Iowa capitol reporter. [volume] (Iowa City, Iowa) 1841-1855, 1848-05-24
From the Detroit Free Press.
Glaip Banks.

should feel that we had not discharged oul
duty, as public journalists, if we did moi
warn the community, especially the indus.
trial masses, against The worthless note.
Of the Ohio State BanE and its branches
The first erro,esYS- impression to b.
removed, is one very prevalent, that its
branches is what it name would seem te
indicate, the properly Of the State. Such
is not the case, theState having no inter-
est in 1t, and being in no way or shape
responsible for. the issues of the banks
beyond Board of control, who are Of lit
tie use, under the law by which they
act.
There are three inds ofbanls in Ohio,
first, are some seva or eight Of the old
IS, all the rest haze filed; second, are
what are called themdependen banks, the
third, the State Bnk of Ohio, and its
branches. These Two last casses were
created by general llws in 1915, Of course
by wing Legislature. The Independent
Banks are required to keep deposit Of
State stock to nerly if rot quite, the
amount of their Observation-Disclosures are
but 10 of these Banks and from the fact
that their notes ar, good at home, we see
but very few of thin in this State. The
next class, is entirely composed of the
State Bank and branches of which there
were in January last, l;how many there
have sprung up snce that time, we have
no means at preset of knowing, but from
the fact, that it requires 7ery little CAPT
tai and a comparative snail expense, to
set those swindlins shops in motion, and
that from II in lS47 ,incras ed to 81 in '48,
or nearly 100 per cent, it may be fair to
increase the list t, "a new, only ole a
month. That our reader, may Judge OF
the real strength d these banks, we give
part of the law under which they are en-
acted, for which with the circulation we
are indebted to NJ. Ke,tel, the able CON-
mercial Editor of he N. Y. True Sun:
CSC. 81. If my branch Of the State
Bank of Ohio shall refuse 10 pay its notes
of circulation, or any Of them, in gold and
silver coin Of the awful, currency, ofthe
United States or which payment shall
be lawfully deuandeda at its banking house
or customary pla,e OF doing banking bust.
ness, during usual banking hours, such
branch shall be deemed to have committed
an act of insolvelty."
"Sec. 54. Actual deposits with any
solvent banker, IF established credit in
the cities of NV York, Boston, Phila-
delphia or Baltimre, subject to be drawn
against at sight, n gold and silver coin.
shall be deemed Equivalent to gold and sill
yer coin wheneve used in this act"
We defy any bIsiness man, acquainted
with such matter, to read the S54 and
not laugh in his sieve. What is an nctu-
NJ deposit with Broker in Wall street?
Why of course, tie brokers certificate,
letter of credit, Of acceptance: and this,
by the sage law q Ohio, is equivalent to
gold and silver inthe vaults OF the Bank.
A wider door I'd rascality, fraud and
speculation, was nyer dreamed Of by the
widest financier, who hoped and expec-
ted TO cheat and rolcommunity Who judi
ges of the credit { the broker and how ?
The board of contnl2 The how, must be
general reputation which can always be
manufactured ad nfnifum to order. A
Bank may issue 100000 in promises to
pay, place certificate of ten bankers OF
established credit, n the portfolio of the
Bank, and then the board of control must
report the Branch "all ship shape and
Bristol fashion," But how does the poor
laborer, mechanic or merchant get the
notes redeemed? Acne dollar note is pre-
scented for redemption, no coin need be
kept and a draft forone dollar payable at
sight 800 miles away, on banker of es-
tablished repntatiolto for one dollar is given,
two cents charged premium, ten cents
postage down, 40 cnts. back, if the draft
is paid, for the dollr will weigh an ounce,
and the bill holder,aft 2 weeks time,
writing letter andyoing twenty times to
the post Office, gets nett proceeds Of his
dollar, forty eight COTS, less than 30 per
cent. But again, and this modes operand,
is the one in VOICE, John Smith is a
relative Of the President or Cashier, and
proposes to them tomake raise. John
says, want to buyl0, 600 bbls. of flour,
on speculation; here S my draft on Suydam,
Sage & Co., though they never heard of
the drawer, for $4,000, at sight, on short
time, lend me the money, keep the draft,
and if successful, will pay it, ifnct eve
ry one will see wha. The Board comes;
Johns draft, is evidence of $4,000 in
deposit, and Of course is equal to coin, by
law, though, if join makes bad strike
with his flour, or axes Sabine slide
with the money, what is the draft good
for? Yet such cares can and have oc-
Cured. Now witt these facts, we ask
the people of Michigan whether they will
be longer imposed tpon, longer submit to
be robbed, for th. use Of spend-thrift
spectators? Rest assured, three months
at the outside, willsee every branch in
ruins, and the note, valueless.
We are informed, on credible testimony,
that the circulation O these banks is $780,
900 in this state, every dollar of which
will eventually be lost This is too heavy
a tax to pay to the inancier's of Ohio
Above are the facts and below we give
he circulation from official sources. We
say to all be not again deceived; never
mind brokers opinion, he may be an
agent, to circulate these identical notes.