The Rutland weekly globe. [volume] (Rutland, Vt.) 1873-1877, 1873-10-24
RANKING AGAIN.


the location or number of these institutions
Tuesday, we briefly examined the lrneis.sl
ions Of the law in reference TO the establiU-
ing of national banks, the amount of cur.
rency-that is bank bills. or promises to
pay to circulate as money-they were al
lowed to issue, and deduced therefrom,
or, rather, suggested that free national
banking system would provide a remedy
for these evils. We are firm believer in
the national banking systcm-its monopoly
feature aside and have no desire to return
to the old state banks. 1t is true that in
Vermont, state banks furnished as sound
and reliable currency as could be fur
nishcd by any plan whatever. and their
promises to pay circulated as money, with
ont discount from their face value,
throughout the length and breadth of the
land. There was, however, no security
for the redemption of these promises to
pay, slyc the honor and integrity of the
managers who maintained the solvency of
the banks as they would their own per-
sonal, pecunary responsibility. III the
hands of designing men, our old bank sys-
TEN could have wrought immeasurable
suffering to individuals as well as COM
mercal disaster to the business community.
With the power to issue bank bills, with
which they were invested, they could have
flooded the country with their notes, and,
by conyenicnt failures, have reaped great,
but dishonest profits The banking bust
ness Of Vermont, fortunately, was confded
with rare exceptions, to other hands. and
her banks were managed with integrity
and business honor, and their promises to
pay passed current everywhere. Net so,
however, with other states. Yer
mont, almost alone, continued
banking system which authorized the
issue of currency without an ac-
tual deposit of security for their redemp-
tior. In other states where the Vermont
system was tried, "wild cat banking
usurpcd the place of legitimate business,
the country was flooded with money,
banks failed, the people suffered and shc
managers became wealthy The natural
result was that one travelling throughout
the Union was compelled to stop in nearly
every state, through which he passed, and
exchange his money for that of the state
through which he was passing, at heavy
discount, or lumber himself with gold and
silver.
The national banking system has changed
all this, and money or that which repre-
scnts money-issued in one state is good in
every state in the Union. Perhaps a state
system of banking might have brought
about the same feeling of confidence, but
we doubt it. There is now an absolute Sc
curity for each and every bill issued. Aside
from cOunterleits, a banker, broker, bust
ness man, or individual is not compelled to
examine bank note detector before
daring to take bill issued by particular
bank. To illustrate We had a bank in
Dandy which, for a time, transacted
prosperous, because legitimate, business.
and their promises to pay were current
throughout the country. After time, its
capital, or majority of it, was bought up
by spectators, who, thereby, obtained con
troll thereof and elected officers to suit
their convenience. This was one OF the
very few Vermont banks that departed
from n legitimate business, and, in this
case, the departure was not made SO long
as the management remained in the hands
e 81 l.,
tors used it for their own purposes, dis
astrOus failure cnsucd. Their promises to
pay were scattered throughout the coun-
try, and the bills were genuine. If, how
ever, one of the bank notes were taken in
the course Of trade, some one must suffer
loss. The currency of the bill depended
upon the sOlYency of the bank. If the
bank failed, or suspended payment, their
promises to pay were discrcdited, and ceased
to pass current as money "Bank note de-
tectors were a necessity, because business
men must know the standing of the bank,
whose promises to pay were Offered him in
exchange for his commodities. So far as
counterfeits were concerned, these "detec-
tors mattered little to the general run of
business men, because their own obserya-
ton could, in ninety-nine cases out OF
hundred, detect counterfeit from the
genuine, but it was an absolute necessity
that they should be informed in reference
to the value of the bill offered, which could
only be determined by the solvency of the
institution issuing 1t. In this respect, too,
national banks have changed the situation.
Their issues are so secured as to be good be-
yond all possible contingency. They are,
under all and every circumstances worth
their face. If national bank bill for one
hundred dollars, issued by bank located.
at the furthermost corner of the United
States, is presented in payment for debt,
1t is accepted whether the bank is solvent
or insolvent, because its redemption is as
sured beyond the possibility of doubt. In
deed, owing to the inequality of the distri-
button of this class of currency, the issues
of an insolyent bank-if they can be OBJ
tained in sufficient quantities
premium, for the purpose of being able,
with it, to locate bank in some locality
needing banking facilities. This fact fur
nishes another argument for free banking
But this is all aside from our original pur-
pose, although, perhaps, ii is as well to
close the consideration of the subject, II,
indeed, that were possible We advocate
free banking upon still another ground'
and for another reason. The whole
amount of national bank circulation Is