The Jeffersonian. [volume] (Stroudsburg, Pa.) 1853-1911, 1858-10-14
CITY AND COUNTRY BANKS.

The crusade of the city upon the coun-
try haain one month reduced the circu-
lation of the country banks nearly mil
lion Of dollars, and as o consequence, ta-
ken so much from the active business OF
that part of the State, between Philadel-
pbia and the Allegheny mountairs. Has
this done any good to the city! Has it
benefited single Bank or individual
therel We think not. 1t has. however,
greatly injured the country. and in good
time it will injure the city, for to our
mind, the interests of city and country
are identical, while the mole of working
their interests are often very different
The city being the receptacle for all the
foreign goods that are imported, is now
the creditor. The country depressed,
with its business prostra:ed, It's crops de-
6cieut, its furnaces idle, it has no means
of getting money from the city, while it
is daily called upon for cash to meet the
demands of the city jobbers on the coun-
try storekeepers for payment of the goods
purchased.
Country banks were established to &C Z.
conmodate the country. Their custom
has been to lend their notes to the couu-
try storekeepers, to buy their fall and
spring stocks, and thus enable them to
anticipate their sales to the farmers and
mechanics, and iron manufacturers and
coal diggers and boatmen and laborers,
depen dent upon them for work. The
country Banks cannot do SO this year
Their deposits arc nothing. because
there is no surplus capital in the country,
and the result Of this crusade will be to
prevent the Banks from doing any accom-
notation business, aud in the end it will
operate injuriously on the city.
All banks make their profits from their
credits. The difference between the city
AMI country banks is only iu form
The country banks issue notes upon
which their Indebtedness is based The
City Banks do their business on deposits,
which are the accumulations from vari-
Gus individuals who have idle bonds,
which, for economy sake, they place in
Banks, and check out, as they are part
of discounts made by the banks to them
Oh condition that So much is never drawn
out, and forms part of the payment Of
the note when due, by which process the
city bank is enabled to get around the
law, and reap double or treble interest
This is the process by which the city
Bank give to their stockholders IL and
sometimes l5 per ct. per annum. Hith.
erto the City Banks have been content to
make all the profit they could, legally or
Illegally, out of their deposits; but, now
when the country is depressed, and when
there is an accumulation of idle money
in the city, their avarice tempts them to
break down their country cousins in
hope of getting the profits in circulation
also. Like all grasping individuals, they
will, we doubt not, Tall into the pit dug
By themselves.
The Legislature must look into the
matter. Or the country banks must re-
deem their notes in the city; then the city
bank. and the city stockholders must be
compelled by law to be personally liable
or all their deposits.
We all know that bank failures begin
FIRST in the city. Previous to the great
revulsion in 1897, when the U. S. Bank
and all the banks in Philadelphia failed +,
every country bank in Pennsylvania kept
its notes at par iu the city. The couu.
try then was sound, but the city was
bankrupt, and every bank in it was rot
ten to the core. The crash came, and
the result was that all the surplus of the
country banks was locked up in the loss.
es of the city banks. and which they re-
covered only 10 years. After this came
the system of reedeeming their notes at
home, by all the country banks who felt
strong enough to take care of themselves.
Last year, when the storm came again,
who fell frs. before its blast! The city
banks. and all who had trusted them,
again bad their funds locked up.
The city banks have bad skill enough
to control the legislation Of the State, SO
far as to be liable for their circulation on.
ly to the amount of the stock held by each
individual, For their deposits they give
no security. As an example of their
trickery, look at the bank state ments, and
you will see the Farmers and Mechanics
Bank with deposits to the amount of
three millions, foaf hundred anil eleuen
thousand, seUen h~nared and taoe,aty. nine
dollars, and only notes in circulation to
the amount of four hundred and twenty
six thousand. This bank assumes to be
the regulator; its President is pious and
good man, and yet his charter. with no
responsibility and undue banking privi-
leges, was managed through the Legisla-
ture. and he now thinks he is serving his
God when be is striving to bring all the
funds from the country banks into his own
vaults, and breaking them up 10 the at
tempt to add to his already bloated prof
its. Let him remember that one much
greater than he, Mr.. Biddle, tried to
regulate the currency, and failed.
The writer of this erticle cares very
little, as an individual, whether the Banks
are compelled to redeem their notes oil
Dot-but as a man of BUSINESS, interest.
ed in the welfare of the State, be does
not wish to see the country prostrated on.
sr Il ~