New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-11-25
FREE BANKING.

TEN AZ COMPARED WITH THE OLD e'
,,rr STATE OF NEw-YoRK-THB foRNIH SIS
MONOPOLY THAN ANY NATIONAL eA'i M EVER
.,1r,,op,zrD-Tur PROFIT ON ThF. NATIONAL
-, o,,,g,,, .rroS sMAII,-pRoPc,sED NEW sYs-
TIM or REDEMPTfoN-sfhNiN fA'HhENi' -
s.py TO FREE BANKING.
xc ,srrycroS Nov 24-The forthcoming report
-, ,he Controller Of the Currency contains the 'oi
sewing on the subject of free banking:
The restraining law OF the State OF NewforK ac' Vi
nr a. lsa provided that at shall not be aWiu lot any
crson association OF persons or body corporate op
and after the Is day CT August next TO keep any oee
%, dsoost for the purpose OF diseountlng proussoiS
It. or for carrying on any kind OF banking business
y operaons which incorporated banks arc authorized
nv law TO carry on issue any bills or promisory notes
A. prvate bankers unless thereunto specially author
,zed by law" This law placed the whole banking inle
ests OF the country the hands Of few chartered IN
stutions and was In its effects grievous monopoly
Most Of the States OF the Union organized ny
special act Of Legislature trust companies savings
banks aud other corporations. The Bank OF England
and the private banks and ontstoek banks OF Engahu
organized prior 1914 possess the right 10 Issue eeu
lsop and tpo such right has been granted to other
examinations since that year. AL such favored nsutu
hons are mOaopoles but it cannot be said that tne
National banks Of the United States are monopoAes IN
tic same sense OF the word
TIE ORGANIZATION OF NATIONAL BANKS
The organization Of National banks has from inc
neeipning been open 10 all, and, until the amount OF
circulation authorized by Congress was exhausted al
applications with proper Endorsements eerui@hR p"
he means character OF the applicants fot the organ
,tou OF such Institutions with circulation, we're CON
sdcred and granted and the aggregate Of circulation Tor
which applications on file in this Office the con-
.dersop Of which has been postponed does not exceed
100000 That the banks which were first organized
were profitable to their shareholders IS conceded and
cause Of congratulaon that the surplus earnings OF
those years husbanded in the surplus fund OF more
nam m 0eOOkttOrE
creditors in anticipation Of tunes OF panic and disaster
The statistics present show that the earnings OF
the banks OF late years have not been excessive ana
In many cases much less than the earnings ana dl
hends which the shareholders Of manufacturing rail
road and other corporations realize from the capital
invested. II the National banking system, under
which two or more National banks have been
organized IN almost every city and thriving village IN
che Union aud where the earnings OF business men ana
ine savings OF the people can be deposited vita
greater degree o. safety than under any previous
system any monopoly 1t is not the fault OF
the system but an evil which arises from the existing
state Of the currcnoy and it is believed that the Ma
toDal banking system is in every sense less monopoly
any National system OF banking ever before author
bed The system considered monopoly because II s
supposed that large profits are derived from the PRIV
sTcp1t T5e ACT Of March H. is7O authorized an add
ional issue OF t5i,OOOOO0 Of National bank notes,
but the whole amount has not yet been issued chiefly
was assigned there is but profit the issue OF such
notes as be hereafter; but because 1t is errone-
iaIon to organizations Of this Kind the demand for what
termed free banking may be to large extent attrlD-
uted.
The restraining act Of the state OF NewYorS as has
been seem prohibited individuals and associations from
carrying the business OF banking without hrst Obtain
1nR special charters from the Legislature. rms
law repealed about 80 years after its passage,
not without eneounteIing bitter opposition. IN
the year following the repeal the general
authorized system based on the deposit Of securities
lIe banking a
large extent from the fact that i superseded the
monopoly which preceded it, The phrase free bank
sng" however used is not clearly defined, for
There nothing in this country to-day more free than
banking Every individual or association OF individuals
throughout the country has the right TO negotiate
pr0mssory notes drafts, and bills OF exchange, TO re-
ceve deposits, 10 loan money upon personal or real
estate security and TO transact almost every kind OF
n'lTe :e GGoa6t hat the term Tree banking
G many RrsSaS issue Of bank mofes
20 any association OF persons organizing National
aes bonds as security but there but few persons
who have given any considerable attention to this sub
issue National bank notes TO the amount OF the public
AZ free banking would be an issue OF paper money Wlch
should be promptly redeemed at the commercial center
such currency may be divided into three classes
Tiysl An unsecured circulation, redeemable at par by
secured circulation redeemable at its counter at
par ana ~ the commercial center a fixed rate OF dis
count aud, Third a circulation eXchangeablo at par
for awfnl money at It's own counter and by It's agents
me currency OF the New-England States previous to
she fair example OF the rst class. That system
saok Bank at Boston compelled the redemption OF the
OF the NewEngland banks at its own counter at
DIV, as banks could only be organized under special
charters obtained rom tue Legislatures OF The six New
England states This circulation required TO be
secured by any deposit pledged for that purpose and
the faluyc OF the banks in some Of the New England
States which not mfrequeutly happened almost
always resulted IN great loss, not only
The saGok Bank al Boston forced the redemption Of the
notes par it, counter, by system OF asserting
and returning the notes TO the place OF ISSUE but the
Per IN New-York. The notes Of these banks
wherefore neither safe eXchangeable AZ par coin
system ofree banking example OF the second class
Of currency and probable That the more thoughtful
advocates OF what Is termed free banking proposed
circulation shall be issued redeemed under the
National Currency act upon similar plan
CONTRAST.
Taking IL for granted that advocates OF free banking
base arguments upon the OF the system
authorized that State by the act OF April it
may Do wcll 10 the condition Of the currency
and Of the public debt at the time OF the Inauguration of
that system al the commencement OF the war and
TIE currency OF the State Of New.York first issued
secured by stocks OF the different states and by
bonds aud mortgages deposited by corporations with
the Controller Of the state subsequently, by various
amendments the law was so changed as TO provide for
of the United states and OF the State OF NewYOrk ana
that waA basis az the time Of the breaking Of
the war. Al the tme o. me Inauguration OF the system
the debt Of the United states was <0i3422 and ali
funded debt OF the United states was s44974O9l The
authorizing the issue OF circulating notes were
lbon and the OF discount in the SewYOrk mar
Set upon the bank notes issuedsand IN general ciTcua
lstOn varied nom Onceghth OF one per cent to one and
ouehaf per cent discount while many bank notes that
had local circulation quoted at from five TO ten
Eew-England banks only circulated throughout the
whole Union like the National bank currency Of to-day
Tie funded debt OF the United States to-day Is forty
times the amount O tine debt In 1850 Then the United
md fhf