Gallipolis journal. [volume] (Gallipolis, Ohio) 1837-1919, 1869-10-28

tlonal banAlng system over the
State Banks is foreibly stated in the
last issue of Thompson's Bank Note
Reporter, as follows:
The advantage of the National
Banking system and National Bank
ing over State banking may not be
essential, SO far as profits for the
shareholders are concerned; but the
advantages, SO far as the people are
concerned, are of vital Importance.
We will enumerate some of these ad-
vantages: l. The National Banks
furnish uniform currency. The
circulating notes of banks every
where are current and par every
where 2 The currency, being of
uniform value in all parts of the
country, establishes cheap and
uniform rate for domestic exchange
Let those who paid enormous dis
counts on uncurrent money and
enormous rates for eastern Ex-
change" in the days of State bank
currency, now contrast the two sys-
tens. 3. The public, except stock
holders aud depositors, have no fear
of broken, insolvent, or badly man
aged National banks. The State
bank currency, in its day, formed
the very worst element in panic
When State bank failed, all State
bank currency was distrusted, and e
general rush to the exchange offices
followed. Millions of bank notes
that were but the day before usable
as currency, all at once became
useless, and worse than that, for it
became a species of commodity, and
it took much real money to buy and
send it home for redemption Now,
every dollar of bank issues is real
money all through the most violent
panics. The notes on broken Ma
tional banks are just as good as any
money in circulation. 4. We now
come to an advantage of the National
system over the State system of
great interest, especially to depos-
itors and customers. The National
law makes the stockholders individ-
ually liable for an assessment on
their shares in case the banks as
sets are not sufficient to pay its de-
positors. The State Bank stockhold-
ers are not assessable for the safety
of depositors, for the reason that
State Banks are not now banks of cir
culation. The following is the Ma
tional Bank law:
"SEC. II. The shareholders of any
association formed under the provi-
sions of this act shall be held individ
ually responsible, equally and rata
bly,, and not one for another, for all
contracts, debts and engagements of
such association, to the extent of the
amount of their stock at the par
value thereof, in addition to the
amount invested in such shares"
The following is the State law on
this individual liability question:
Constitution of the State of New
York, Article 8, Section THE
stockholders in every corporation
and joint stock association for bank
ing purposes, issuing bank notes or
any kind of paper credits to circulate
as money, shall be individually re-
sponsible to the amount Of their re-
spective share or shares of stock in
any such corporation or association,
for all its debts and liabilities of ev-
cry kind" The old State banks
that continue to do business under
the State law have retired their circu-
lation, and the new organizations un-
der the State law, having never is
sued obligations to circulate as mon
ey, effectually shields the sharehold-
ers of State banks from the individual
liability. The National banks, wheth-
er they issue currency or not, give
the depositors and other creditors
this individual guarantee. 5. In
case of the failure of a National
Bank, the assets are Immediately
taken in hand by Government re
ceiver, without going through the te
dious and uncertain process OF State
Courts, and it's affairs are wound up
with dispatch. This is very differ
ent from the usual process with
broken State banks. 6. Tne exami
nations of National Banks by Gov
ernment Inspectors has restraining
and salutary influence over bank
that is of vast import
ance. When bank is found to be
doing loose, unsafe, and losing bu-
siness, it is closed up, before even its
capital is lost or its insolvency fair
ly developed. Taking all these adj
vantages of the national system over
any State system into consideration,
it becomes the people to see to it
that State banking neveA again gets
into vogue. We hope the people
will not lose sight of the fact that
formerly millions were lost annually
by uncurrent money premium on
Eastern exchange and broken bank
money. Now nothing of this kind
is lost. Bear also in mind that in
former times the State bank curren
CIV was the most infammable element
in the time of panics. New beginners
in business should talk with those
who were in business in 1850 to 1860,
during the Indiana, Illinois and Wis
consin "stumptail' times, and dur
ing the revulsion of 1857, when the
currency of all the States was thrown
into utter confusion.
Receipts and Disbursements,