Juniata sentinel and Republican. [volume] (Mifflintown, Juniata County, Pa.) 1873-1955, 1878-10-02
NATIONAL AND PRIVATE BANKS.

War upon the National banking system does
not Eean mischief to capitalists. II means per-
manenI harm to borrowers. producers and
laborrrs, especially in the smaller towns and
the agricultural regions. In short, the very
people who clamor most for the overthrow OF
that system. would be most harmed by it. By
students OF finance IL has long been recognized
as the peculiar characteristic of that science
that II is full OF paradoSes; the obvious truth is
usually falsrhood, and the apparently inevit-
able result is precisely that which almost never
follows. Hence il is that the shallow reasoneTs
almost always at the fault, and the
legislators and politicians who act upon will
seem to them "selfeyiient TRUTHS" and
have In view "obvious consequences" " in nearly
every case arrive at results precisely opposite To
those intended. They meant TO initiate the sur
reney when the "iree banking" clause was
fastened upon the Resumption act: the actual
result was contraction. They meant to raise
the price of silver bullion when they passed the
Silver bill; the actual result has been to lower
the price. They m-snt, by the issue OF silver,
to increase the circulation; the actual result
has been TO diminish the amount OF paper in
circulation, while the silver flows back into the
Treasury, in place Of gold, almost as fast as it
is issued. So sbey mean to strike a blow at
money Lenders and bankers by a repeal of the
Bank act, and to benefit laborers, produces aud
especially farmers. The result, If they succeed,
will be disastrous chiefly to those whom the,
desire to aid.
All over the country. under the operation of
the National Banking Act, small banks have
been established away from the chief centres,
and in places where the business would lot
suffice to render profitable bank having
advantage OF circulation. Thus the NUMBER Of
banks has been greatly increased. IN 1850
there were oniy ,563 banks in the country;
now there are over 1900 National hanks, be-
sides 633 State banks, and about $500 private
banks. and in many parts Of the cOuutry the
banks which supplied the needs OF smaller
towns and agricultural counties are almost
all organized on the National system.
This is not unnatural, for it is known
that the mode of organization, and the super
vision BY the United States officials render
these banks safer than any ever rganized un-
der State laws, and immrasursbly safer, as
rule, than the private banking houses which
start up in places OF limited business. Men
who have real capital 10 invest In banking in
such localities, and intend to use il so pru-
IDENTIFY that they need not fear the visits Of
Government inspectors, are very likely 70 pre-
fer the National system with ali its restraints
and with the advantage OF circulation, which,
in agricultural regions aud small towns, is of
more value than IN the large commercial cit
les. Because of this advantage, and because
such banks are believed to be PECULIARLY safe,
the National banks have increased ia num-
Der rapidly in localities which woull otherwise
exposed to all the risks incident to complete
dependence upon uEreslraineG and unTeg ulaIei
private banks
Let the system be abolished and the change
will hardly be ieiJ by the capitalists of the
larger cities in respect To their facilities for thu
employment or the borrowing of money.
Doubtless all the NatioEal banks now doing
business in this city or Boston, or PhiladelD Dhia,
or Chicago would at once reOrgauize under
State laws. and continue operations as
before, excepting that, alter the sale
Of their deposited bonds, they would
have little more money to lend
than before, and would be less restrained
rs to their reserves, or BY official supervision.
But while the money lender, the capitalist and
the manufacturers and merchants ia the larger
cities aud towns would probably enjoy as great
facilities as before, excepting as the destruction
OF the National system would shake publ:
credit. disorganize the machinery OF commerce
aud render less secure and therefore more costly
all its financial operations, the effect would
probably be very much more serious elsewhere.
National banks ia the smaller tow Us aud al
the county seats or railway stations OF a1Ticul-
tural regions would 20 out of existence, hu,
what would take their places! In many cases.
it Is probable, no banking institution whatever
would arise. TH- owners OF tue National bank,
holding Government bonds now Deposited Tor
circulation, oeing unable 10 dnd gu,sd mar
krt Tor them al time when thousands OF
other bankers woull Ue trying To realize On
their bonds, and finding 10 adequate employ
meut for Iheir capital IA mere drDust and dis
cOuut banking in = small place, would, ia
many cases, withdraw from the busi4ess alto
gether, preierring TO draw interest On tHeiT
bonds. Ii they Iud il Improbable 10
continue, new men would probably had It I'll
pTOataDIe 10 commence banking there. IHus
many localities would be lett altogether with
out banking facilities; surplus funds would be
ff.4f At a "A n
need to borrow would and II very much more
difficult to obtain loans from comparative
strangers. Some farmers and manufactures
would fail; some IabOreTs would lose employ
ment. Ine circulation of currency in such To-
eaii,ies would suddenly shrink, for there would
no longer be bank interested in keet lug out
its notes as far as possible. Tne Inconvenience.
aud 70 some individuals the actual loss, would
be very serious.
But in other places, the service hitherto per-
formed by the National bank would be under
taken by private bankers, perhaps by managers
OF the late bank, perhaps by new men. In
either case, there would be no security what
ever Oi the soiyeHcy or prudence of the concern,
no proof that actual capital was invested, hO
publicity of operations or condition, lao super
vision or official inspection. The door would
be opened vide TOR fraud. In all such cases,
the community would be exposed TO greater
risN; in most Cases its bankers would be
from reserves OF capital elsewhere VAS
needed, than the National bank IS now
obliged 10 pay: and in very mauy instances
reckless banking would follow removal of
restraints. And great loss 10 the community
would ensue. Ia this case, too, the currency
in circulation would shrink, for the private
banker would have no notes In keep in circula-
tion, and it would be ais interest TO accumulate
legal tenders or specie wherever MS credit
could be used instead. Ia short. precisely tie
evils which IL is most desired To avoid would
fall most heavily upon those who ciimor Tor
the abolition of the National banks. VIZ: lack
oil currency, insecurity or insuilicivlcy vi bank
ing facilities, and undue dependence upon the
fairness or integrity Of money-leuders.-Aetr
York Tribune.
GENERAL Horn, the Republican standard
bearer, has not been frightened OUT oi his hon
est mOuey position by the furry in Maine. He
clearly enough wishes 10 be elected Governor
Of Pennsylvania on a straightforward, mAniy
platform or not AZ all. He is in favor OF honest
fuauce aud rigid preservation OF the public
faith. II is SAID in tAe sac that the news irUm
Maine has strengthened the Republican leaders
in their determination to Fight nuanClal neresies
without mercy. Tnat is the eflert produced
everywhere. for the leaders are shrrwd enough
to see that when this temporary madness
passes awayit will leave the party la better con-
Gitlon han IL has been for = long time.-Ul-
Transport GGzs,ts.