The Ottawa free trader. [volume] (Ottawa, Ill.) 1843-1916, 1853-07-23
The Law AGAINST Small B,i's.

has an article c:itici,irg the provision OF the
law passed at the last Legislature IN relation
TO Banks and Banking &c While admitting
the law to b., in most Of its provisions, unrN g.
cep,innaLlc, it says that 'thc good intended dy
il, is furnished by being coupled with the en-
acment that prohibiles the passing OF all ei'!S
of banks, in other states or Canada under the
denomination Of So" The remainder Of the ar
ticle is devoted to an examination Of the merits
of this provision Of the law; and II the winter
ha. proved anything. it is tia, he ba. no, fully
considered hi- subject He says
at cannot b. designed a. protection against
the failure of Banks of other States, II It were,
there would be more reason for prohibiting the
LARGE bills than The small ones The same rsa
.on would apply if It is intended as protection
to our STATE Banks in opposition 10 those OF other
States"
No ore prscnls tia, the law was intended
as a protection against bank failures but as
protection TO our own local bank. Let US ex
anime his question.
Why is it that Our market is flooded with small
bill. from eastern iank'l 1t is fact well
known TO cur business men, that the money
which is used to buy our grain, orr wool. an"
cnr cattle aud pink, is money brought from cast
era banks. and IN most instances borrowed from
them I, is also fact well kuown, and which
was proven, and sworn to, before tie committee
os the last Legislature, while they had this bill
under consideration that those eastern banks,
were in tie lali. of loauiny their bills under
the denomination o!:5 Tor one per cent, per an.
MN less, than llpy would loan those Of a ary.
er lanaminaUol Why is this evidently be.
cause snaN bills are worn out, and lost in Til,
country NOR, npidly than large ones, and con
scqGently great many are never returned 10 the
bank. for redemption. You divide a five dollar
bill into five paris and the chances Of one Of these
part, bsug los,ii a: least ten time, greater than
vi Ind remained whole; the wear and tear Is
also that much greater because the small bills
circulate full twice As fast rs large ones EI.t.
orn banks understand this fact, and they Lave
long acted uponhe principle, That large per
coinage Of small bill, sent by them 10 the ives,
mover return, and are go much game to the banks
issuing item, and consequently, are so much los,
to the western producer, and so much tr;Jale
money paid 10y Us to eastern blnkers.
We all remember the cry raised aglins. tie
hJod of small bills introduced by Mr. Leavtt
into this State during The comple,ou Of the Hi.
nois and Michigan Canal Tie whole 5, 600, 600
loan, made fol That purpose, was deposited in the
American Exchange Bunk in New York, and in
lieu oft, our canal was built with paper money
Of the Denomination Of from 81 to 50, on the
above bank Why did they not send So $40
$50, bills ineal Of 81 g and 1891 b. cause
the larger ones would be more carefully prescry
81 and in n short time would return to the banL
again for redemptian, while The small ones cir
cnlaling with so much greater rapidity are soor
worn out, and large percentage of,hem ave lost,
and but few Of them ever return for redemption
The same is The case with our present public
Improvements. They are all built with eastern
small bills. Who ever secs till on he Hart
ford, New Haven, and Bridgeport banks, Of over
s.. They are exceedingly scarce, and yet million,
ofmoney on these banks has been expended IN our
state during the last few years
The constant loss, therefore which the people c
our slate have been sustaining by these means
was sufficient reason for the legislature to pIies
gna'd against it; and it Lehooycs all good CHI
Gems to stand by the law.
This enactment was also deemed essential fgr
the protection Of our own bank, against Ills for
eign competition, so fatal to them.
Eastern banks can send their small bills here
and safely calculate upon making fair profit by
having item detained in circulation, far away
from home, ard where they arc safe from being
called on to redeem them. This is the rule they
NOW act upon.
Its, However different with our own banks, Of
small capital and whose circulation is confined, to
n great extent to their own immediate localities
They are liable every day to be caledon to re
deemed their own notes in specie and they must
doitl And If this specie is to be absorbed, and
its place taken By the small bills Of foreign banks
it renders it impossible for our banks to continue
the issue Of small bills for circulation in their own
vicinity. They would have to resort to the same
plan, adopted by eastern banks. And the result
would be- our own banks would send their bills
TO the east anu exchange them fcs bills of eastern
banks, which they would CIRCULATE here instead OF
their own Thi' has already been done to
a considerable extent, and had it not been fer
this excellent provision Of the new B mixing Law
or banks. in selfdeience, would all have been
oblgef to DO it. 1t was this exchange Of bill:
which made specie so scarce here few month:
syo and 1t i quite relceptable. IA the ioseigt
Emll bills arc hurried olt If the state and oul
own bank bills take their place that specie il
gradually becoming more plenty
The banks Of this state have not dared, unit
this law was about to take effect 10 circulate theI
own small bill within their own vicinity. Til
will not be denied; every one knows it to b.
true. Liable 10 have their specie drawn from
them every day, they could no, do i, I,.is 80,
tia. paper currency vii, 70 certain extent