Year: 1869

TREASURY POLICY-..FRHE BANKING
To THE EDITOR OF THE HERALD:-


Much has been sald and written about our na-
tonal free banking system, and as 1t was urged by
the Treasury at our suggestion instgation and as
sistance may posaioly throw some light upon its
parturtion and obiects which may somewhat assist
IN forming an opinion upon It's services and merits
This communication Is suggested by the worry ane
and practicable report OF tne Commissioner OF the
Currency.


This ocer Is entitled to the respect aud thanks OF
every sound thinker and patriotic man for the In
dependent position he has taken In favor OF this
system.


When the late war was inaugurated 1t was appar.
ent that 1t must bc an expensive and tedious con-


ct and therefore that the base Of our public credit
must be laid deep and broad to sustain the mighty
fabric that necessity and integrity shouid build
upon 1t during the desperate struggles and the still
more pernous peace that would follow. We say peril
GUS, for had not credit been organized, as we
now md It, the most disastrous consequences to our
integrity would have followed


The free banking law was suggested, not because
OF any doubt Of the solv0ncy our banks or to Sc
cure sounder credit for our banks were generally
organized under similar state laws, but we were IN
need OF takers OF our bonds, and the only large
patriotic capitalists we had were the State banks.
twas therefore apparent that this great Interest
must be firmly secured The mere purchase by these
institutions would not make them permanent
holders. and therefore we could not depend upon
their cooperation II their pasrotlsm should COOL
And then II was deemed important 10 so place and
fasten the public to the plain everyday OF the
debt aS to prevent any dishonest demagogue from se
ducDg the people from their integrity By the cry OF
reputation. This national system OF free banking
sprang from wise combination OF use aud safety.
IL made market for our bonds that was the means
OF sustaining under large expenditure.
Nearly all State banks organized under this law
and purchased bonds from the government. Many
new banks were also organized under It, ana had
spread themselves over all the Eastern, Northern
and Western States. Thus all bank notes are the re-
representatives. Of our bonds, and these bonds are
locked up IN the Treasury. Couid there be more
wise, prudential, patriotic or successful system
introducedS The system was not new, but its ap-
pcation TO the exigencles Of the times was fellct-
GUS and worthy of commentator.


To encourage our people to invest In these
banks many inducements besides patriotism
were offered and accepted. But there is no
evidence on record that the government
could have done any better through any other
channel with their bonds. Thus 1t must be ap-
parent that these Institutions fairly entitled to
all they have received from the government They
did not seek ask Tor the passage Of the laws
Ihey were invited solicited, and by tax upon
their issues were forced In under ,he law. This
law was not made 9 special monopoly, but q free
banking law. IL had been In successful operation
In the state OF New York since IS3S-free to ali VINO
would organize under it and deposit In the State
Treasury such security as the law required for the
0lils issued. No excess Of currency was issued.
Every city, village and town was at liberty to raise
money, purchase bends, and do a banking business.
This was free banking, and was perfect success.
his success was well known 20 Congress when they
enacted tine National Free Banking law, and 'all
went merry marriage beIl' until the stupid ana
lnc0nsistent mistake" was made, and by universal
acclaim, and In direct conflict Win the facts OF the
Case cry was rasei that our coined paper had de-
preclated In value IN consequence OF
No one could assign fact or reason for tnls
opinion except sucn as was drawn from ola. musty
books that did not apply to The We asked the
question, How can we say there Is roo much coined
paper bank credit when the rate OF interest for
TINS paper aud TINS credit Is from seven to twenty
four per centf How can we measure the quantity
necessary for the public use If not by the price
this was answered Look at the premium on gold.
We answered, and now the secretary admits tnat 1t
Is the foreign demand produced by our foreign
debt, that makes the premium on gold. This Is tue
senseiess unreasonng tnat became current, and
under this strange but mischievous haiucmatlon
Congress stuitihed itself by making our great
national free banking law unat had aided aa
army in the neld had aone) q monopoly. Yes a
monopoly, and cblefy for the benefit OF the Eastern
States Ins Is to-day the condition OF Congressional
knowledge and legislation the national iree
banking law. Can folly or ignorance do more than
thSY


Ten TO twenty-five per cent per annum Is offered
IN open market for the use oi money, ana our wise
legislators cry out contraction, Inlatlon depreca
tion, but give no reason. Perhaps they are III the
condition OF FaIstan when lie robbed the merchants
Gadshlll-.'He would not give reason COM
puslon II they were as thick as EiacKberries.D We
Oner Iou the test anu ask yOu Is not TINS rate Of
interest an evidence OF a great want OF more bank
creditsa II this Is not evidence. what Will satisfy
youf II this Is not a monopoly iOr tue benefit OF
few at the expense OF the many, then what Is II
Why do the farming, manufacturing and mercantile
interests take these credits in exchange for their
own at this ngn rate OF interest II this healthy
trader Can any honest farmer or other producer
pay such rates OF interest ana suceeedf Would you
trust man with your properly II you knew he was
paying sucn o rate Of lnterestf WHAT is the
remedy More banks or bankruptcy. You have
voted and still vote to rob the farmer aua the fair
trader Dy your destruction OF freedom IN banking
"0h, wise and virtuous Congress-


JONATHAN 0LDBUCk.