Grant County herald. [volume] (Lancaster, Wis.) 1850-1968, 1879-10-16

national bank system we have gone through
great civil war, with all its vicissifudes:
We have gone through period of headlong
speculation and recklessness in the CON
traction of debts; we have gone through
terrible financial collapse, with widespread
bankruptcy and general business depres-
sion. During ali that time until the LIST of
July last year, all the losses suffered by all
the creditors OF all the national banks in
the country amounted to only $6.4l5, 43S,
and these losses are constantly reduced by
dividends paid in the winding-up process
No banking system in the history of this
country, nor anywhere in any country, can
show such a record for safety under such
circumstances. The one failure of the City
of Glasgow bank, in Scotland, last year, in
hicted upon its creditors q loss of S26 O0O.-
000-a loss four times as great as the aggre-
gate losses suffered from all our national
banks during the sixteen years of the exist
ence of the system. La this country the
losses inflicted upon their creditors by state
and savings banks in the year 1878 alone
were larger than those ever caused by
national bank failures since 1862. The
losses from five state banks in the one city
OF Chicago during two years preceding
1873 amounted tc more than one half of all
the losses from all the national banks since
their organization from Maine to California
and from Oregon to Texas. / repeat, no
banking system of similar extent in the his.
tory OF any country has as Brilliant record
as this.
To what is so extraordinary result due 7
To the wise regulations of law under which
the national banks are organic ed, and to
the strict supervision by the government to
which the law subjects them in the conduct
OF their business. | will not say that the
s..nr IS l..
not be improved. But / do say that they
have proved wonderfully effective thst they
are more perfect than anything we have had
so far, or anything we are likely to have,
should the national banking system be
abolished. There is a system at last under
which the possibility of
SHAM BANKING is REDUCED TO A MINIMUM.
One of the greatest abuses of former bank
ing systems, the organizati, of banks of
deposit without sufficient bona f de capital.
is prevented by the provisions of the ma
tional bank act, that the capital stock of
the national bank must be fully paid in,
and restored to its full value after impair.
ment, in failure of which receiver is
appointed by the comptroller. And hence
the striking fact that in our national banks
the existing ratio of capital to liabilities is
nearly four times, and that of Gem bined cap.
ital and reserve to liabilities morc than
three times, greater than in the ,216 banks
in England and Wales. This is not all. Every
operation of the banks and every change in
their condition, is by the law so vigorously
subjected to the scrutiny of the government,
and SO freely exposed to the public eye, that
such collapse as that of the City of Glas-
gov bank is simply i'm possible, and the de-
positors cannot be robbed even on smaller
scale, except by sudden and incalculable
accident, or by very old and ingenious
criminality, amounting to downright forgery
and theft. But it is unnecessary further to
discuss the law; the severest test of expe-
rience has demonstrated its efficiency
And now a banking system SO safe and
satisfactory, deserving and enjoying
in so high degree the general conf
dence, so eminently beneficial to the bust
ness community, one of the mainstays of
our reviving prosperity, we are told by the
Ohio d emocracy must be abolished. For
what else will compliance with their de-
mand for the substitution of greenbacks for
national bank currency result in? Consider
its consequences. Do you think the
national bankers are in love with the severe
restrictions and regulations the law imposes
upon them? Do you think they are fond of
having government officer closely watch
all their proceedings, put his finger into
them whenever anything appears out of
time, and expose all their doings to the
light of publicity? By no means. Business
men are always apt to be impatient of
restraint and interference. What, then,
makes them submit to that supervision
which in many respects may become to
them an annoyance? In great part it is the
profit they make on their note circulation.
And what is the profit 1t is not by far as
large as the enemies of the national
banks represent it to be. 1t is
not the full interest on the
whole amount of note circulation IN
addition to the interest they draw on the
bonds they have to deposit ss security for
their note; for, as the comptroller of the
currency has shown by official figures time
and again, counting the tax they pay, the
reserves they have to keep, and so on, they
make less than per cent. profit annually
upon their note circulation based upon
per cent. bonds. That is certainly not ex-
travagant, but it is something. Take even
that source Of benefit away, and most, If not
all, of the national banks would hasten to
relieve themselves of government control,
so severe to them, but so wholesome to the
general interest. And then the best bank
ing system this government ever had, giving
to the business of the country guarantees of
safety, and being source of confidence
never before enjoyed, would disappear.
why, IL IL were redliy tIue, as Inc Oelno-
Gratis say, that ten millions of interest
could then be saved; nay, if the saving in
interest were twenty or thirty millions, even
then it would be a most glazing example
of penny wisdom and pound folly. For so
safe bank system as this is worth every
year many times that amount to the business
of the country Indeed, to destroy bank
ing system deserving and enjoying universal
confidence; to destroy it now, in period
of struggling business revival, when conf
disasters of the past, would be folly bor-
dering on insanity. And this costly and
dangerous experiment is to be made at such
a time for the purpose of putting green.
backs in the place of national bank notes,
Are national bank notes bad currency
Not even the widest enemy of the national
banks asserts this, and even Gen. Ewing
goes no further in his Lancaster speech
10 No dr. Al A.