesce.
No citizens are more interested than they
in the revival of business, the diminution OF
taxation, and the establishment of the ma
tional credit. While profiting temporarily
from the financial difficulties of the govern
ment, what they expect and demand is, pro
lection in the pursuit of legitimate and
useful business, and fair distribution OF
wealth to the capital that acquired it and the
labor that increased it. 'l'l' -.. .-


Mr.. Pike in the article already quoted from
says: "1he treasury note can neoer act as a
substitute for the bank bill in ordinary times,
unless the treasury turns td1lker, and sells
its greenbacks for the same kind of securi-
ties7that the bank takes for its notes"
30 There is not the slightest need of the treas
ury turning banker, any more than because
it coins the metallic currency it needs to make
all the payments that are made with coin. 1t
will sell its currency Just as it has sold its
revenue stamps, and its postal currency.
Does it follow, because the government fur
nishes and redeems the fractional currency,
that it must do all the small trade, by which
it is distributed to the people? 1t is the first
condition Of lending money, that man
onOulu udfC IL W iCuus II q uldil hliuo tDdt
ten per cent. can be made by leaning money,
he will loan bis own; it he has none he will
buy it of those that have it to sell and do not
wish to loan, and pay Tor il with what they
will receive as an equivalent. The demand
notes Of the government are distributed to
the people at the rate of several hundred
millions year in the expenditures of the



government; if that does not supply all the
money needed, those that want more, will
buy it il they can make anything by it, and
pay in bonds which are in abundant supply
at reasonable rates. Hl .lL


Why complieate the financial difficulties
| 6y setting the banking capital, in hostility
| to the government?


Because the establishment of specie pay
ments is the vital and indispensable method
| of entering upon cure Of the present finan-
! cial difficulties. The banks are compelled by
| their constitution TO stand as the chief him
| drance to specie payments. The United
States have outstanding about s340, 100000 of
| demand notes. The banks have out about
| S300,000,000. Nominally they are all due in
| coin. There is in the country but about
| $500 GOO 900 OF coin as estimated, not enough
to redeem half this amount. If there were
but one debtor liable to pay, either the banks
or the government, then after the presentation
| of S50,O00,000 or thereabouts the clauior for
| specie would subsde, and the currency would
he held and used as equally good with gold.
| While the government and banks were alike
| insolvent there was no competition between
| them; the moment one begins to pay the 9TH
| er antagonizes it.. Let the treasury begin to
pay CON tomorrow, and the banks, which
already hold 8 $150,OO0,000 to S1S0,O00,O00 of
greenbacks would begin to gather in all the
rest in circulation, and knowing that their turn
to pay had come, as matter Of seli-presarya-
ton as well as to drive the government back
to its old insolvency, would begin to draw
with their greenbacks all the coin from the
treasury. Until the United States make
some treaty with the banks, or better still till
they either assume or surrender this divided
empire of issuing the paper currency of the
country, specie payments and their attend
ant benefits are impossible.


To PAY THE NATIONAL DEBT.


Upon this topic after the points already
discussed but word or two need be said
No theory is insisted upon that a national
debt is a national blessing. All debt is a mis-
fortune whether it rests upon an individual
or a nation.


But people should discuss the question oil
paying their aggregate upon the prudential
considerations pertinent to an individual debt
If a man can earn G per cent. with money and
can borrow it at 3 per cent. it is matter OF
prudence to remain in debt. SO II the United
States can fund its whole debt at an average
of 3 per cent and the tax-paying people can
increase their aggregate wealth 6per cent.
per annum by Withholding payment. then it
is prudent to remain in debt


One thing ought to be provided that
within fifty years one and a half million dol
lars of the principal OF the national debt
should not be paid, so as to have that am
cunt as a basis for the yearly increasing bank
ing capital OF the country.


With the debt laced as in just rate of in
telest, that amount of it not embodied in de-
mand notes, may be paid from the increased
revenues by which the revived commerce ana
industry of the country are sure to exceed
the estimates.