Year: 1867




e. tb Asoo ooO nOO Of National bank notes 1t Is one
80 the numerous significant commentaries upon 'he
rD,visson NJ leaving the subject OF the amount anu
tharao,ar Of the circulating medium to be panuou
ahaut IN that body. The politics OF the country ao
aIsturhing element in finance and business o'o-
Ubsn confined to their proper spheres but 70 nav
than made the axle and pivot on when U"uo w alla
commerce and industry trn. is to lnfet '0
mischief possible upon commerelai "uu N"O'is
people. ., bonL;D, .vstoro.


Hsre. now Is our new National banking system;
IA snon0h No doubt but it exists, and is already
Ilo,I,, ;ntaryoven with the business interests OF
,1s neonla II las been urged through, fought
tLronh ovar the dead bodies of the State banks. IL
Ia. not been fully under way 60 days. The treasury
Danartment is barely through with furnishing the
lhree hundred millions of notes to which the issues
NJ those banks are limited. And now comes an eager
proposal to overturn the whole system by recalling
thesa three hundred millions and substituting green
backs in their stead


The promoters of this scheme seem to have just dis
covered that the National banks are banking at the
expensesof the Treasury Why, this was the sound,
original objection to the first proposal to establish the
svstam II was the complete answer to ii, and the
one which if it had beennteligenty adhered to and
insIsted upOn would have given the profits OF the
three hundred millions of circulation OF the National
banks 10 the Treasury Itwas the clear policy of the
to have taxed the circulation of the state
banks temporarily out of existence, and they would
willingly have submitted to the process in the eXgen
cies of the hour The Government needed and should
have had the field to itself II only necessary to
have said TO the State banks Necessity rules and
this privilege we now recall shall be restored to you
tho instant the eKigency Is over mat was the tne
TO have given the TreaSurythe benefit OF the pr0po-
sitiOn now urged. 1t was ten times more important
6sa sSs@ sdS n0% action If g had taken
possession ofhe channels of circulation by suppress
ing all bank-note circulation as u nhght easily naEe
aflOat Suppose that were the case, and we had the
old State banks in existence or SO many OF thep as
the war would have left after being shOTn OF their
powers of issue. do we not see how immeasurably
better financial sitnatiOa would now be than 1t
isl Eager to resume then old privileges as banks OF
ISSUE they would all have been to-day ready 10 do 1T
on the condition of specie payments. Every one
would be on the tide of resumption, and so would
the great body of their custOmeTSand the pubc for
the reason that resumption IN such a case would DO
bank expansion. How different Is the actual state
of the case. Nearly every National Bank expanded
to the failing point and every one Twin 01 course
honorable exceptOns) is opposed to any contraction
of the facilities by which they are ali earning from
IL to "a per cent per annum The whole National
Bank system is at this moment a gigantic
obstruction to an approach to specie payments But
while this is the case, II Will not improve thlngS 70
simply exchange their notes for greenbacks. This Is
not what is wanted to get back to specie payments:
Such process of exchange would only make Dad
matter worse And Tor tins reason It Moulo 10 de le
bank facilities whatever, based on bank issues
Unless it is proposed 10 establish permanently the
business of the country the rotten foundations OF
irredeemable Government paper money, what IS now
needed above all things is to redeem the gTeenbacks
and get them out of the way and let their place be
taken by coin or hOtes of specepaying bank There
il an idea that keep gTeenbacks IN circulation
after resumption of specie payments sufficient for the
business wants of the country Never was there
greater This is impossible unless the Govern
meut turns banker and issues Its notes for mercantile
paper. In other way can it keepfhem out or sup
ply the necessities OF trade and commerce. Ihls OF
1t will not do Thus its issues of paper will DC
confined TO its disbursements which Will often be
where money is not wanted, when II IA not waited,
and in either too great too small for business
requirements. Then the aggregate annual supply,
even il it could be judiciously distributed would be
totally inadequate to the wants of the community


The upshot OF the experiment would be that the


greepbacks would be returned much faster than they


could be issued, and the country would find itsen


transaeting It's Whoie business not Vhiy On a con


basis, but actually With com circulation mainly


Hard money men would have no objection 10 this


But such process is not TO give the country the


benetitSo paper currency which feels II requires


but to rob it of those benefits.


So much. then, for the proposition to substitute


greenbacks for the notes of the banks, while are


trying 10 find our way back to specie payments
Such an exchange would only be lundrauce, as Il
would DO a means OF increasing the mercantile
pressure approached that goal, for the
now gwen.


For good or for evil then. the existing banking
system will stand for the present without material
modification because il will be seen that il would be
highly Injurious TO the business interests of the


try to disturb it, Indeed the idea of oversetting il in
fundamental particular just ut the moment it is
fairly afloat win not bear respectful Characterization
But one thing Congress might do, and ought 70 do
Ii ought to force the banks 10 redemption of their
notes at some central point central points 1t lisa
subject of difficulty we know but not impTactcabe:
No measure would do more to insure a healthful
action i'll the channels of circulation thaA this, and
~ more needfHl. AT present the bank crcula-
tiOn is perfect Dead Sea. 1t is Shiny from stagna
ti0a Banks issue their quota Of notes and never
them afterward Being never called upon 10 redeem,
they never hod.thenselves in readiness to redeem.
Nothing breeds unsound banking like this. A law
cOus iliug interior banks to provide for their cirCu-
latio a commercial centers, would drain these stag
maui iafps OF paper money and create something like
hesit' current: This step is really essential and
upon by selfish hostility of the banks, will not bo
kept fro advancing this little way in the right
direction Congress would take great stride in the
same Coz 8 il il would adopt suggestion which has
been mltt. and prohibit or essentially limit, bank
diYdonds until specie payments are resumed. SO
long the banksare permitted 10 divide sums vary
ing from i2 TO y per cent among their stockholders
annually as the results OF their paper issues and kite
flying operations. il is not difficult to perceive what
obstinate enemies OF resumption they will be. If they
were prohibited from using their enormous profits
either in the way OF loans OF dividends they would
soon be forced out of their hostile position


Though the indications IN Congress ere that that
body is resiye under the policy of contraction il is
nevertheless committed to that policy by the proceed
ings of the last session And it cannot escape this
c0mnittal. Ii is not likely majority could he got
to reverse this action. but il il could, the Treasury
Deparmentsand the veto power would probably fTuS-
tTate the attempt


IL we may not count on Congress Immediately
moving further the direct line of resumption, we
may YET entertain the hope that that body will grl-
dually come TO the light the whole subject, and
push forward in some of the directions indicated.
IL Congress viii only convince itself thoroughly of
the fact that we hayonot TO come TO, hut that
already in money crisis q crisis precpitated by
events not subject to control crisis the country
must face, and through which 1t must pass,
they Will not be far from reaching the conclusion that
the we through with it the better. There
has been pluck enough and endurance enough TO fight
the country through horrible war; and to abandon
the attempt to do ii peace principles. IL fan