Year: 1866

Ah0 EFOpOFuOn tntaG eur currency


Bears to our GOId--!The National


Banks Should be Required to Keep


a Certain Per Cent. of their Gold In


terest.


From the Philadelphia AuleTtepI.


So much is continually said about the
irredeemable character of our paper
currency and the necessity of an early
resumption of specie payments, and the
national Administration is so manifest
ly using this hobby TO reach populari-
~ it has found inaccessible by any other
means, that we think it is clearly in
cumbent on Congress to takethe matter
in hand this winter, and place it upon
some safe and permanent basis, in the
same lnanner that the contraction of
the greenback currency was managed.
While the Secretary of the Treasury
keeps the national finances in a solvent
condition, and maintains solarge a coin
balance in the public vaults, there can
be no doubt as to the ability of the re-
public to give the greenbaclz currency
a specie basis at an early moment. I'm
der existing circumstances, if the Sec
retary were to announce his readiness
to pay out gold for greenbacks, he
would get rid of all his coin in an in
credibly short space of time, and then
ind himself as far away from the de-
sired haven of the specie basis as ever.
The reason ofthis Is that every national
bank note is payable in greenb3cks,
every compound interest note is legal
tender, and thus the whole volume for
which gold would be in demand would
be eight hundred and thirty-tive mil
lions of dollars, to meet which the
Treasury has ninety-three millions,
subject to drafts on twenty-five millions
of gold notes.


1t must be obvious that when the ma
uonaI treasury resumes specie pay
ments, the banks ought ali to be re-
quired to do the same thing, or else
there can be no permanent specie basis.
II the bank notes are never TO be re-
deemed in any other currency than
greenbacks, they ought all to be abol-
lShed; for the country, while it can
stand paper currency temporarily ir-
redeerable in specie, cannot tolerate
one permanently so, and least of all
currency issued by private institutions.
We take it for granted that no one CON
templates resumption by the Govern
ment and not by the banks, and vet
when Welook at the elaborate and care
full preparations of the former for re-
sumption, and find on the part of the
latter n total absence OF eny prepara-
tions Whatever, at the same time that n
great clamor is kept up to induce the
Government to resume, we are inclined
to doubt the sincerity or the sense of
those who make this noise.


Three hundred millions of national
bank currency are authorized by law,
and nearly the whole amount is now in
circulation. The banks issuing these
notes seem to assume that because the
law makes their notes redeemabIe in
greenbacks, on account of the suspeu-
sion OF specie payments, they are new
er to pay out specie again, and have no
further occasion Cor it. The New York
city banks, with thirty millions three
hIn6 rad and @ ~ 4 4
lars of their own notes in circulation,
have only fifteen millions two hundred
and two thousand dollars in gold and
gold notes, or less than half enough to
redeem their currency in specie. The
Philadelphia banks have only eight
hundred and ninety-three thousand of
specie to redeem nine millions eight
hundred and fifty-one thousand dol
lars OF circulation; and so the matter
stands all over the country, the banks
being everywhere entirely too weak to
stand the test OF resumption of specie
payments, though they stand compla-
Gently and say nothing while all this
clamor continues against an irredeem-
able currency and in favor of specie
payments. Doubtless most of these in
stitutions feel satisfied that they do
their duty in keeping the required re-
serve of greenbacks, and so they do if
resumption is never to take place; but
"a tue 6ONSEuuleut Is 10 pay out specie
for its own notes, and these banks are
to redeem their notes in government
paper, the process must be an exhaus-
tive one continually for the govern
ment, while to the banks it is attended
with no risk at all.


For this there is a remedy that should
be applied by Congress. A law should
be enacted providing that these banks
should retain in their vaults certain
minimum per centage of the gold re-
ceived by them from the government
for interest on the gold bearing bonds
deposited in the Treasury as securities
under the national banking laws. At
present the. banks sell every dollar of
this interest as soon as it is paid to
TO them, and the profits go to swell the
dividends paid to their stockholders.
By compelling them to retain portion
OF this gold, areserve would soon be
accumulated sufficient to warrant prep
arations for resumption. But the time
of resumption should be exactly calcu
lated and fixed by law, as it could very
easily be If certain requirements of this
kind were made. If the contraction of
the greenbacks should reduce their vol
ume to three hundred millions, with
the compounds and fractional notes ex-
tinguished, about half the amount
would be in bank and government
vaults, and with hundred millions of
gold on hand the government could re-
sumo if the baULyS vvara Taad "