The Emporia weekly news. [volume] (Emporia, Kan.) 1881-1889, 1882-02-16
BANK CHAPTERS.

Within year, unless congress makes
some new provision, several hundred
National banks will be wound up. The
same stockholders, or any part of them,
can Teorganize under new banking char
tiers il they please But the proceedings
will be tedious and costly to the indi-
viduals concerned; the process of liq-
uidation will enable the banks to claim
and profit by all gains from loss or de-
struction of currency within their twen-
~ years of operation, and the necessity
of making settlements will involve the
calling of great number Of loans.
The loans of four or five hundred Ma
tional banks cannot be called in and set
tied without real financial inconvenience
10 multitudes, and especially TO men en-
gagged in productive branches of indus
try. In ma y manufacturing, mining or
farming towns It would be impossible to
effect other loans in place of those
which the banks may be obliged to call
in. The money of the banks must be
employed temporarily in settlement,
IL they arc 10 close up their affairs, and
other capital and lenders may not be
found. For example, a bank having q
circulation of about go, 900, and being
the only bank in the place, in order 10
wind up its affairs would be obliged to
deposit legal tenders 10 plsce of its
widely scattered notes, and could not
avoid calling loans in order To
gather in the necessary money, part of
which would he locked up in the treas
ury for q long time. This contraction
would be Just the same, under present
a.. IL. a
should reorganiZe As new bank or not.
new bank. the parties must deposit
bonds, and await the unavoidably slow
process of official arrangements at
Washington. The new notes cannot be
engraved nor issued in 4 day. For
weeks, the full amount OF the circula-
ton would be Withdrawn. In many
cases the bank would not be able 10 re-
organize at once.
Hence IL is highly important for the
public interest that the process Of reor-
ganization should be facilitated as far
as possible. But some members of
congress seem to regard it as pure ia
Vor to the banks if the government per-
mits them to renew their charters with
out formal reorganization The only
persons who can gain by thus facilitat-
! ing the work are the borrowers, who
| are using money which would necessari-
| ly be Withdrawn from market If the
present process should be required.
But some members cannot get it out of
their heads that they would somehow
favor a grasping and wicked corpora
ton If they should provide that Ma.
tional bank might obtain renewal OF
its charter without formal and complete
reorganization.
The bill which has been agreed upon
by the house committee appears to be in
part a concession TO these prejudices.
Of course, AS the prejudices are ignorant
and work serious harm to the public in
terests, every material concession 10
them does harm and is really hostile to
the welfare of the people. But the bill
| is commended as q reasonable com
promise. 1t is said that it provides fol
reorganization in form, and for full
| protection of creditors, without inVolv
ing actual liquidation of accounts. con
traction of loans, and prolonged delay in
the use Of money thus, Withdrawn from
use. If the bill practically meets these
difficulties it is deserving of credit. Blu
the truth is that il is very difficult tC
frame wise laws for banks in the pre-
vailing idea that banks are public enc
mics. To whatever extent the bill lean!
to that idea, it will probably involve
contraction of credits, loss to indIvidu
ais, inconvenience to stockholders, anC
harm TO the public, without any com
pensating advantage. 1t ought TO bI
the aim of congress to enable the banks
TO renew their charters with as little
shock as possible to the business inter
ests of the country.