The Rutland daily globe. [volume] (Rutland, Vt.) 1873-1877, 1873-10-23
Jhe 3atland Daily Globe.
THURSDAY, OCTOBER 90, 1873.
TERMS IN ADVANCE
BANKING AGAIN.

national banks, and endeavored to show
that no rule of proportion could determine
the location or number of these institutions.
Tuesday, we briefly examined the proVls-
ions of the law in reference to the establish
ing of national banks, the amount OF cur
rency-that Is bank bills, or promises to
nay TO circulate as money-they were al
lowed TO issue. and deduccd therefrom,
or. rather. suggested that a free national
banking system would provide remedy
for these evils. We are a firm believer in
the national banking system-its monopoly
feature aside-and have no desire to return
To the old state banks. II is true that in
Vermont, state banks furnished as sound
and reliable currency ms could he 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, sage the honor and integrity Of the
managers, who maintained the solvency of
'he hanks as they would their own per-
sonal, pccunary responsibility. In the
hands of designing men, our old bank sys-
TEN could have wrought immeasurablc
suffering to individuals, as well as COM
mercial disaster 10 the business community.
With the power TO issue bank bills, with
which they were invested, they could have
ilooicl the country with their notes, and,
by convenient failures, have reaped great,
hui dishonest profits. The banking bust
ness of Vermont, fortunately, was confided
with rare exceptions, to other hands. and
her banks we're 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 rcdomp-
ton. In other states where the Vermont
system was tried, "wild cat" banking
usurped the place of legitimate business,
the country was flooded with money,
banks failed, the people suffered and the
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 "A heavy
discount, or lumber himself with gold and
silver
The national banking system has changed
all this, and moncy-Or that which repre-
sents money-issued in one state is good in
every state in the Union. Perhaps state
system of banking might lave 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 counterieits, banker, broker, bust
ness man, or individual is not compelled to
examine % bank note dotector before
daring to take bill issued by particular
bank. To illustrate We had bank in
Danny which, for time, transacted
prosperous, because legitimate, business,
and their promises to pay We're current
throughout the country. After a time, its
capital, or majority of it, was bought up
ny 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 legitimate business, and in this
case, the departure was not made so long
as the management remained in the hands
of Nermonters but when outside specula-
tors used it for their own purposes, n dis
astrous failure cnsued. 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 discreditetl, and ceased
to pass current as money. Bank note de-
tectors were 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 observa.
tion could, in nineiy-nine cases out of n
hundred, detect Il counterfeit from the
genuine but it was an absolute necessity
that they should be informed in reference
10 the value of the bill offered. which could
only he determined by the solyency Of the
institution issuing it, In this respect. too.
national banks have changed the situation.
I'elr issues are so secured rs to be good be-
You'd all possible contingency. They are.
unler all and every circumstances, worth
their face. If II national bank bill for one
hundred dollars, issued by bank located
at the lurthermost corner of the United
States, is presented in payment for debt
II 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 dstri.
button Of this class of currency, the issues
of an insolyent bank-if they can be OBJ
tanned in sufficient quantities command a
premium, for the purpose of being able,
with it, to locate Il bank in some locality
needing banking facilities. This fact fur
nishes another argument for free banking
But this is allasidc from our original pur-
pose, although, perhaps, it is as well to
close the consideration of the subject, if,
indeed, that were possible We advocate
free banking upon still another ground,
and for another reason. The whole
amount of national bank circulation is
limited, by law, to three hundred and fifty-
four millions of dollars, which is all, or
will within few weeks be issued This
does not afford sufficient currency with