The Richmond palladium. [volume] (Richmond, Ind.) 1855-1875, 1873-12-06

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1Opolies in the same sense OF the word. The
of national banks las, from the {
beginning, been open to all, and, uGtil the |
amount Of circulation aui horized BY Congress |
wss exhansted all apple stions vi proper | !
indorsements certifying 10 the mess and
charaetersos the applicants fur the~o*ganiza-
tions Of such INSTITUTIONS with circulation.
were considered and Granted, and he .ggregate
ON file In this ofiier, the consid rat on + which
has been postponed, dots 10. exc d BIC, 600,
600. That the banks VIII ch were first rgaHized
we're profitable to tn -ir shasehold rs is conced
ed, and it is cause OF congratulation that the
surplus earnings of those years are hus anded
In the surplus fund Of more III n $120, 000, 900
as protection to depOsitOrs aud Ct editors, In
anticipation of times of panic and disaster. |
The statistics we present show that the earn
ings Of the banks Of late years have ct been
excessive, and in many cases much less than
the earnings and dividends which the share
holders of manufacturing, railroad, and other
corporations realize from the capital invested.
II the national banking system. Under which
two or more national banks have been or
ganized in almost every city and thriving vii
iage in the Union, and where the earnings OF |
business and the savings OF the pecp.e can be |
deposited with greater degree OF safety than
under any previous system, is in any sense /
monopoly, it is not the fault Of the system, but |
an evil which arises from the existing state OF
the currency, and it is believed, that the ma
tioRal banking system is In every s. ms less
ever before authorized. The system isconsider
ed monopoly, because it is supposed that large
profits are derived from the privilege of issu-
| ing circulating notes. which is limited IN
amount The act of March II 1870 author
lied an additional Issue of $54 600 600 of ma
| tional bank notes; but the whole amount has
not yet been issued, chiefly for the reason that
In the States to which they we're assign ed there
10 but little profit in the issue OF such notes, as
| win be seen hereafter; bus because i. is erro-
neously believed that large profit accrues
| from circulation to organizations of this kind,
| the demand for what is termed free banking
may be to q large extent attributed. The Re.
straining act of the State of New Y ork, as has
been seen, prohibited individuals and assvcia-
lions from carrying on the business of banking
without first obtaining special charters from
the Legislature. This law was repealed about
thirty years after its passage, not without en-
following the repeal the general banking
system Of the State of New York was au
taorized, q system based on the deposit
OF securities with redemption at fixed rate
! of discount, and it is probable that the term
free banking" originated, to large extent,
from the fact that it superseded the monopoly
. which proceeded it.
The phrase free banking, however, as now
!: used, il not clearly defined, for there is moth
ing in this country to day more ir, 9 chan bank
I ing. Every individual Or association OF indi
? viduals throughout the couatryt has the right
, to negotiate promssory notes. drafts End bills
u Ot eXclangt; To. lcceLVC -0CpCe1ss, TO lOan
8 money upon personal or real estate security,
I and to transact almost every kind Of business
q pertaining to legitimate banking There If
t little doubt that the term free banking" BY
d many persons. is understood to mean the unre
etricted issue of bank notes to any association
It OF persons organizing a National Bank ane
o d. posting the required amount of United
: States bonds as security. but there are
but few persons who have giveI
any considerable attention to thi,
/ euhioct who willing n advoeata fht
= unrestricted issue of National Bank notes to
: the amount of the public debt. 1t is probable
!, that more satisfactory definition of free ba k
: ing would be an issue of paper money which
!. | should be promptly redeemed al the CONNER
3 cial center of the country. Such currenc.
. may be divided sinto three classes-first, al
= unsecured circulation, redeemAble at par by tn
= bank, or it's agent, at some designated city
second, q secured circulation redeemabie at it
own counter at par, and at the commercial
center at fixed rate of discount; and third,
circulation exchangeable at par for Lawful
money at its own counter and by its agent
appointed for that purpose. The currency o
the New England States previous to the war i
t. fair example of the first class. That syste
Q, WAS generally known as the Suffolk sys
o. tenn, because the Suffolk Bank, at BOs
81 ton, compelled the redemption of the note
of the New England banks at its ow
ae counter at par. The system, however, was no
q. free. but q monopoly, as banks could only b
q organized under special c arters oatair fror
u o.
ne This circnIation vas NOT renni,, g, he aecur.
OF hv anv denosis nledred for That purnose. an
ae the fsiinre of the han, in ON of the Ne
ne ENGLAND States which n It n, fr oueatjv ha,
| nened. almost always resulted in Qr AZ loss. nj
q, nnlv to the creditor. hui to the oil hoide
r. The snffolk Bank. nj Boston. forced the r.
ne demp,ion Of the notes at par az its own count,
* bv 4 system of asserting and re- urninr Il
~ notes to the place of issue. bus the same not
UI we're in yariablv At discount OF ope-eighth o.
n ue cent. in New York. The notes of these BAN
SCa we're. therefore. neither safe nor exchanpeab
no AT mar or coin At the chief commercial cente
m ~-z1-----~117 al--f
rs THE NEW YORK BANKING SYSTEM.
" The New York State system of free bankil
gu ia an example of the second class of currenc
,iA and IL is probable that the more thoughtful 4
ltg yocates Of what is termed ssfsee bankinQ' pr
posed that Circulation shall be issued and /
.S So deemed under the National Currency act up
~, ~ similar plan. Taking it for granted that
~ yocates Of ssfree bankingn base their arg
~ ments upon the success Of the system authc
yes ICED in thst state nv Act OF April is. 1874
3D. -. - -ou - oo,sx.,ct %ho corait;o,- - /