The Hillsdale standard. [volume] (Hillsdale, Mich.) 1851-1909, 1877-09-25

soune Financial Facts which CIatm
the Public Atteation-A few Hard
Nuts for the supporters at the
Greenbncks and "More Money"
Wen 90 Crack.

Nuts for the supporters at ths
Greenbncks and "More Money
Wen "a Crack.
The "Free Banking Bill" was ex.
pected by it's advocates TO be Of incal-
culabls benefit To the country, aud
particularly 10 the Western and South
ern States. Prior 10 it's passage these
States had been continually excited by
demagogues with the notion that they
had besnlwronged, and even robbed by
Eastern States in the distribution OF
bank circulation. IL was represented
that the six New England States, New
York New Jersey, Pennsylvania, Mary
land, Delaware, and the District Of
Columbia, had a bank circulation
amounting to S235, 900, 900. while the
vast population aud area outside OF
those States, extending from the Poto-
mac to the Gulf. and from the Allegha.
ny Mountains 10 the Pacific Ocean. had
a bank circulation OF less than Sll9.-
600, 900. This difference demagognes
ascribed 10 the greater influence of
Eastern Stats in shaping legislation,
aud TO the superior readiness OF East
ern capital 10 seize the advantages Of
fered by the National Banking Act.
IL is quite unnecessary now 20 refer 20
the arguments by which this notion
was combatted. The inexorable logic
OF events may be trusted TO correct
such errors, aud perhaps il may even
force some Western infiationists TO adj
init fact or two. Experience is a
harsh and costly teacher, but people
who will learn nothing elsewhere gen.
orally learn something in that school,
and il is within the limits OF possibili-
ty that even Gen. Ewing or Mr.. Crary
OF Ohio may have obtained some in
formation from the practical workings
OF the free banking system. IL has
been in operation quite long enough 10
test its quality. ANY bank has been
permitted 20 surrender its circulation,
hy depositing legal tenders for its re-
demption, and any existing bank, or
any newly organized bank, has been
free TO enter into the enjoyment OF the
"grinding monopoly" which, il was said
the eastern banks possessed, by depos-
iting the usual proportion OF United
States bonds as security. Indeed. as
the Eastern banks had TO deposit per
cent. bonds at the organization OF the
system. while new western banks have
been recently enabled 10 organize by
depositing 4. or per cent. bonds, the
apparent advantage has been largely in
favor Of the new organizations.
Since the latest annual report OF the
Controller OF the Currency. the New
England banks only have gaine1 IN CIR
culation. The monthly reports do not
give 10y States the amount surrendered
in hank notes, but the amount of cir
culation retired previous deposit OF le-
gsl-tenders during the ten months has
been only S2.l92, ,2l0, while the new
circulation issued 90 New England
banks has been 1902. .745. This gain
of 81, ,s77, 535 would doubtless be some
what reduced il the bank-notes sur
rendered were included in the state
ments. The Middle States have lost
IN circulation, but not largely; the le-
gal tenders deposited and afterwards
exchanged for notes amounting TO go,
295. .Oo5. while the new circulation
amounts To g., 1863, ,345. The net result
in all the Eastern and Middle States Il
a gain OF s9i6, 900 in circulation, exelu.
siyeof notes surrendered. But there still
remain on deposit, for retirement OF
notes when presented, $3.50, 400 in legal
tenders from New England banks, aid
1887 500 from banks Of the Middle
States. Meanwhile the net loss oi
banks Of Southern States has been 81 -
733, S95, aud Of banks Of the Western
and Pacific States (Missonri included)
3, ,G96. .6S5. and the banks Of thes,
States have still on deposit, for re-
demption OF their notes. SS, FOG, ,52l
Since November /, 1876, therefore, tn,
Western and Southern States have vol
unfairly surrendered 80, 430, 600 in cir
culation while the Eastern and Middl,
States have gained S9i6, 600, and TIA,
Western and Southern States still have
on deposit for retirement OF circulation
SS, ,706, 900 in legal tenders, while the
Eastern aud Middle States have 81.
53s, 900.
Since the passage Of the act of June
20, 1874. the change has been greater
but in the same direction. At the las
annual report proceeding that date, the
I Eastern States had in circulation Sll0,
4S9, 966, aud now have about Sl2.52s.
279, a gain OF 100000 The Middl,
States have reduced circulation from
/ sl2a, COS, l39 TO about Sll0, 752, 1881 (
| loss Of sl3, 800. 900. Meanwhile, til,
Southern and Western States combin
ed have reduced circulation from 8 lS
$40. l30 in 1873. TO S92, 10. 29l in 1877
loss $40, 100, ,S4S. aud OF this losi
about sl9, ,700,0 900. has been in th'
/ Western States. In addition, there re
u mains, as before, the excess of lega
/ tenders from the West aud South, nov
on deposit for retirement Of bank-notes
This experience teaches that Eastern
statesmen we're moved in opposing th,
/ free banking system, not by the greedy
/ desire TO secure a monopoly Of circula
ton to the banks Of the East, as wer,
then claimed, but by the clear percep
ton Of the fact that the Western anC
Southern States, being naturally bor
rowers at high rates OF interest, woul,
rapidly surrender circulation IL thel
had the opportunity. In those State
capital can often be employed will
safety higher rates OF interests thar
National banks can earn. In the East
ern and Middle States, but especial,
in New England. a large capital fud
no other more satisfactory employmen
and the issue OF circulation 10 New En-
land banks 10 be afterwards loaned 4
the West has been one OF the promi
uent results OF eystem which its adyO