The Anderson intelligencer. [volume] (Anderson Court House, S.C.) 1860-1914, 1878-02-28
Banks and Banking.

The bill to restore free banking to the
country, lately introduced by Senator M.
g. Butler, has met approval and encour-
agelnent in every direction, notably in
the Southern States. 1t is especially
gratifying to find such commendation
coming from o quarter where interests
and habits might have been expected to
create opposing tendencies. In q recent
letter to the Raleigh Observer, we find
quoted the remarks of a prominent Off
cial of one of the leading national banks
in that city. He lis represented as e1-
pressing hearty concern for the restora-
ton of the old State banking system as
one, among other commendable features,
better suited to the habits and practices
of our people than any other; but above
NIL, aH having the qualities of economy
in management by which aid is given to
the operations of business at reasonable
charges. He says that money could be
easily loaned by such State banks at
rate Of interest not exceeding 6 per cent.
per annum; whereas the national banks
cannot or will not agree to accept q less
rate Than II per cent. There are many
reasons for this. Among others, the cap
ital invested in them is largely foreign;
consequently, there is not the slightest
tie of sympathy between lender and bor-
rover. Again, these banks are restricted
by their constitution to circulation not
so large as their capital stock, which is
frivolously small 10 proportion to the
needs. of business. Their ability, there
fore, to enlarge their powers of accommo-
dation is dependent upon deposits. De-
positors expect to draw interest upon
their money, and this is added as an ad-
ditional charge upon the borrower. This,
then, with the ordinary items of expense
incidental to banking operations, increas-
es tho inability of the national banks, if
it wee their desire or policy to do so, to
make loans at less rate than II per
cent. And the national banks do not
look so much tc loans as the principal
source of their profits as to buying of
exchange, and such operations as we're
once the peculiar province of commits
sion houses. If they had the amount of
currency needed to give ease to the coun-
try by liberal loans, it is not their policy
to use it in that way. The whole system
is not in harmony with the customs of
our section.
Th, State bank system had its defects
and might have had its abuses. Expert
ence Of these in their past history would
probably avoid recurrence of them,
should they be revived. For this there
Is an urgent demand. With the rcscind-
ing of the tax which now represses them,
they would spring again into existence.
They would invite rs capital the hoard
ings md the earnings of the thrifty who
look for safe places Of investment. They
would attract the capital of the more
prosperous, which hesitates to go abroad,
which il distrustful of manufacturing
ventures, but which will not put conf
dence in the national banks, owned and
controlled abroad, and complicated in
the destiny Of all similar institutions over
the country, all trembling in accord at
one breath Of disaster, all shocked BY the
same calamity which assails any one of
them, even The most remote. The State
banks, restored to their legitimate func-
tions, would isdue their own currency,
discount literally as the chief source of
their profits, and at once give relief to
the people of the State or the whole
country. Supposing that their notes will
be little below par, that will not impair
their capacity for home usefulness, and
in the transmission of funds abroad the
premium demanded will be paid more
easily than present bank accommodations
are now had.
This relief in connection with the pas
sage of the silver bill would seem to our
comprehension all that is needed to re-
store prosperity to the South. A larger
circulation ne must have, and that we
will never have, dependent upon the
national banks alone.