eived six thousand dollars in
coin as one year's advance interest upon its deposited bonds, under
the law of March 17, 1884. This coin, not being available for use as
money, was sold or converted into Treasury notes at a ratio of from
two to two and a half for one. The bank, therefore, had received, as a
working cash capital, a sum in excess of the money invested in its
bonds. The transaction stands as follows:

Invested in bonds $100,000
Received notes to issue $90,000
Received coin equal to, say 12,000--102,000
------
Bank gains by transaction $2,000

From this it will appear that the bank has the use, as currency, of
more than the amount of its bonds, while the government is to pay, in
addition, six per cent per annum on the full amount of bonds so long
as the relations thus created continue. Surely no argument is needed
to prove that, if the government had issued the $90,000 in the form
of Treasury notes, and had paid out the interest money for its current
obligations, there would have been no greater inflation of the
currency, a more uniform currency would have been maintained, and a
saving effected of the entire amount of interest paid on bonds held
for security of national bank notes, which at this date would amount
to a sum nearly representing the total bonded debt of the country.

But there remains a still more serious charge to be made against this
system. Defended as a war measure by which the banks were to aid the
government in conquering the rebellion, the fact remains that at the
date of Lee's surrender only about $100,000,000 of bonds had been
accepted by the banks, even though they received a bonus for the act.
But, after the war had closed, and the government was with one hand
contracting the volume of its own circulating notes by funding them
into interest-bearing bonds, the banks were allowed to inflate the
currency by the further issue of over $200,000,000 of their notes.
Time may produce a sophist cunning enough to devise an adequate
defence or apology for such legislation. His work will only be saved
from public indignation and rebuke when a continued series of outrages
shall have dulled the national intelligence and destroyed the national
honor.

But there came a time when the policy of the government was radically
changed. The soldiers had conquered a peace,--or tho