introduced into the West and South, and a larger amount of circulating medium is to be made available for legitimate business, is the establishment of a greater number of national banks of issue. The complaint is that the Eastern States have an undue amount of national-bank circulation, and therefore enjoy in a measure a monopoly. I admit this to be true. I will not discuss here the system of banking in all its aspects, but I will inquire how far the establishment of more national banks of issue in the West and South will remedy the real evil complained of—which evil consists in a lack of loanable capital there. If the remedy proposed is to serve any good purpose at all, then the establishment of new national banks of issue must increase the available amount of loanable money. If it does not do that, it renders scarcely a service worth mentioning. Now, will it do that? The Senator from Indiana, who is always ready with his answers, says yes; that it will increase the amount of loanable money by the amount of bank-currency put out; for, he argues, the currency issued will be given out in loans and discounts which every thirty, sixty or ninety days will return to the banks. The currency will, therefore, stay where it is issued, and not flow East. Is this sound? I assert that it is fallacious in the highest degree. The Senator simply forgets to tell us how those new banks are to get their issues.
Let us look at the provisions of the national banking act. It provides that, in order to establish a national bank, United States bonds must be deposited in the Treasury of the United States, and that 90 per cent. of the nominal amount of those bonds may be issued by the national bank as currency.
Now, in the first place, those who want to establish a national bank will have to deposit the bonds. It is a notorious fact that in the West the amount of United
