Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1874-10-08
r,ha National Es:suking System.
ALEXANDRIA. VA, Sept. 50, 1874

D,uieI n, Lone2ou, esq.,, 6a Broudtc.W, ~. l.:
DEAR SIR:-I have observed the various
suggestions for Il conference of the friends oil
the bill prepared aud advocated by you IN
series OF very good letters, for establishing ana
managing an Exchcqucr. have no doupt'
that, if honestly administered, 1t would be a
most valuable institution for the couutry-pos-
sessing, as it does, system OF well oaiauceu
checks and guards. 1t would not only facilitate
the resumption of specie payment, but would,
at all times, be OF immense service to the busl-
ness interests Of the country. Ol course the
! snuurstcd conference OF the friends OF the F'X'
chcuucr would be cmiuenlly proper, Tor 1t Is
only by IL friendly Interchange OF views that the
countrv can examine into the merits OF The
uropositou, and decide what Is best to be done.
| suppose ii would be sinful to say by way OF
COMMUNICATION, that, Ike the Old United States
| Bank, it would facilitate exchanges, and cheap
| en- the rates for money You need never ex-
| pect cheap money under our present National
| Banking System. Established during the war
for the purpose OF facilitating the sale oil United
States bonds, they have had big taste OF
| blood in the shape If high interest, as fully
shown by their profits aud SURPRISES. In my
opinion you can never have moderate rates ior
money while they exist Circulating Dotcs are
Of little use or value TO the banksln large cities,
their profits being chiefly derived from de-
posts and although there are honorable cx-
cep,ors, their business, TO 4 great extent, cou.
sists of loans on call upon coliatcralS Instead OF
discounting the business paper OF merchants
traders, and manufacturers. Stock spectators
who nomnay buy and sell in one day stocks
enough to swamp Il State, get i.c-i.y al! the
money which should be used to foster The HON
est, legitimate business OF the country, which
is thus, ON the contrary, kept IN a state Of con-
| slant uDcaSiness, confusion, and alarm, IN times
| of strpgency. These banks arc the first, 10
such times, to cry OUT and squcal, and arc al
WAYS miserable reliance for the real business
men. This have known for thirty years past.
Did you ever know panic or monetary pres
sure to occur which did not find that the great
er part OF the banking capital OF New ork
! Including that Of the country banks) was III
the hands Of brokers' and ShyStcrs?
| think that ius!ead OF having our Circulation
composed OF the notes OF 1900 National
Banks, it would be vastly better that the United
| States government or an EXchequcr should Is
sue it. Then when trouble came there would
be universal feeling Of security in regard to
it; certainty that ii would DC we'll taken care
of by great government fully able to do so.
| This feeling would put al cud to panlcS among
the note holders Bcsilcs the saving in inter-
est on the notes would enurc to the people 5
benefit through their government.
had occasion, in March last, to make an
| examination OF the twenty-five National Banks
in Virginia, Which resulted in the following
summary, viz:
| Capital S5.oSo,ooo
| &. S. bonds held, 3,GSl 900
| Loans and discounts, I,IO2,S09
DEPOSITS. G.727, lGS
Circulation, 2,SI9,SOi
OF the bonds held, $4G0,000 Was Tor
| United States deposits, and the
| residue, 1921 900, was for Sc
curity of their circulating notes to
| the amount Of ~ per cent OF tho
bonds held, making difference Of 3322, 100
| Add to this the premium, - per CT, 4S3, 80
| Reserve per CT. On cirCualUn,
| aud 10 on deposits, ! ,l5",065
81, 9jS, 3l5
Showing that under State, instead OF Ma
tiona charters, and without Il dollar OF crcua-
ton, the banks would have the use OF nearly
two millions now absolutely locked up and worse
than useless. This would be great advantage
to our people What would it be when the
time shall arrive that the ten per cent tax OIL
circulation shall be taken off, aud our banks be
free to circulate their own notes?
Does anybody wonder at our dependent stu
alton? II great commonwealth that before 1851
had over titccu millions Of capital aud thirteen
millions of circulation. | don't pref rud to be
entirely accurate, bus anu not far wrong, it at
ALL
feel confident in saying that the Natiooal
Bank system docs not suit Virginia. The Comp
trolcr Of the Currency, in his report to Con
gress of December !, 1873, says that the profits
OF bank in the South and West its circulation,
is but little over one per cent.
With great regard your obi. serv't,
LEWIS MCkENZIE.