The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1878-07-16
The National-Bank system.


The General Government. He represents /
class Of the people Of Virginia.
There IS another class that desires to see the
Did State-bank system restored, and the
State flooded with cheap money, which can
be lent out at a low rate Of interest. Asati
present advised, we are opposed to both
these schemes. We concede that 1t is posi-
BILE that at some future time the one,
or the other OF them may be rendered ne
ccssary by the fact that the General Gov
eminent will have paid of its entire debt,
and left no bonds upon which to base
banking system. But at present the coun'
try is in no danger Of falling into such a
strait. There are hundreds OF millions OF
national bonds which will not be paid for
generation; and the new four per cent.
bonds cannot be paid in less than fifty years,
without the consent OF their holders.
The first question which suggests itself is'
How does it happen, il the national banks
can make Is 3-5 per cent. net profit annu-
ally upon "the capital actually invested
that there are not more OF these banks even
here in Richmonds All OF the national
banks in this city, taken together, haven't
half the capital which was held by the banks
in Richmond before the war, when the pop
ulation Of the city was perhaps less than
half what it now is. How does it happen
that our people invest their money in ins,-
rance companies, and savings banks, and
factories, which pay only six or perhaps
ten or twelve per cent, rather than In ma
tional banks, which make Is 3-5 per cent.
Der annum ? The misunderstanding system
Is not a monopoly. 1t is as free as possible
Perhaps it will surprise good many peo-
ple to learn this fact; yet fact 1t is. Here
is the existing law:
tsection g. That section GIFT OF the
Revised Statutes OF the United states, hmlt-
ing the aggregate amount OF crcuiatlng
notes of national-b banking associations De
and Is hereby repealed; and each eAlstinS
banking association may increase its elrcu-
lating notes in accordance with existing law
without regard to said aggregate limit and
new banking associations may be organized
in accordance with existing law Wlthoutre-
spect to said aggregate limit"
The fact thus seems to be that people are
not very anxious to make these immense
profits. Perhaps the milionaires OF New
York, Boston, Baltimore, and Philadelphia
do not know that they could make Is 80
per cent. profit annually by investing their
money in national banks. They are not
posted!
Again: There must be a mistake as to
the statement that the Government pays
Oet us come down to facts) the First Ma
tioual Bank OF Richmond S26,6G7t annually
for issuing S4sO,0O0 Of notes which the
Government could as well issue, and there
by save that amount of interest. Let us
suppose that the Government determines 10
tax that banks issues and so drive all It's
circulating notes out OF existence. VIII
the Government save the $4,000 OF interest
annually due upon the bonds? Certainly
not. The stockholders would hold on TO
their bonds, or sell them TO somebody else
that would draw the interest. Ii the
Government were to undertake. to
pay for them in irredeemable green
backs, the bonds would rise so far above
the par .6f such greenbacks that the peo-
Die would lose ten dollars for every one
that the Government would save; and il
the Government were 10 undertake to pay
for the bonds in redeemable greenbacks as
good as gold and silver, then it would have
to issue new bonds in order to get the spe-
Gle, though it might as well let the old ones
stay out. OF course, the Government could
make money by repudiating its bonds and
notes; but this our correspondent is OPP
posed to. He would take no mans bonds
without paying him their par value in spe-
Gle or its equivalent. At present five pei
cent. bonds are worth from $1.06 to SLOT
in gold. The Government couldn't make
much money by buying them with green
backs and paying their full value; for with
the issue OF every one hundred million dol
lars OF new greenbacks their price in gold
would decrease rapidly. 1t would appear,
therefore, that there is no way for the Gov
eminent to save money by purchasing its
bonds now due with its own greenbacEs
and as to the bonds not due-and many
will not be due in our day-they can't be
redeemed even in gold without resortinS tc
reputation.
But il it could, would it be wise for the
Government to put down the banks, and
furnish the currency itself? II we have
not half enough money now invested in
banking associations, it is easily to be In.
ierred that we should in the case supposed
have none. People are not going to do
banking business for fun. nor merely fol
public accommodation. Some OF our Vir-
ginia papers are complaining every week
that in Virginia there is woful deficiency
OF banking accommodations. How would
it be il The banks had to bank upon green.
backs? We need not make a prediction. We
will 60 on, however, to say that national.
bank notes are better currency than green.
backs. The greenbacks might and would
depreciate at once if the Government were
to get into war with a powerful nation.
But the national bank notes have a margin
OF one.ninth Of their entire volume as a
safeguard against depreciation; and not
only this, but all the surplus funds and
other assets OF the banks. Why does not
England use greenbacks instead OF Bank-of-
England notess Has that greatest nation
in the world to learn finance Of the United
: States of America? Wbowill say SO?
There could be no stability in business if
JOHN SHERMAN and his successors in Office,
or THOMAS EWING and BEAST BUTLER and
their successors in Congress. were allowed