National Republican., 1888-02-19

chu,ott, made corn payable for all debts
The same court ordered that "Wumpuu-
pCag should pass current iOrdCbts tua limited
extent. IN Maryland. tobacco was made a
legal tender. In Nirgniathc merchants acted
in the capacity of bankers to the planter, In
no small degree by making advances and
lending credit. In 1913, II appear, that John
Coleman and Others proposed bank which
meant Lavish AN issue Of credit PAPER
based on land in Massachusetts They pro-
posed a bridge over Il river ~ AN object and
Foundations and their notes flowed like the
water in the river H. long ns the "Go,hct'
lasted. The bank Spuu drih up, like the
river. All such early bank, in thi, country
bridgcd over the requisites of q bank or u
sound currency.
Franklin, ii is said, was favorable tu these
loans, for hc printed the bills, and also wrote
in favor of them. lie says, III was u very
profitable job, aud u great help to me" But
rs BagchOt has written, "nu nation has vet
arrived at Il great system of deposit banking
without going through the preliminary stage
of note iSstc.'
According tu the standard accepted to-day
the first bank was the Bank of Nuuh Amer
lea, organized 10y Robert Morris while SUI
prrntcndcut of Public Finuncc--a bank with
Il capital Of gold and silver; twelve directors
chosen by the stockholders and entrusted
with lis management. II was approved by
Congress in Isl, and commenced operations
in l7S2
The second bank in America was the Mas
sachu,ctts Bank, established in Boston in
l7NI.
Il was with difficulty that banks supported
themselves during the war hut after the
establishment of peace banks were instituted
in most of the States.
The Constitution of the United States was
imuugurucd in l7Sn. ON the llth Dccrmhcr
l7U. Alexander Hamilton rcuurtrd tu CON.
grC~s the plan Oi u bank. The hill passed
and was approved 10y Washington. twenty.
three institutions were chartered previous tu
lNuu; and from the beginning of the present
century banks increased III rapid >uccr>>iuu
keeping pace with the growth and needs of
the country. ~ the wealth of the country
increased the banks were extended in num-
bcr., localities, capitals and Importance
sometimes commensurate with. but fire.
vuvntly in advance ur the cNiguucirS of the
community. The haukSut the Eastern States
were Of slow growth, hut generally were
well iuuulul IN the Western States il ap-
pears tu have been, to- a large extent. the
practice tuc>taI,ll>h banks uu paper security
without CNartiugL buu fhruH~h capital. The
consequence" was, u brief existence and illus
tratiuu of the folly Of attempting banks with
urt capital.
In lSlu the number Of banks in thcI'ntrd
States WAS about eighty, with stated capital
Of fifty millions ut dollars. In lSiUthc num-
her exceeded seven hundred with capital
Of upwards of three hundred millions of
dollars.
The number Of bank failure, which oc.
rlrrcd in the United States in the half cen
tury which elapsed from the prripd of the
first Institution Of bank. in the country
down tu th" beginning Of the year lS}7, the
era of the second general suspension. was
/ about one hundred and srNCuty-iiyu-ahuut
one hundred and twelve Of which occurred
in hr States south and wrNl Of Pcnnsyl-
yania.
/ To attempt a minute, even II general sur
vry of the continued uNtvn>iuu progress.
and conduct of banks and banking in the
States would urcu>>Iatc work that tu say
| the least. would not hc tu our purpose.
/ All the states had early laws affecting
banks. and most of them systems of law,
governing their organization and Usefulness
/ The enactment of Congress in lN'Gi for ia,
. establishment of national system of bank.
iug aud designed tu ~upUr>clr all State bank,
Of i~~uu. was no less It successful measure iui
Il safe sound and uniform system Of bank.
ing than il wu~ Il wise measure for the rclici
Of the tiuyrrnmcut in the rNigcncc> Urc;l.
>ipurd hy the war,
ss'rhc Importance of banks to the rise and
progress of uutiuu~ j. no less essential than
domestic industry, internal improvements
free Schurl>, and cDluratiuu.
TIA" cummcrrui Il large city, or even th,
business ui' n considerable town cannot u,
adequately sustained without such aid. rh,
benefits derived hy the puhl" from banks ui
sound constitution and CuudUrt are almost
iunumcTlhlr. They are secure drpu>itorirS
for money, uhyiatiug the danger Of theft
robbery and casual los arising from it, re-
. trmtiun in the hands oithr owner.
They serve tu Uhviaic the nee, >~ity for ear
rying money from place to place tu max,
purchases or payments.
They serve tine dupp~itur ~ paymt~tcr
aud correspondents and n, collectors q
checks and drafts payable To him.
Thuy rlirv" the customers from all rN
prn,r, IruuhI" and risk with respect To- til,
presentation for acceptance and payment %
all clue bills drafts and accounts.
They transact an important portion of th,
business of the trader at an expense far in
trriur Ia that which hr must incur were Ii,
tu conduct ii himself
They are useful hy furnishing 10 man,
persons the means Of laying uul at intcrc>
and in safe manner such money ~ they
may have to spare. Those banks in parlicu
lar which give interest for small sums ailur,
tu the middle and lower GLASSES Of people un
cnuragcmcut Ia lay up property.
They afford Il way of distributing to ON
class of people thc surplus earnings of an
other.
They serve the lrpu>itur in providing hin
information respecting the WORTH credit, -
sulvcnry Of parties with whom hr may du>ir
To do hIl>iuc>s They afford great iuclitc
10 the drpu>itur the Customer and the pul
lie for the negotiation of notes AMI bills ,
exchange and the sale of ufCummcrciul papc
The relations between the bank and the cll
TONERS are and must bc reciprocal. \ prrSu
employing Il bank iS expected To assist i
sustaining il, 10y keeping an account with
balance of sufficient apprcciahc worth I
the bank to pay for the services rcnluTr
him, The principle may hr defined, ~ tll
u>>uriatiun Of Il number of persons for tn
= purpu>cS of a bank, To- receive On deposit TN
% cash funds of the community, which, t,
, grthcr with their own capital, they use I
% the benefit of their customers and then
selves
The bank undertakes 10 assist and con
plCtc the payments for their customer
while ON the other hand it 81 rcdi>trihul,
| the funds in lis possession, in di>cumtiu
, bills and making loans, ~ to- prevent incOI
| NcniCnCr to customers when they desire I
, draw out their deposit or any portion of /
! The success of the bank must, of Cuur>
: depend upon the skill ut the management
b. the knowledge possessed of the credit of Cu
= TONERS and of the eligibility of securities I,
- the employment of lhr funds; and, rs Gi
. bart says. "Ihc establishment of a bank
amy place Immediately advances the prcm
- AIRY value Of a good moral character II
T. thus that bankers perform lhr functions
@ public cuu>cryutur~ ui the commercial vi
tue
b y banker should apprchrnd correctly Il
r objects Of hi, banking rhry consist
r making prruuiury gain, for hi> >luckhpldr
e by legal operations The bu>iur,, is en-
mcntly beneficial tu society, hut the good
= society must not shade the banker view
= the interest ut Stockholders. The object
e owners of the stock Of banks i, To- mad
a money, and the officer, must rcmrmhrril
The confluence rrpu,ud in bank /, ia
Il which extend, to the management and ru
II ~titucut> Of the bank
Il Under whatever system the hu~jur,,
y transacted, whether under national or Sta
laws if tIprt /. .tt, u-snIiutiDu al. mon pI sI