Daily Iowa State Democrat. [volume] (Davenport, Iowa) 1856-1859, 1857-09-11
Our Views OF Banking.

We have and do regard Banks of
ISSUE, ~ an evil growing out Of the
credit system and that evil il a ncces-
sary one 10 long rs the credit ays,em
is maintained in The commercial and
business relations Of men. Banks OF
issue are Of themselves a lcgalizcd
credit system, whereby so much rag
money, worthless Of itself, is made
equal 10 gold and silver, by custom and
the laws Of trade. II as supposed 10 b
a convertible representation Of goH and
silper. To keep within the intent of
the system, Bank bills ought always to
be convertible into specie. Yet SO
loose has the l'anking system become
that there is not one doiior IN specie yor
zen Of bills issued. Here is n swindle
upon the public, in fact, whether that
swindle natures now or at some future
time. The facility for creating money,
merely by signing certain "amLer Of
bank bills, scduces Banks into all sorts
Of speculation. A gIittc,ing chance
presents itself-thc Bank snaps at il
with the greed of miser- when i,
already has an excess of issue over its
authorized capital, the speculation
proves loss, and the Bank collapses
with thousands of poor lcpositors
widows, orphans and laboring persons
to suffer loss Ct all they have in the
world. In the abstract we are opposed
to all Banks. But we must take
society as We find it, and provide for
its business needs. The credit system
il too firmly established, to be shaken
by host ofrcformcrs. We must pro
vide safeguards for that system, and in
doing SO, We must regard locality and
our relations to other things.
Thus; at the East, where commerce
and Trade have become settled by
fixed laws, and fluctuations are not so
great, Banks of issue with a specie
basis, and also sound stock securities
IN addition may te tolerated, and in
fact may prove blessing, if rigidly
guarded by Legislative enactment
There, gold and silver as a circulating
medium is considered nuisance, as It
does not command a premium. But
are our circumstances in Iowa, like
those which regulate the affairs OF the
older Statesa
Everywhere around us are opened
the maelstrooms of Government land
Offices. In Nebraska, Kansas, Missouri,
Wisconsin and Minnesota, Uncle Sam
is gathering in gold by the thousands,
for lands sold. Consequently gold
commands premium, varying from
l to 3 per cent. The sale of gold to
land buyers is one Of the most lucrative
parts Of our Bankers business. 1t is
more profitable than selling exchange
upon the East. Such then being the
Of our State in its relations
TO the specie medium, can we establish
Banks Of issue, that will be safe, &C.
commodating to the mercantile inter-
ests, and such As will circulate their
bills at home We answer in the
negative. In the first place no law Of
this State will allow Icgalized bank
ing discount Of % per cent, therefore,
Banks could not compete with Bankers
and do legal discount business. These
banks would have to 60 into s1,eculo-
tons, then, and that too. at distance
from home beyond observation, in
order to give them an equal chance for
profit with private Bankers. This
foreign speculation might 10 in lands,
or railroads, or canals; but whatever il
might be, it would, 90 far as carried on.
deprive the merchants and business
men st home, Of that ratio Of discounts.
Instead Of being Banks Of acconmot,a-
s;os, they would inevitably become
Banks for specializing away from home.
- the Atlanta Of Georgia, and Hollo.
well Of Maine were. So that one great
object Of establishing Banks Of issue,
would be entirely defeated.
Again, Banks Of issue must be specie
paying, At al times,s. on demand; and
Il u not sufficient to trust to the honor
Of the Bank managers, to have and
Keep on hand, At all times, specie
saough 70 redeem it, bills. 1t will be
necessary to have good convertible
seaAs end Usitsd States stocks, equal
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