The Ottawa free trader. [volume] (Ottawa, Ill.) 1843-1916, 1854-12-23
Otta}pa free Traoer,
OTTAWA, DECEMBER %, 1861.
Hank Pnucr for Take g.

s..--- s5H'r.
Eank Paper for Taxes
Two week ago we alluded to the PROPOSE
ton which had been made in Chicago, ana
to our establishment received with apparent
favor, to authorize ,hc',aX collectors in our
state to receive the paper Of the local banks
in payment of taxes. We characterized the
proposition as mons.roua, and we now pro-
pose to show that the characterizationis just
Many people seem to have erroneous ideas
in reference to banks. Good as the bank
is an expression that never deserved the
place it occupies in popular slang, Any
careful, prudent, wealthy business man Is
generally more reliable than the common
run of banks. Popular Lotions invest indl-
vidvals under the imposing name OF bank
with credit which as private business men
they never could obtain. II is all delusion.
The business man has his all at stahe-it he
breaks his property, business, reputation,
everything is swept by the board. When a
bank fails, the individual stockholders so far
from losing in reputation, get popular sym
pathy as unfortunate, and yet only lose to
tho amonnt of their stock invested
To show that banks are not safer than in
dividuals, let us look at the moaus operdndi
Of creating an Illinois Free Bank. A man
with $3.50 goes to John Thompson in
New York, borows $4,000 worth of State
stocks, goes to our State Auditor and gets
$50, 900 in bills for them. lie returns. S4o,-
600 of the bills to John Thompson &c.
600 in other money to pay for his State
stocks, returns home with $4,000 of his
paper, and with his remaining $4,000 com
mcnces banking. lie put his $4,000 bills
puts his $40, 600 aAoat, so that now there is
circulation of $50, 900 with $4,000 in the
bank to take care of it, Thus the banker
has borrowed at least s3j, 900 Of the public
for which he pays no interest, and on which
he yet receives interest. II there is no run
on the bank, it is true with good luck, the
banker in the course of few years may be
able to redeem all his paper; but in nine
cases out of ten, we venture the assertion, no
banker in Illinois is able to do it in ten years,
and in case of n run, the only recourse for
redemption is to the stocks pledged with the
Auditor. Could an individual, not invested
with the Fictitious credit given him by the
bank law, thus borrow without remuneration
$35, 900 off the public? Assurcdly not. Yet
the individual, in case Of failure, has in every
way more to lose than the banker.
Now suppose our State receives her rev
cnue, amounting to 500, 600 year, in the
paper of such banks. While the revenue is
collecting and locked up in the treasury,
home currency will be scarce, and the banks
will operate freely, knowing their paper will
not return to plague them. But the time to
make our payments in New York comes
round. Then the Governor must either pay
five per cent. for exchange on New York,
thus involving a loss Of $4,000 to the
State, or must 90 TO the banks and demand
the gold. In either case, the Governor, or
the brokers of whom the exchange is pur-
chased, will at once return all the bill ofour
banks to their counters for redcmption.-
What will be the result? What would the
result now be? 4 universal suspension and
depreciation of our bank paper would be in
evitab,.. 'hus both the public and the
banks must suilor.
But suppose, again, the banks falling to
redeem, the State is obliged to resort to the
securities for means to pay her debts in
New York. The delay in forcing such secu-
rites on the market, and their inevitable de-
probation under such circumstances, it is
easily conceived must result in immense loss
to the State. An infinitely better course 10
relieve the people in the present scarcity of
specie would be to reduce the taxes While
they pay in bank paper, the difference to
them between that and specie would be a
trifie. But to the State the loss would be
equivalent to heavy reduction Of taxes
Our banks are mostly owned by one or
two individuals. IT, as we have shown, their
responsibility is no greater, why not authorize
as well the collectors to receive the notes
"on demand of our private business men,
as of our individual bankers? Is merchant
less honest than banker?
In thus comparing the relative responsible
ity Of bank and individual, it is, however,
the very farthest from our desire to cast
even doubt upon the safety of our free
banks. Without an exception, so far as we
are advised, their paper is secured beyond
reasonable apprehension of loss. But with
half million in the hands of the State to be
redeemed at once the case would be entirely
different. Our State credit, our banks, and
business men, in any thing like eight"
times, would all go down together.
The experience of the last twenty-five
years has abundantly taught US that a union
of the interests of bank and State is ever
pcrnicious to both. Let them be separate
Our bean ideal of a banking system is to have
no charters at all--no legal cloak or machin-
cry to give individuals credit which they
could not otherwise obtain. Let banking
partnerships be as free as partnerships in
merchandising. We want no legal garniture
for one class that is denied to another. Let
every tub stand on its own bottom.
TEAcuER's STATE IYsTlTUrE.-Thc Teach
ers State Institute will be held at Peoria on
the Goth inst. 1t is desirable that the School
Commissioners Of the several counties in