The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1870-04-01
Our Country Banks.

ln0 Olu Complaints HBalnSJ bue Olu Dauh
system of circulating notes were well war
ranted by its great abuses, and the evils of
an irredeemable currency are as real and, per-
haps quite as mischievous; but there may be
as great Jury in remedies as in the disorders
for which they are employed. England has
been tinkeriDg her banking system for a
couple of centuries without ever once amend
ing it. Occupied always with the incident
evils, her statesmen and economists have
never yet clearly seen or boldly provided for
| the benefits of the banking system.
The present charter of the Bank of
England knows nothing and means nothing
but the instant convertibility of her
circulating notes. All the other uses of q
bank are absolutely sacrificed for the assu-
rance of this aim, which happens to be the
very thing that its policy cannot accom-
! plish The one only way of securing
metallic currency is to abolish all circulating
notes, and along with them the public
credit system The great bank machine
went into operation in 1914 with its safety
valves screwed down tight, and already
they have been forced open three times by
orders of the Privy Council, that it might
be kept on the track in running ORDER that
is the bank has been allowed, when she
was brought to a stand-still, to run the
risk of suspending specie payments, as the
only means of answering any of the neces-
sary purposes for which the institution was
| created In word the charter, intending
/ nothing bnt the maintenance of specie pay
ments works exactly like the thing it aims at
redemption of the notes so long as such
redemption is not demanded, and suspension
whenever it is demanded. That's the whole
history and the whole philosophy of the idea
in sentence. We also have had enough of
the same work with the same design, and a
great plenty of the very same results We
are particularly busy at this business now.
| With might and main we are at work forcing
resumption and providing for its perpetual
maintenance, just as if that were the whole
aim and end of a currency system, and no.
thing else need be cared for, and everything
else may be sacrificed to secure it.
Would it not be well before going any
further to stop and inquire whether certain
other objects are not worthy of some atten-
tion, and whether all that is valuable in a
sound currency might not, also, be attained
along with these other things? Without in
dulgng in speculations, or resting our views
upon theory, there is something to be learned
from an existing system that answers all the
4 purposes of banking, and does not in the
least concern itself with the redeemability
of its circulating notes, especially, sacri-
fees nothing for this purpose, and yet never
suspends.
The banks of Scotland went through the
crisis of 1893 and that of 1926, when the pro-
vincal banks of England were swept away by
the hundred, and the National Bank was
forced into suspension, without any of them
giving way.
The Scotch banks do q great many things
which the bullonists of England and America
denounce. They pay interost upon deposits
| at one per cent. lower than the current rates.
They issued one pound notes freely. They
lend money on bonds with two or three
sureties When their note-holders or depo-
sitors run upon them they do not run upon
their debtors, diminishing their accommoda-
tions, or in any way increase the tightness of
the money market, but do all they can to
relieve it by extending their own credit in
support of that of their customers, and-they
never suspend! And, what is more, the
banks of England, when they are in their
worst agonies, and are ruthlessly crushing
everybody within their reach to maintain
specie payments, cannot hurt the canny
Scots, who never bother their heads about
redeemability. England can't learn. Can
we?
Just now we are bent upon resumption.
We are going to force it, We are bent, also
upon forcing another thing along with 1.-THE
immediate and rapid reduction of our public
debt, and of it's rate of interest; and to &C
complish these things we may make up oul
minds to have our will at any price to the
public interests. The use of heroic remedies
in medicine is very captivating to the fash
lie pdIl6uIS may STOdu uuuol
the treatment; lots of them may even die; but
what do they know about medicine or theil
own constitutions.
We will not now commit ourselves for the
probable effects of the Funding bill that has
Just passed the Senate. Our share of the re
sponsiblity is too small to call for either
good or evil prophecy upon it; but there are
some things among it's possible effects tina
we may take the liberty of submitting fol
reflection.
We have now nearly seventeen hundred
money agencies at work under the nationa
banking system. These are generally de
positaries of the spare cash of their imme
diate neighborhoods. They accommodate
their customers by loans, and they discoun
the debts of the people before maturity. Ii
addition, they lend their credit to the bust
ness of their respective communities for the
service of industrial production and of com
merce Can such functions as these be in
terfered with without damage to the commu
nifty beyond all the compensation promises
by the policy aimed at {?
To retnrn to the Scotch system, which ha
indicated itself by the longest and most try
ing experiences, we get hint of the worth O
the localized and distributed agencies whic
it employs. Scotland has forty principO
banks, with three hundred and forty branches
The area of the little kingdom is 32, 16
square miles, less by one-third than the are
of the State of New York, and has populf
ton quite 80 per cent. less. Scotland, there
fore, has banking Office for every 5000 c
her people; and supposing these bankin
houses to be allotted each to equal areas, an
distributed with that view, the allotmer
would place bank within four and ha