The republic. [volume] (Washington [D.C.]) 1849-1853, 1852-09-10


| JAMES j. SCARBOROUGH,
| ADAM G. FOSTER,
| JOSEPH w. BENSON,
VIM. J. PATTERSON,
Committee.
From the Ns,p York Journal Of Commerce, Sept. 7.
| Rascally Currency.
| The essential idea Of bank circulation is a cur
| rency redeemsbe with specie demand. 1t IL
enough that the bill holder should be safe from
ultimate loss; but and above this the bill must
be convertible into specie at option, presentation
at the counter o. the bank issuing it.
| This essential idea of bank circulation it has
been the constant effort of sharpers and shavers to-
avoid. The general banking law of New York,
| the mother of general banking laws in other
States, prepared the way for the realization of the
wishes of the class of men just alluded to. Under
the special charter system, the location of the
banks determined by the Legislature, and had
reference TO the facility with which they could be
reached by the holders Of their bills, and by
toners generally. But, under the general bank
ing law, the location Of banks is left optional with
the owners of the same, provided only they are
within the limits of this State Accordingly, very
| early in the history OF free banking, honest men
were surprised by finding banks established
(uominay) in the most obscure and inaccessible
places in the State, where there was business,
and not likely to be any Moreover, in the case Of
several banks, there was no banking. house at the
| place of pretended location, nor were any books
kept there, nor were there any arrangements, wor-
thy Of the name, for the redemption of bills. The
object to render the presentation of bills for
| redemption 30 expensive and burdensome that
it would not be attempted And such tbc
| practical result. The bills were in effect ire
dcemable anywhere in specie. The banks to which
we ullude were owned in this city, and managed
| here, TO all intents and purposes. But the bills
were not redeemed here, either in specie in
bankabie paper. Indeed, the law did not require
| it. And when the unrea condolences was urged Of
allowing banks in this city to avoid the responsi
bilities of their position, merely by entering their
names on the comptroller's books as located on he
| Adirondack mountains, or at Sackumagundy
| creek, they pleaded the hardship Of having TO pay
par for their bills at two places Whereas their real
object was to avoid the payment of par at all and
thereby to keep their billie at discount. The Le-
gisature however, at its last session, amended the
law to require all the banks 10 redeem either
| in New York or Albany, at not exceeding Of one
per cent discount Before, it had been !. This inca.
| sure gave great offence to the Wild Cat gentry,
and in revenge they transferred the nominal 10.
cality of their shaving shops to New Jersey and
Michigan, and latterly they have added Illinois
and Washington city. They were not willing to
have their rugs within I of l per cent. of par,
rather Sths, for OF course paper. mills owned in this
| city would not redeem here, but at Albany, and
uice uersx, which would make the actual discount
on their bills sths, If not By locating their shops
| nominally i'll other and especially in distant
States, they able to secure the desired rate Of
discount. On the other hand, it is necessary to
| keep the discount from sinking so low to pre-
vent the bills from circulating. Therefore, the
game lie, fret 10 locate the bank far off that it is
Impossible to present the bills at its counter for
specie. save at an expense s too great for the ad.
agent here who will purchase the bills at given
rate, say 10 or 5ths OF one per cent discount.
| great part Of the actual circulation in this city
consists OF just such trash as this Yes, and there
| EMPLOYERS enough
rags at discount, and then go and pay off their
| workmen and work women with them. Shame
| such narrow -necked hotties, we eay. And shame
on the men, whoever they be. that are pcrpetually
| issuing such deprecated currency and toistlng
it upon the community. How much more honor
able s their calling than if they were engaged in
| clipping or filing all the coin they could get hold
of, and then passing it at it's par value? Either
| operation ia a moral swindle, whatever it may be
legally; and We hope the ingenuity of men who
are familiar with such subjects will be set at work
| to devise remedy, if possible, for this growing
evil by Legislation or otherwise.
| This false and iniquitous system OF bank shaving
often leads to greater frauds; at least, to expo
sions. The other day bill of the ocean Bank"
| of Washington city-an 'institution' which
| had never before heard of-cane into posses
sion. On offering it to broker, we found that al
though the bank so new, it had already failed,
and all we could get for the bill was fifty cents
| the dollar.
On another occasion received 81 bill of the
| metropolitan Bank" of Washington city, marked
check letter A, No. 2,523. 1t was dated July,
1852, and signed H. Hayes, president, and II V.
Miner, cashier. At the bottom. in prominent let.
ters was printed "circulation secured by stocks"
Whether stocks of railroads in tho moon, or some
other stoc ks, VIC arc not informed. In order to
test the value of this bill sent it to friend in
Washington and asked him to get it cashed if
able. He wrote back (returning the billy as fol-
lows:
"WAsHINaToN, September 2, 1852.
"The note returned ia good for nothing here.
| There is no such bank here, and no one 10 redeem
the note.
"But Chubb Brothers tell me that it is New
York concern, and that the notes said to be
| deemed somewhere in your city,
After making dgent search we could find no
such person In New York, nor get any offer for the
rag. We found place where small amount of
the bills had been redeemed, but the mill ground
no longer.
There ia no law in the District of Columbia au-
thorizing the establishment of banks; and with the
exception OF such acts on the part Of the old banks
as may be necessary to wind them up, the whole
business of banking in Washington ia manifestly
illegal. Notwithstanding this, however, large
number OF nominal banks are issuing their deprc-
ciatcd currency in this city, dating their issues at
the seat OF Govern nent. A few OF these are owned
by responsible men, who, for the sake of their
good name will continue to redeem the notes. But,
apart from such consideration, this class OF circu
laton is entirely irresponsible. We have endea
vored to obtain ist of these illegal banks, nomi-
nally located at the seat Of rnment but as new
ones are starting every few days, it is difficult to
make up complete catalogue. The following
are come OF them: The National, Ocean, Republic,
America Metropolitan, Citizens, Central, Union,
Eastern, Merchants, Freemen's, Railroad, United
y, States, Exchange, Farmers and Merchants, and
Merchants Exchange There doubtless others
not included in the list. The bills of most all of
the foregoing are issued in Wall street, and have
obtained considerable currency through some of
the Bank Note Reporters, whic b bave quoted them,
and still quote. same of them, at a discount.
A new spccies-of currency made its appearance
here on Saturday. II has the appearance Of bank
note, but is In reality check on the Utica City
Bank. The following is Il copy Of it. -
"CASHIER UTICA CITY BANK.
STATE OF v,sssSs: NEW YORK.
Pay to the order of r. w. HUNT
TEN DOLLARS on demand.
UREA, august 18Th, 1852.
JOHN E. KINMAN"
On the right ofthe bill is the denomination, and
on the left the word 'Check." On the back il
printed or written '...
'Pay II. Beardsley, or bearer, the within ten
dollars. Elkhart, Indiana. X. w Hunt"
Several hundred dollars Of theae "chccks" were
| TCCeive ed here last week harr In,