The Middlebury register. [volume] (Middlebury, Vt.) 1850-1882, 1858-10-13
Bauk Complications.


the extraordinary course pursued by the |
Suffolk Bank. This was briefly alluded
to last week,--we now propose to state
the case-briefy, but in 80 clear and sim.
pie a manner that all can comprehend it |
and see how it reaches the whole commu-
nifty.
The time was when the country Banks
mad no provision for the redemption of
their bills away from their own counters.
Consequently, these bills. which naturally
found their way to Boston or New York,
the centres Of trade, could be converted
into specie or its equivalent only by re.
turning them to the Bank from which
they issued. This vas usually done by
selling them to money brokers at dis
count. This discount amounted, in the
aggregate, to enormous sums, and the loss
fell not merely on the holders of the bills
for it had its effect upon the value of all
property exchanged by it. Thus the want
of a par retismptioh in Boston was Sc.
verely felt, and to meet this want the Sui.
folk Bank Redemption Scheme was in.ti-
tuted. Their system of operation is as
follows: They propose to the country
BANKS to make with them, each a depos.
ito Of $4,000, without interest, with the
city Banks the stipulation is for s., O0O.)
In consideration Of this they engage to re-
deem the bills of the Banks with which
they thus deal at par, and at the same
time receive Of them the bills Of other
Banks and thus become the medium of
exchange. The great desideratum was in
this way accomplished &c. the bills of coun-
try Banks, which entered into the ar
rangement, were at par in Boston, and
New England currency was made as per.
feet as human device could make it.
Though the operations of this magnificent
scheme were in the highest degree saluta.
~ upon the currency and beneficial to
the community, il was not for the inter-
ests of the country Banks themselves, as
it promoted a more rapid return of their
bills. Yet the Suffolk Bank found means,
and, by the aid of State legislation, sue.
oeeded in forcing nearly every Bank in
New England into the arrangement.
Now let us inquire how the Suffolk
Bank is affected. BY the permanent de.
posites they have, without interest, capt.
tai of not less than 100000. Again:
In their accounts current they every day
charge interest on every deficiency, but
allow none for surplus. These SURPRISES
are often large, not unfrequently with one
Bank from one to two hundred thousand
dollars, of which they have the use and
which implies q considerable deficiency
somewhere else on which they are draw
ing interest. Thus it will readily he seen
that the profits of that concern are enor-
nous and ere made at the expense of the
country Banks. To save This the Banks
proposed to create an institution Of their
own, by which they could make their own
redemptions IN Boston, effect mutual ex-
changes and save the tribute now paid to
the Suffolk Bank. After some delays
there was established, during the last sum
mer, the Bank of Mutual Redemption,
and some of the Banks have removed
their deposits to it, The new Bank il, of
course, a rival Of the Suffolk, whose trib-
ute will be cut of in proportion as it sue
eeeds, and it is easy to see that it mu-t
be an entire success, or all entire failure.
In this state OF the case the Suffolk Bank
makes full display of its disposition an l
its power. Every Bank that presumes to
break with it has presented at its counter
large amount of it's bills, and specie de-
manded Here it is easily seen that the
whole community is interested in this
great struggle. 1t is in the power Of the
Suffolk Bank to compel any Bank to call
in its issues and to decline making any 10
any grea extent, and, if we are to judge
trom it. late demonstrations, it is deter
mined to compel the Banks to remain in
5 state of vassalage, or practically TO su..
pend operations, The effect Of the latter
alternative upon the community is too obs
vious to need remark.
The course of the Suffolk Bank falls
with peculiar severity upon the Vermont
Banks. We find the case stated as fol.
laws
"By the law Of Vernon, the Banks are
bound to pay into the Treasury tax Of
two per cent, on their capital stock, pei
annum, under this provision and condition,
to-wit if thoy keep deposit of funds il
Boston and there uniformly cause theil
bills to be redeemed at par" then they are
exempt from the payment of said tax