Year: 1870




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OS OuR BANKING IEsrIIvIIoHs, sfo., coEslDsRsD.


1t may be well to examine few more Of
the prominent objections which will be urg.
ed against the adoption Of the Safety Fund.
Our banking institutions viii probably COM
plain that its establishment will infringe the
chartered rights granted to them by the
States. But in instituting the Safety
Fund, the General Government will not
withdraw their charters, nor pass any law
preventing them from banking. Doubtless
it has the right to prohibit the issue Of such
bills of credit as bank notes but this will
not be necessary. The Government viii
simply provide q means whereby the people
in every section Of the country can obtain a
fair representative Of their productive land
ed estate, at one and one-tenth per cent. in
terest, instead of being compelled to pro-
cure from banks and individuals an imper-
feet and unsafe representative Of their
property, and at six, seven, or eight per
cent. interest as much for the use Of q
representative as the crops Of their land are
worth.


1t is frequent remark that legal enact
ments have no more effect upon the value Of
money than upon the price Of wheat, and
that competition in lending money will
equitably regulate the rate of interest. By
establishing the Safety Fund to lend money
at one and one-tenth per cent to all who
offer the required security, and not interfer-
ing with the chartered privileges Of the
banks, we shall ascertain whether legal en-
actments have any power, and the advo-
Gates Of regulating the rate Of interest by
competition among the lenders Of money,
will also have an opportunity to test the
correctness Of their opinions.


Banks will object that they do business
on a specie basis, and the Safety Fund on a
land basis. 1t may be difficult to show
that the former is better than the latter for
all kinds Of money must be as useless
without land and products to be exchanged,
as yard-sticks with nothing to be measured.
1t will be fair towards the mechanics, and
merchants, for the Government to institute
a paper currency, and equally fair towards
the banks for their bank-notes are no
more legally payable in specie than the in
dorsed and other notes, and even the book
accounts Of private citizens. If the Safety
Fund money will be safe medium of ex-
change for products, it will be Just equiv
alent to pay debts to banks, because the
stockholders can buy products or land with
it; therefore the issue Of tender based on
landed estate cannot do injustice to our
banking institutions


The Safety Fund money being made the
legal tender, the banks cannot refuse to re-
ceive it IN payment Of debts. They can
easily and safely collect In their dues, with
draw their circulation, and wind up their
business without causing a scarcity of money,
or any panic in the money market. We
shall then have nothing circulating as money
which is not legal tender. If the banks
shall still deem their specie more valuable
than the paper money of the Safety Fund:
and in closing up their business shall not
have as much specie to divide among the
stockholders as they originally paid in, or
If they shall have to pay tae whole capital
stock in Safety Fund money, still no inius-
tice will be done to them, for the law max
ing paper money tender in payment Of
debts; gives to it value equal to that pos
sessed by gold and silver money regulated
at the same rate of interest. Wlile the
establishment Of the Safety Fund can do no
wrong to the banks, it will greatly benefit
those engaged in production and distribu-
ton.


Believers in the great intrinsic value Of
gold and silver coins, have nothing to ap-