Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1881-03-19

DahA u ISSUE ,.-:.;.r..a houkin0 in
deposit ana e.cnank ~, ~ 600 trade Ranking
which there mis". -. !, l. M parf
is trade ana on,y ua' 49,: hork notes TO
Of legitimate oanAi"s ~ ssh s;r,,. 80 do 60 is n
circulate as money. INC i.s"' :. n accord
legislative privilege 70 capl.ai; no' rh;a,, 70.
with those principles vi egu" .;"i.,;nn IN
quire government 10 co," 's.s and ne
equal pr0tectloh anu eIu"' ~. $50. Lilo
Heaven does us ram s. .,'', ,,,,. tho rich and
upon ALL the hisn anu W.. 80 on ooual
the poor oaPi'"i
chance-no more. u, 1914,
mo one, say VT &C., y,,orav
.has any naturai ris"' ~ vi. ~ Ia Tot
lender out ne "no mas n""Iy ~ ,o,.,od
those, then. among US "ho nav :. =. i,ans
capital. ana VINO prefer e"'p'o ana rive
rather than otherw,se' SCI ny p" .hn,, d.
cash or natlohai oiis ior 'nc NJ. ~. &c honLs
count. My original misrepresentation Vi o"
circulating paper IS not uhkho""' NJ, '
since observed any euects either Oh '"e Ao'
ais or fortunes OF our citizehs WHO" are "''
counter-balance Tor the puoiic e'hS P'"'
duced."
Hwould seem py tue n""'oei Vi 10 .,.'.. :.
this character proposeu 10 De s'"''e"' ma
was the policy OF the iegisiat"re !" ie'u'" W
the old system OF state BANKS t"a' system
is obsolete. Whether proiesseuis pase" upon
coin. State bonds, or other securhies' w.
would not have suca banks II we co"iu. anu
we could not IT we would. AFTER eAperlehc-
ing, for nearly twenty years paper "s"",!
based ON the authority anu circuit "' '''e
whole nation and OF uniform Vaiae 'hrous",
out the country, the people Oh 'he "ll. .,,
States. while they have their iiperheS' WI,
never favor or tolerate a return 10 the oiu
State Bank system That system 'hes nave
tried and found wanting.
MIR. Knox, the Comptroller OF the C"rfeh-
cy says:
SIN nearly all OF the States banks e>pec-
tally chartered were favorlte organizations.
The amount ct currency issued was frequent
" t~ice and in many instances three times the
amount OF the nominal capital OF snch Dahks;
These charters were thus very 'ainanie anu
the state legislatures were oes legged ny ap-
pllcants for such privileges.
EX-Secretary McCuiioch' IN an ADDRESS ue-
lvered peiore me l,ahkers assoclaiio" ~
Pmladeiphia IN $780, IN reference 70 the
State banks. says:
I'm some states the circulation OF tue
banks was secured, partially at least, py
mortgages and bonds; in others there was no
security except the capital, which was fire.
quently myth. In some states banking was
monopoly In others 1t enjoyed the largest
liberty. The consequence was that we mad
bank note circulation frequently worthless.
and, when solvent lacking that uniform value
which was needed in business transactions
between the citizens of different States. 1t
Is enough to say that the circulation OF the
state banks was entirely untitled for coun-
try like ours; that by 1t the people were sub
Jected TO enormous losses. not only IN the
way OF exchange but in the inability of a
great many of the banks to redeem their
Secretary Blaine said in his Cooper Insti-
tute speech:
"When the war broke out we had thirty
three kinds of paper currency i'll this country.
We thought we had a good system in New
England, called the Suffolk Bank System.
We thought we enjoyed it down in Maine,
and vet regularly, with great perioiicity,
which beat the eouinoctial storm those hanks
would turn up defunct. l remember perfect
ly well. as if it were yesterday, on pleasant
summer morning in 1858, that a large bank
in Maine, known as the Ship Builders Bank
was announced as having failed, with $751;
600 of circulation out; and it is out vet
That was a good thing about the old State
bank, that when it failed it made clean
thing of it,"
Comptroller Knox says again: ''The
losses under the old bank system were est-
mated to equal in twenty years, the entire
amount of the circulation"
! am not aware that the people of this
State have petitioned the legislature for a re-
turn to the old systsm of State banks.
can not believe thev are in favor of banking
system that has proved vortex in which the
fortunes of the people have been so merci-
lessly swallowed up: not so much indeed, by
reason of the insecurity or worthlesshess
of the bank circulation, as on account of
the power which the banks possessed in
common with all banks of issue of expand
ing and contracting their circulation at
pleasure. thus enabling them to fix the
price upon every mans property, and to
change that price at will. The purchasing
power of money depends upon its volume ;
the pOwer that controls tho volume ,f
the peoples money is certain to control the
peo"l"s destinies.
In 1861 was lggested by the then Secre-
tary OF the Treasury new svstem--a better
way than the old system of banks of issue.
Secretary Chase in his report to Congress.
of Dec. Q, 1861. speaking of the 202 mil
lions of State bank currency then in circula.
ton, says:
"The whole of this circulation constitutes
a loan without interest from the people to
the banks. costing them nothing EXCEPT the
expense of issue and redemption. and tho in
tIrrsa al.