West-Jersey pioneer., 1867-11-01
THE NATIONAL BANKS

Banks, and the reasons solicited which ,,.,..
that form of national currency more valuable
thau any other form. Some alarm was bar;n
ming to be felt in financial circles from tho ~
sitions taken by prominent politicians in refer
ence to the abrogation of the system. and also
from the position of the New York T,ec;s,a.
ture, which body has a bill enabling the. hanks
OF that State to organize upon other than a
national basis. Mr.. Cooke replies in an e,ab-
crate and wel-written letter, the facts of which
we briefly condense for our readers. the more
willingly because the question in all its asnects
is not thoroughly understood by the mass Of
our people, and therefore their opinions are
endless and varying. sti Neisafl5a
He refers to the fact, that before the estab-
hsnment OF these Banks each State chartered
Its own; that they were based upon different
laws, with different grades of security in each
state; that they were never at par in the diff
ferent States; that the bill holders could not
possibly tell, when remote from the locality.
whether the bills were worth anything or not
that, as the bills were all different in appear
ance, counterfeits flooded the land, and their
detection, except by experts, was an impossi-
oiilty that failures were frequent. and the loss
1eil generally upon the bill-holders, who were
least able to bear it; and that when the war
commenced the banks of the country were ut
teriy unable to furnish the government with
the means of its prosecution. Under these
circumstances the National Bank system was
introduced as a matter of necessity, when its
advantages became at once so apparent, that
it has been retained from choice. These ad-
vantages were, that they were everywhere
uniform in appearance, making counterfeiting
difficult uniform in value, being worth as
much in one section of the country as in an
other /; the bill-holders are secured against
loss, as funds, both for the face of the bill
and the expense of liquidation, are depo tied
with the government, so that failure makes
no difference. Indeed, by a curious anomaly,
just now the bills of broken bank are worth
more than those oe solvent one, for as Con-
gress has lin ted that currency to $500 OOO,-
900, and that amount is issued, any association
procuring the notes of these broken banks can |
deposit them with the government, and receive
new notes to that amount as basis upon
which they can enter the banking business for
themselves, and notes of broken banks for
this reason frequently command from two to
five per cent. premium.
Mr.. Cooke shows conclusively that the gov
ernment receives a great deal more in the
shape of taxes from these National Banks,
than would accrue if they furnished green
backs to the country and saved the interest
which they pay for the use of money. We
have not space to go over all the figures in our
columns, but simply say that the government
is gamer by what the National Banks pay in
this form over the mere amount of interest on
the S3OO,OOO,00O, to the extent of over $lO,-
OOO, 900.
The superiority of the new system over the
old is shown in the fact, that viii nearly sew
enteen hundred of these Banks, there have \
been but an average of two failures year, and
of these not one cent has been lost by those
holding the bills. Its superiority over all
other systems is also argued from the fact that
both the public property of the nation and the
private property of the Bank, and its stock
holders, are responsible for the face of the
bills. 1t puts an end to the legislative corrup-
tion which has always connected with obtain
ing Of charters in State institutions. He
deprecates largely any interference with the
system as now established, insisting that will
take US back to the days of irresponsible paper
money, secured only by the honesty of the
capitalists of bank which, in SO many in
stances, have aeeced the poor of the land in
the days that are gone. $40 ....
The banks do not make as much money
under the present sy stem as under the old one,
and in general would very gladly return to it,
as th.ir own profits, freed from governmental
restrictions, wonld be much larger. We think
Mr.. Cooke has done good thing for the
country, just at this time, when INSCRIPTIONS
demagogues are attempting to excite distrust
by disparaging the currency. We append
humorous extract from the letter, which will
give In its quaint form an illustration of the
ideas we have just been penning.
eIn 1868, shortly after the organization Of National
Banks in Harrisburg. solid Dutch farmer, of whom
Pennsylvania has many. ana whom shall call Mr..
signifed to the cashier Mr. Wier that he wished to
draw out 5000 of his balance. Mr. Schmidt, by the
way, stockholder in the bank to the amount OF
Sl6000 oesides being depostor land his habit,
it is of many of his class to keep his balance
bank comparatively SMALL bv drawing out his funds,
and storing them in various cdd places about his
dwelling. his was done Tor the double purpose OF
preventing the 'sboys" of the family from learning
the precise amount of paternal fumes on hand and
satisfy sort of vague belief that the money
safer n his own hands than in anybody else's. The
cashier stepped his desk. and flied up check
Mr.Schmiit to sign, and then handed him two thou
sand dollar green backs treasury notes. clean and
bright from the printers hands. just such the old
gentleman had until nov preferred The bank Off
Ger was little surprised to his customer
turn the notes, with the remark - a
"Tank you, Mr.. Vier, tnk l not want dem dis
morning; take some your nash'n. bank notes dis
Certainly" replied the cashier. the bank having
just received It circulating notes from Washington,
and he counted out the required amount in the notes
of his own bank and handed them to Mr. Schmidt
the latter deposited the new currency carefully in
his waiscoar pocket pinned it fast and was about to
depart, when occurred to the cashier to ask him
why in the world he m should prefer national hank
chair ana proceeded to state his reasons somewhat
as follows: ..s5
vich authorize these nash'na banks ,und bin study
in IT. too. Den | bin studyin' MIR Cookies leee
book apout how garize these banks, and set em
going. Ind tells you vat 6nds-T finds he nash
,nal bank notes ish fe pesht-petter greenbacks"
" What in the world brings you to that conclu
slonf" said Mr.. Welr, to whom the view was not
s'veip was the reply, . gIeenbacks sh goot, very
eoot eoot enough for body but belief The notes
Of your nash a bank ish leetle peter, because finds
in the law that peor. dis bank issue toar OF
circulation, it must deposit NIT the Treasury at
. Washington toiar and ten cents in government
bonds, una if dis hank wants to issue one hundred
tousand tolars it must deposit NIT Mr.. SPINNER, U.
Treasurer one hundred und ten tonsand tollars in
bon d. to secure that circulation if the bank
away und don't pay, the notes of the government
will pay 'em. Und this margin of ten per cent must
always be kept eoot II the bonds goes down in the
market den te banks must deposit more init te Trea
sry to keep bonds always wort ten per cent more
as 10 circulation Veil, that make te nash nal bank
notes loost goot greenbacks und ten per cent.
more only they ish not legal tender Den. Mr. Vier.
/ finds on der nashnal bank notes tie great seal of
our government, und te names of Mr. SPINNER und
Mr. Coby-te same which is signed on te gresnbacks;
,nnd desc gentlemen say on all te bank notes that
desc notes will pc received by the United States in
payment of all dues except gold customs, and viii pc
maid out nv te government in payment oil. all debts
except gold interest. Vell that makes em so goot
as green backs twice 9i a.9s
= g Den, Mr.. Vier, looks on desc nash'nal bank
hcniz ct fndI md fp