The Senator from Kentucky said aptly, that, if we wait until all are ready, we shall never resume. If the Senator from Indiana is right in saying that prices have already settled down in the expectation of an early resumption, then to my mind the battle is half won and we have only to proceed always in the right direction.
A simple redistribution of the existing currency cannot be made without serious consequences to the business of the country, while it will do nothing to correct the evils of our present financial condition. It will do nothing for Financial Reconstruction, nor will these consequences be confined to any geographical section. They will affect the South and West as well as the North and East. I need only add that disturbance in New York means disturbance everywhere in our country.
Nor is it easy to see how any redistribution can be made, which, however just to-day, may not be unjust to-morrow. As business develops and population extends there will be new demand, with new inequalities and new disturbances.
The original Banking Act[212] authorized a circulation of $300,000,000, a large part of which went to the Northern and Eastern States. All this was very natural; for at that time there was no demand at the South, and comparatively little at the West. With the supply of capital at the East banks were promptly formed, even before the State banks were permitted to come into the new system. Subsequently the State banks were not only permitted to come into the new system, but their circulation was taxed out of existence. Here, then, was banking capital idle. It was reasonable that the circulation which was not demanded in other parts of the country should be allotted to these banks. This I state in simple justice to these banks. I might remind you also of the patriotic service rendered by the banks of New York, Boston, and Philadelphia, which in 1861 furnished the means by which our forces were organized against the Rebellion. One hundred and fifty millions in gold were furnished by these banks, of which less than fifty millions were subsequently subscribed by the people;[213] and this was at a moment when the national securities had received a terrible shock. Not from the South, not from the West, did financial succor come at that time.
In considering briefly the questions presented by the pending measure I shall take them in their order. They are two: first, to enlarge the national bank currency; and, secondly, to create a system of free banking founded on coin notes. This leaves out of view the question of refunding and consolidating the national debt; nor does it touch the great question of specie payments.
I begin with the proposed enlargement of the currency. The object is excellent, as is admitted by all; but the practical question arises on the way it shall be done.
If you look at the bill now before the Senate, you will see that it authorizes an enlargement to the extent of $45,000,000, and the withdrawal to that amount of what are called three per cent. temporary loan certificates, of which little more than this amount exists. The extinction of this debt will accomplish an annual saving of about $1,366,000. So far, so good. This amount of $45,000,000 is allotted to banks organized in States and Territories having less than their proportion under the general Banking Act. This is right, and it removes to a certain extent objections successfully urged at the last session of Congress against a measure for the redistribution of currency.
But, plainly and obviously, the measure of relief proposed is not sufficient to meet the just demands of the South and West; nor is it sufficient to prevent taking from the North and East a portion of the currency now enjoyed by them. Therefore in one part of the country it will be inadequate, while in another it is unjust. Inadequacy and injustice are bad recommendations.
When a complete remedy is in our power, why propose a partial remedy? When a just remedy is in our power, why propose an unjust remedy? There is another question. I would ask also, Why unnecessarily disturb existing and well-settled channels of trade?—for such must be the effect of a new apportionment, as proposed, under the census of this year. Why not at once provide another source from which to draw the new supplies under the new apportionment? I open this subject with these inquiries, which to my mind answer themselves.