Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1878-09-02

city, or Boston, or Philadelphia. or Chicago,
would at once reorganize under State laws, and
continue operations before, excepting that,
after the sale of their deposited bonds they would
have little more money to lend than before, and
would be less restrained as to their reserves. OF
by ofhcial supervision. But while the money
lender, the capitalist and the manufacturers and
merchants in the larger cities aud towns would
probably enjoy as great facilities % before, ex-
ceptnR - the destruction of the national system
would shake public credit disorganize the ma.
chinery Of commerce and render less secure and
therefore more costly all its financial operations,
the effect would probably be very much more
serious elsewhere.
National banks in the smaller towns and at the
county seats or railway stations of agricultural
regions would go out of existence. but what
would take their places In many cases, 1t Is
probable no banking institution whatever would
arise. The owners of the national bank. holding
government bonds now deposited for circulation,
being unable TO find q good MAJ ket for them at Q
time when thousands of other bankers would be
trying to realize on their bonds, and finding no sde
quate employment for their capital in mere deposit
and discount banking in q small place, would in
many cases withdraw from the business altogether,
prefefrlng to draw interest on their bonds.
1T they lind IL Improbable to continue, new men
would probably hnd it Improbable TO commence
banking there. Thus many localities would be
left atogethe without banking focitles surplus
funds would be deposited at more distant towns,
and those who need to borrow would lind it very
much more difficult to obtain loans from compare.
tive strangers Some farmers and manufacturers
would tail some abOrers would lose employ
The circulation OF currency III sucn localities
would suddenly shrink, for there would no longer
be a bank interested in keeping out its notes as
far as possible. The inconvenience, and to some
indiv duss the actual loss, ould be very serious.
But in other places, the service hitherto per-
formed by the national bank would be undertaken
by private bankers perhaps by managers Of the
late bank. perhaps by new men. 10 either case,
there would be no security whatever Of the SOL
vency or prudence Of the concern, proof that
actual capital was invested, NO publicity Of opera
tons or condition, no supervision or official in
spection. The door would be opened wide for
fraud. In all such cases, the community would he
exposed to great risk In most cases its bankers
would be obliged to pay more for money, when and
from reserves OF capital elsewhere was needed
than the national bank is now obliged to pay; and
in very many instances reckless banking would
follow removal Of restraints, and great loss to the
community would ensue. Ia this case, too, the
currency in circulation would shrink, for the pri
vate banker would have no notes to keep in circu-
lation, and it would be (. his interest to sccumu
late legal tenders OF specie wherever his credit
could be used instead. In short, precisely the
evils which it 10 most desired to avoid would fall
most heavily upon those who clamor for the aboh-
ton of national banks viz lack of currency, iu-
security or insuficiencv of banking facilities, and
undue dependence upon the fairness or integrity
Of money lenders.