The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1884-02-16
The Currency.


We alluded yesterday 70 tie fact that be-
fore the present banking system was essab-
lished the currency was In such q CONDITION
that men were liable to be constantly
shaved as They travelled from State to State,
or even from one extremity to another Of
the same state. In his speech Of We'd
ncsday last In the United States Senate Mr..
McPErgsov, Of New Jersey, brought out
this point very clearly. lie said
"Corpare the existing misunderstanding
system, II you please. with the condition
Of things which existed prior 10 its adop-
fion. and the contrast wilfurnlsh an album
dant reason for It's continuance. 1t Is
within the recollection OF every senator
here that for every days travel from the
Mississippi river eastward the note-holder
OF the western State bank was forced to
submit TO q loss OF from TO per cent. on
It's lace value, and when he reached New
York, the great financial and commercial
centre. 10 per cent. was not an unusual
discount. Under the old Siatc-bank re-
nime 1t was often impossible to Judge
safety OF the adequacy OF the security be-
hind the bank-bill, and under the laws OF
some OF the States no security whatever
was required as safeguard TO the note
holder. IL Is not surprising, therefore,
that the value OF bank-note was mea-
sured largely BY the distance It had wan
dered from the place OF promised redemp-
ton. In the light which such an experience
gives 10 Is needless TO say that the financial
Affairs OF this country can never again be
based upon such system, or upon any
system which affords less protection than
absoiutc security 10 the note-holder."
Now n Texas bank-note or California
bank-note (of a national bank) is as good
in Virginia rs a Richmond bank-note. The
note that Is paid out in this city is good
from Canada to Mexico.
How different. as Mr.. MCPHERSON shows,
was the case thirty years ago. Note
shavers were TO be found in every COM
munny. Brokers grew rich upon the
profits Of their traffic in discredited
bank-notes. The negotiable notes dis
counted in number OF the Virginia
banks were always, or nearly always,
made payable at some bank In Baltimore,
thus adding 10 the interest the rate OF ex-
change, which was always IN favor Of Bal
timore Of course. This little device added
several per cent. in the course OF year to
the profts OF the banks. The banks thus
had a pecuniary interest in discounting
notes for the shortest period OF time for
which the borrower would accept the
favor, II favor II was.
The readers Of to-day who cannot recol-
lect the condition Of the currency thirty
years ago, and who may not understand
how IL was that people could be so often
induced TO take notes OF broken banks and
OF banks whose notes were passable only
at heavy discount, may well congratulate
themselves that they have not been taught
by experience the evils OF a bad currency.
Bu, II in the case Of the trade dollars they
can see for themselves how even single
coin not legal tender has annoyed and
vexed the public and our lawmakers, they
NAV wen imgine what state Of things re-
suited from having thousands Of local
banks issuing notes, and issuing them In
numerous instances upon capital OF fifty
or hundred thousand dollars. A bank in
Baltimore would establish branch in
western Virginia, or western Maryland.
aud this branch would issue notes, and
these notes would be paid out In Bal
timore by the mother bank, and thus the
law requiring the notes to be redeemed in
specie wasrendered imperative and WORTH
less, since no bank redeemed any but its
own notes.
The law, we have said, provided for the
redemption OF all bank-notes in specie.
But whenever for any cause the banks
chose 10 become alarmed, aud to refuse to
redeem their notes, the public acqulesced
without q murmur, thinking sucha course
best for the community at large. And
what harvest for the banks resulted from
these suspensionsl Their notes passed
readily for money, and it was as easy to
print a hundred thousand notes as one
thousand. Thus the banks sometimes drew
interest upon notes based upon nothing;
for as Mr.. Mcpherson says. 1t was often
the case that no security for their notes
was required OF the banks.
Whilst Congress Is engaged IN DISCUSS
Ing questions connected with the currency.
and Mr.. MORGAN. of Alabama, is endeayor-
ing 10 have the misunderstanding system so
changed as to provide for the issue of notes
based upon State bonds, twill be well for
the public to reflect seriously upon the
subject. and make their conclusions known
70 their Senator'S and Representatives.
surely II would be melancholy spectacle
to see the country deliberately walk down
into the financial quagmire from which 1t
I, emerged only twenty years ago.
The WTIsgEY TAx.--The effort TO In
duce Congress to extend for two or three
years the time for taking whiskey out OF
bond has elected from Hon. WILLIAM ID.