Indiana State sentinel. (Indianapolis, Ind.) 1861-1865, 1863-09-14
The Financial Com bat--The state
Banks.

We have shown that the head Of the new ma
tional banking department has openly announced
his hostility to the State banks, and uttered his
prediction that they must wind up their affairs
and give place to their newer rivals. These in
stitutiOns for the most part are under the control
Of high minded patriotic men, who have already
manifested their willingness to aid the country in
its present struggle by every lawful means in
their power and who must be now somewhat ex
ercised as to their duty in this emergency. A
majority of them are not so selfish as to consult
only their pecuniary interest, independently Of
higher and holier obligations; and most of them
shrink from nything which shall even seem to
place them in opposition to the wishes of the
Federal authorities. What position shall they
take in this contest which the Washington Comp
troller declares inevitable? The question ap
pears at first, to have wide range. but little
examination win bring it into more narrow
limits.
They need not hope to change their Institutions
so as to secure to them the favor Of the depart
ment This is explicitly declared by the national
COMPTROLLER. He not only declines to issue any
currency to them, except upon compulsion, but
he openly cautions them that the only way to his
regard is through thorough winding up of their
affairs, the sinking Of their corporate names, and
fresh organization a association But
even if the Comptroller willing to facilitate
the change, it is not easy TO see how it is 70 be
done. The banks in most of the States, are
amenabe to statutes which forbid such transfer.
and prescribe penalties for their violation. for
which the act Of Congress viii afford no relief
Nor can they easily follow the ComptrolIers
advice and wind mp their affairs preparatory to a
new existence in the national form In this
State the process of winding up an-estabshed
bank which is doing prosperous business would
be 4 herculean task. involving heavy losses and
exDenses for which the stockholders would re-
ceive no adequate compensation. Would the
managers of n bank be justified in such under
takngl In m1ny Of the baUks a large portion
of the stock is owned by widows. and held in
trust for minors, and otherwise placed within
limits where 1t could not be easily managed by a
conscientious board of directors Besides the
present banks hold a large amount of specie which
must be sold If they wind up for the benefit of
their STOCKHOLDERS The new banks are organ
izing on another basis, and will not wish TO buy
L. It's safe keeping in other hands has been so
much hampered by late Congressional legislation
that individuals could not afford to purchase and
hold IT, IL must then be shipped and sold
abroad As custodians Of our chief reser-
voirs of specie. we could hardly spare our State
banks.
We see no other course. then, for the State
banks to pursue but TO hold to their present
organizations and try 10 outride the storm which
has been gathering TO overwhelm them. Ii is
probable that up this point OF these insti-
tutions will find the path of duty sufficiently
plain But here question arises which is one of
re,l difficulty. In struggling for their existence
they will find themselves engaged in a contest
with the new associations If the Comptroller
had not avOwed his hostility this collision would
have been inevitable No bank cin remain neu
traI and continue TO transact active business 1t
must 90 IN with the current. when il will soon
End itself overloaded with the new issues and
most Of its available assets absorbed in them; or
il must decline the exchange and refuse to take
them, or taking them. must present them at once
for redemption.
We do not think that the banks can refuse to
receive these issues. The Government is the
great employer. and these notes will be the
currency in which il will deal. Many who have
not needed our warnings heretofore. will find this
pet banking scheme they praised 40 hippaDtly
monster of very formidable dimensions when
they come TO examine its proportions The notes
of these new banks are TO be a legal tender from
the Governments for every debt or claim whatever
except the interest on the permanent debt All
contractors, all Government employees and
creditors must take them on presentation. The
President, for his salary, and the farmer for his
bacon, will be paid in these notes. There the
tender stops by law. but must go on by necessity
afOaf, and every one must take them or nothing
Besides. we foresee that the banks will have an
interest in making the notes current The Gov
ernment owes them a large amount. The Seven
and three-tenths Notes held by the banks are
convertible at the option of the holder, into
twenty year permanent loan; that these will
be exchanged. and not paid off But above these,
the banks have loaned 10 the Government fftv
million dollars upon ten day certificates and
hold, besides about thirty million dollars Of the
one year certificates. The Treasury, under the
law can cav these eighty millions IN the national
notes and the banks must take them. Depositors
need not take them Of the banks, as they are
legal tender no further; and the banks, TO be rid
Of them. must make them current. The market
will also be full of the notes paid out by con
tractors and others; and one must go outside of
the atmosphere or consent TO breathe IT,
II will be asked, why may not the banks take
then, AID present them for redemptoBf They
NAV. and this will probably be the course they
viii eudeavor 10 pursue: but this is a tack Of no
little magnitude For let il be remembered that
the notes are printed only at Washington. but
are TO be redeemed wherever issued. The points
Of issue will be muItItudin0us when the scheme
IA IN full operation; and the redemption is the
least pleasant part Of the whole business, no espe
cial facilities will be provided in this direction.
The Government will be collecting its internal
revenue from all psrts OF the countrys and a huge
mass Of mixed notes will thus be received from
all quarters and paid out here National bank,
No. DAT, at Leasen worth. Kansas; do. No 5l4
st Dubuque, Iowa; do. No, 6l5 at ouDgstown,
Ono; and others Of ike character will be min
gled IN the Pile. No matter where issued, the
creditor must receive them from Government
~whanavar o1orod f. l. II lii