Year: 1878

crats have no hesitation in accepting the
ground occupied by the Greenbackers. as to
the desirability OF abolshing the National
banks and substituting Government notes
for their issues. This is, perhaps, the most
important of the subordinate questions in
volyed IN the general currency problem.
While it does not directly affect the prin-
ciple of resumption or the maintenance Of
specie payments, it has bearing of no
small importance on its practical operation.
To double the volume of grecntacks by a
withdrawal of the bank notes would be TO
increase in like proportion the task of the
Government in maintaining resumption, ne
cessitate the accumulation of a much larger
fund of coin by the Treasury and make more
difficult, and probably more remote, the ac-
tual accomplishment Of specie payments in
any genuine sense of the term. On the
other hand, it will be generally admitted
that the banks are able and willing to take
care of themselves and fulfil all their obliga-
tions On a coin basis if the Government will
simply look cut properly for its own notes.
But matter of still greater consequence is
the evident purpose in this movement against
the banking system, to have the notes of the
Government established as perpetual legal
tender and permanent form Of currency,
resting only on the credit Of the nation,
without specific security for conversion
or definite obligation TO make final
payment.


What the Greenbackers and the Demo
Gratis clamor for is q currency consisting
merely of the Governments promises, with
out any definite obligation to pay. or any
security for conversion into coin on demand.
The opposition to the National banks is ex-
pressed chiefly in vague denunciations of
monCpolists and money-lenders, and the as
sertion that they make undue profits from
the privileges of circulation, which might
be saved to the people if the Government
furnished the currency. A statement read
before the Bankers Convention, at Saratoga,
shows clearly how little ground there is for
this insane cry. The bank corporations, as
the business is now distributed, are COM
paratively small associations, and the heavy
stockholders are very few. The shares are,
for the most part, held by people of moder-
ate means, who wish to put what they have
into an investment which will insure them a
fair annuity. More is paid out in taxes
than is received in interest on the Govern
ment bonds pledged as secured for circulat-
ing notes, and the profits Of the business are
not, and in the nature of things cannot be,
in excess Of those obtained by the equally
prudent use of like amount Of capital in
any other way. With banking free to all
owners of capital, and shares in the associa-
tion open to all purchasers who have money
to invest, competition very speedily equalizes
the profits to those that could be obtained
by any other employment of capital and of
skill in the conduct of business.


Among the shallow criticisms which are
constantly reaching us, il one to the effect
that the Government lends the notes, or the
money, as it is usually expressed, 10 the
banks, whereas there is no more reason why
it should furnish them with funds to make n
profit from than ANYBODY else. This would
be too silly for potice were it not for the fact
that so many people hayc vague and con-
fused ideas as to what the bank notes are.
The Government furnishes no money and
lends no notes to banking associations. 1t
merel prints the blanks for the notes for
the sake of securing uniformity and being
able to prevent counterieiting. and the slight
expense Of this process Is reimbursed by the
| per cent tax on circulation. These blanks
become notes only when they are signed and
issued by the officers Of the bank receiving
them, and then they rest on the credit OF he
institution, and are made good by itI resour-
ces. The bank is bound to redeem them,
and though in case of its failure to do so the
Government takes them up, it holds assets
of the bank for the purpose in the shape
of bonds deposited with the treasury
before the notes are furnished. Again,
it is urged that the public pays for
getting the notes into circulation in the di'
count on bank loans, which would be avoid
ed by direct issue by the Government.
We have seen this expense reckoned up into
enormous figures. But it must be remem-
bered that the notes, when issued, represent
actual capital embarked in the banking brsi-
ness, and are backed by assets. The bank
loans its own credit, which it has been
obliged to secure in the amplest manner.
There is no charge paid by the public in its
borrowing capacity, which would not fall
upon it if the loan were made in any other
form Ii is impossible TO trace in the leglti-
mate discount of banks any expense to be
credited to the people as an item OF cost in
maintaining the bank circulation.


The errors and misconceptions on the sub
ject are innumerabic. When they are
cleared away, most of the objections urged
against the National bank system disappear.
The opposition is in TACT only disguise to
cover the real design of its promoters, which
is to put another obstacle in the way OF a
return to specie payments. With the
banks in existence the process is compara-
lively easy, and promises to be permanent,
provided the Government is held to the poll
cy of redeeming its notes.-N. Y. Times.