Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1878-04-09
IlailH Atnncbct soaral'
AU e. q ~ ia.
Tuesday Morning. April 0, 1878.
National Banks.


which they rest may not be without its
faults, hut has proved the best this country
has ever seen Previous 10 the organiza-
ton of the national banking system. the
paper currency of the country was issued
by State banks. These were unstable. un-
safe institutions, whose failures were nu-
merous. When one went down the loss
fell heavily upon the community, reaching
from city far out into the country. where
eyer the bills of the bank were hell. Our
own State had its share of broken and
worthless State banks. which robbed the
farmer and laborer when they went down.
But no farmer or laborer in Maine SO far
has lost dollar by national bank. They
may he mismanaged and fail. but their
notes are perfectly secured, and must he
paid TO the last cent.
The merits OF the national banking sys-
TEN, beside the security OF the circulation
of the banks. are many. Ii is "A free sys-
TENS. and is not open to the objection OF
other banking systems, which are monopo-
lies. Its restrictions are numerous and
burdenso,nc, and its penalties severe
The profits to the stockholders for the last
five years have not been as great as the
system of State banking which preceded
it, The statistics which it furnishes to the
plete and accurate than any that have ever
been made in any country under previous
systems, and all efforts to obtain similar
statistics of The condition of the State In.
stitutions now in existence have proved
unavailing. While the failures of State
banks and savings banks have been nu-
merous and the losses enormous. ii is esti-
mated that the total losses to creditors
from the $500 national banks organized
during the last fifteen years have not ex-
ceeded Sc 100000, an amount probably
not equal to the losses whiclpshave fallen
upon the creditors of savings banks and
State banks during the past year.
The national banks have accumulated
a surplus fund of more than $l20,000.000
under provision Of law which requires
that one-ienth of the net profits of every
bank should be carried to the surplus fund
until the same shall amount to 20 per cent
of its capital. The amount of the surplus
is now more than one-guarter, or % per
cent. Of the capital, and is fund to which
losses and bad debts are chargeable. This
fund was chiefly accumulated during the
prosperous period which followed the ter
mination Of the war; but the amount has
been decreased more than II 900, 900 dur
ing the last two years. II the present sys-
tenn should be discontinued, it is probable
that the present surplus fund would be dis
tributed among the shareholders. and 1t is
not probable that under any future system
so large a surplus will be accumulated for
the safety of the creditors of the banks.
The only reason advanced by the advo-
Gates of the repeal Of the system i. that
money may be saved to the government
by authorizing II to issue The circulation
now furnished by the National banks. If
is generally supposed, it is not to be pre-
sumed that the banks would voluntarily
surrender the source of such great profit.
Yet the banks have given up $5O, O00, 900.
The system has stood fifteen years, dur
ing the most trying period of our national
history, and now the greenbackers pro-
pose to abolish il and give Congress. the
right to issue currency. to be forever r.
redeemable. and to be u never-ending sub
ject for agitation in every Congress by
cheap demagogues, hampering and i'm
periling business and keeping up the state
of uncertainty and confusion which has
been distracting our country for several
months past.
The circulation of the national banks is
but little in excess of $500, O00. 900, to Sc
cure which they hold government bonds
to the amount of 1885,, 900, 900 This
makes their bills absolutely secure, and if
the government resumes specie payment
next January-which it will if the nfla-
tionsts in Congress do not prevent-then
every dollar in national bank bills will be
as good as gold dollar, while the curren-
cy proposed by the greenbackers will not
command gold because it will not be con-
vertible, it will be but promise to pay
to be redeemed by another promise to paw
and finally to end in financial disaster like
the schemes of John Law, the French as
signals, the old Continental currency Of
the United States. and all other plans of
similar character which have ever ex listed
Mission of the Republican Party.
The Albany Journal in commenting
upon the caucuses recently held at Wash
ington to consider the best policy for the
republican party, voices the universal SEN
timent OF the party in the following
words
The republican party is the sole hope
OF the country against the giaspipg South
ern claimants aud the reckless Northern
repudationists. 1t is the only bulwark
against the dangerous alliance of a Solid
South with the demagogism of the North.