The Fremont weekly journal. [volume] (Fremont, Sandusky County, Ohio) 1867-1877, 1867-10-25
NATIONAL BANKS.
0uestiens and Answers About
Them.
LITTER FROM JAY, COOKE.


Them.
LITTER FROM JAY, COOKE.
The Presidents Of the two National Banks
in Sandusky City addressed letter to JAY
CooKE. E.q, recently, asking him 10 give
answers tn the following questions in order
that information as 10 the origin, condition,
objects and merits Of the Nat onal Ban king
system should he spread abroad:
I. What was the origin of the National
Banking System?
ii. What is The character of the National
Bank currencyf
Ill. What is your reply TO those who
claim that tho Government could and should
save the eighteen milliors of annual intar-
est now paid on the United States bonds de-
posted by the Nationsl Banks'to secure thtir
circulation by retiring the three hundred
millions of National Band notes, aud issuing
like amount OF greenbscks instead?
", What is the present position of the
National Banks?
V. How and wherein is the Nationsl
Banking system superior 10 the old United
States Bank or the State Bank system?
VI. Why should the National Banking
system be perpetuated?
Mr.. Cooks answer to their questions h:ls
been given, and his authority on questions
pertaining 70 government securities and
practical banking is of the greatest weight.
We have not room for his entire letter, but
avail ourselves of the following excellent
condensation from the State Journal.
''The six questions asked are substantially
answered in the first four terse and condens-
ed replies given by Mr.. Cooke, and we shall
confine our attention to these only.
1. ORIGIN OF THE NATIONAL BANKING sYs
TEN.
This distinguished banker in substance
says: That until 1868, our paper currency
consisted of notes of banks chartered by
the several States, under laws peculiar to
each State, with no approach TO uniformity
in basis or in bank legislation that in most
cases the currency wss left to take care Of
itself, and the bill-holders 20 take care Of
themselves. that few State bank notes pass
ed at par In all parts Of the country, but had
various rates of discount and different values,
in diffsrt mt parts of the country at the same
time, and that exchange between different
sections was made expensive and vexa-
tious; that the notes of no two banks being
alike in appearance, the country was hood-
ed with counterfeits, rendering II unsafe for
people to accept paper money, without con-
sUlting an expert that failures under this
system were frequent and disastrous. the
losses usually falling upon The blu hoIdeIs
and the public mind, concerning the soil
veucy of banks, was constantly filed with
apprehension that more chaotic and un-
satisfactory financial condition could not
well be imagined.
That at such time the nation, being en-
gsged in supressiDg great rebellion, was
forced TO meet expenditures utterly unparal
leled; that the only manner in which the ex-
isting system could be made even temporar-
lily available, was to grant The State banks
the widest license of issue, thus flooding the
country with an irredeemable, and 10 great
extent unsecured paper currency; that as the
only means of bringing fiuaDcinl order out
OF chaos, of giving the country safe snd
uniform currency, and above all Of furnish
ing the sinews Of war, our Government orig
mated and put in successful operation our
splendid system Of National Banking insti-
tuiions, which enabled the nation 10 meet its
6uUTtnUuS expenditures duu u1ub Aut WAT 10
a victorious issue; that the plan thus devised
was not designed as temporary expedient,
was meant 10 be permanent financial sys-
tenn; that one Of the terms or conditions up
on which the State banks surrendered their
charters and conformed themselves to the
National plan, ,ods ae pledge rom the Gov-
erilment-n,ade accessory 10 induce them TO
leare the ,feld-ttat they should be permitted
TO issue certain amotut Of circulating noles;
that the change from The old plan to the new
swept from existence a currency mongrel in
appearance, unstable in value, and insecure
in character, and substituted currency uni
form in feature, and in value, and safe rs the
Republic itself; that the system secured for
the Government an immediate loan Of three
hundred millions Of bank capital, established
sixteen hundred efficient and responsible
agents for the negotiation of other and great
er loans; and that the soldiers of the Union,
when pay for wages and subsistence was in
arrears, were suppl ed with the much needed
means, through the active and earnest CO.
operation of these National Banks.
II. CHARACTER OF NATIONAL BANK CURRENCY.
That from its uniformity in appearance, it
can be recognized wherever met without the
aid of brokers clerks or bank note report
ers that owing TO the different plates aud
designs it is impossible to alter these notes
from a lower denomination 10 higher, or
TO counterfeit them
That the uniform value Of this currency
in every State and Territory saves millions
of dollars In exchange, discounts, DC that
in one sense they are safer than greenbacks,
both public snd private credit being pledg-
ed for the payment of these notes that they
are wholly unaffected by the suspension or
destruction of the particular bank whose
name they bear, and that no loss can fall on
the note-holder in any event.
III. SUBSTITUTION OF GREENBACks FOR MA
TIONAL MOTIFS.
Mr.. Cooke says that the issue by the Gov.
ernment of legal tender notes is an anomaly
in finance that Il was purely war meas.
ure, lusti6able because necessary to the life
of the nation, and should end with the re.
turn of prosperous peace; that they should
be gradually replaced by a currency which
is legitimate and permanent that without
this pledge to the old banks Of circulation,
they would not have surrendered their char
ters, and it would have been impossible to
establish tie national system al all that
circulation c7nnot now be taken away with
out a palpable breach Of fai'h toward the
n
breach of faith as would ever after render
capital timid, cautious and backward in its
dealings with the Government. That the
taxes they pay TO the Government exceed by
ten millions Of dollars the eighteen millions
of annual interest they receive; or in other
words that instead of the Government pay
ing the banks eighteen millions of dollars
annually, the banks pay the Government
ten millions, eight hundred aud forty-three
thousand collars for the privilege of EXISTING,
". PRESENT POSITION OF THE NATIONAL
BANKS.
That, having lost their profits as Govern
ment agencies, they cannot now declare
dividend Of more than seven per cent. by
reason of heavy State and National taxation,
and The system is in a condition most favor
able to the people. The bill holders arc COM
pleiely and always secured against every
possible accident. We have the best system
in existence. Rest and be thankful. b..
BRIEF MENTION. ---.