e could possess; whereas under like circumstances,
in former times, when banks under the State laws could practically
issue as many notes as they chose, much of it would have been left
worthless and the remainder depreciated. But our currency system is
defective in one essential particular: it is not elastic. It is, so
to speak, hide-bound at seven hundred and ten millions of paper,
exclusive of fractional currency, three hundred and fifty-six millions
of which are legal-tender notes, and three hundred and fifty-four
millions National bank-notes. The safety-valve of a country's
circulating medium is its elasticity, and the sooner Congress
authorizes free National banking on the present basis of ninety per
cent. of currency to the par of United States bonds deposited with the
Treasury, or devises some other means of affording relief, the better
for the interests of the nation. The law requiring the banks in the
large cities to keep always on hand a reserve in greenbacks equal to
twenty-five per cent. of their deposits and circulation, and those in
the country a reserve of fifteen per cent., should also be amended,
the percentage being too high by one-half. It is for the interest
of every bank to keep a reserve adequate to its own requirements and
safety, and the existing restriction instead of being an element of
strength is a source of weakness. Then, again, as National
bank-notes are guaranteed by a pledge of United States bonds at the
before-mentioned rate of ninety per cent. of notes to the par of the
former, the banks ought not to be required to redeem their own notes
in greenbacks on demand; and each bank should be allowed to count the
notes of other banks--but not its own nor specie, except on a specie
basis--as a portion of its reserve. To require the banks to redeem
their notes with legal tenders, on presentation, when there are only
two millions more of the latter than of the former in circulation,
is to demand of them what they would find it impossible to do in the
remote but nevertheless possible contingency of the bank currency,
or any large portion of it, being simultaneously presented for
redemption.

As a measure looking to the resumption of specie payments, however,
it would be well to abolish the National bank circulation altogether.
This could be done by Congress authorizing the Treasury--through an
amendment to the Bank act--to replace the National bank-notes with new
greenbacks, and cancel an equiva