The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1878-09-12
From The Boston AdrcrtiSer.]
The Banks and their Notes.

1UC Interest Vi INC i'duhS III COuDcCllOll
with the proposed substitution OF green
backs for their issues is by no means one Of
the most important considerations in the
discussion of the matter; but it is worthy
of notice, nevertheless. Its of real concern
to the Government that the change should
not DE made. Let us look at the subject in
both aspects. The banks no doubt derive
profit on their circulation, but it does
not follow that the Government could
make that profit. The banks lend the
notes at interest. 1t is assumed that the
Treasury could save interest by paying out
its own notes. That assumption wholly
leaves out Of sight the fact that the bank
notes have backing sufficient to redeem
every one OF them at par in coin, while the
greenbacks are an unsupported, and as yet
unfulflled, promise to pay. The PROPOSE
ton is that the Government, now owing
100000 OF notes purporting to be pay
able on demand, but which could not be
paid in full even il far more than the
present provision had been made for the
purpose, and which for that and other
reasons are below par, shall receive an addi-
ton OF S320,000,000 more, without addi-
tional provision for their payment. The
result would be such discount on the
notes rs would much more than wipe out
all the supposed advantages Of saving inter-
est. 1t should always be remembered that
a promise to pay is worth much or little ac-
cording as the promiser has the ability and
the disposition to keep his word. The
bank-note is worth all it professes-that il,
par in lawful money. The green back is
worth less than par. Add new promises
not to be kept to these already made and
the result could be foretold with absolute
certainty. Those who think that the value
of promise is not diminished by abolish
ing the security for it are fit to. keep COM
pany with the Greenbackers who complain
that money is scarce when men who have
nothing to borrow upon cannot get money
at all. -.-.-....-..-
Let us look upon this question from the
banks point OF view. The notes are of the
nature OF deposit. They are liability of
the bank to the holder OF them. They may
be Of much or little importance according
as the bank has large or a small line OF
deposits. A great metropolitan bank, with
millions Of money deposited by its GUS
tomers-banks or merchants-may treat
the profit on circulation as bagatelle,
while the country bank would lose very
large share OF its profits il it were 10 be
Take for contrast the statements for Octo-
Del lC11, VI OhO 1Nobioupt Dohh
OF New York city, and the First National
Bank of Comic, New Hampshire. The
former has a capital OF only 100000, no
national-bank notes outstanding, and de-
posts OF S10,S50,0O0. The latter has CAPT
tai Of 100000, national-bank notes to the
amount of Sol, 165, and individual deposits
of S1,321. Suppose the proposition TO with
draw the bank circulation and substitute
greenbacks to be successful. 1t would at
once extinguish the country bank. and it
would not affect the city bank at all. We
have taken the extreme cases, but the result
would be the same everywhere. At the date
OF the October statement there was but one
solitary bank in the city Of New York which
had outstanding more circulation than the
amount Of deposits. while the deposits in
all the banks exceeded the circulation in
the proportion OF almost eleven to one; so
that ut the worst the measure now urged
would only take away one twelfth Of the
banks profits on loans. On the other hand,
there are several States-Kentucky is one
OF them-where the circulation exceeds the
deposits. Let, it be, therefore, distinctly
understood that the measure under discus
sion IS stab at the country banks. Wall
street and State street can laugh at the i'm
potent attacks OF Congress upon their
strong banks. The little banks that do
the business tof the country towns will
suffer, &$:sa s;{;i3t atiE&,@ tses