Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1889-12-29
SUNDAY DECEMBER 20. 1889.
The National Banks,

RICHARD Smith. Esq, IN a late letter to
Ms paper. says that tho present system OF
national banks IS moro than threatencd.'
We trust that this statement u an cxagGc-
rated one. We cannot imagine that the
people Of this country will ever be unwise
enough 10 require their representatives. in
Congress to vote TO destroy tho best bank
ing system which any nation ever bad, nor
that there will ever be brought together IN
Congress simpletons enough opposed to
the present banking system % destroy that
system of their own free VIII and accord. II
- time that our national law makers STUN
bled upon this system, and in so doing
builded better than they knew-builded so
well indeed that it has. We think, been
said that for the war between tho States
the country was almost compensated in
the establishment Of the existing system
Of national banks. But the system Is none
The worse because it was the result of q
happy accident.
Why should this admirable system have
single enemy Mr. SMITH seems not so
much to fear outside enemies az to think
TINT the system itself has "a weak link IN
il we mean. Of course the feature which
requires q national bank % deposit national
bonds 10 secure noichOliers against loss
lie saws that with the disappearance of
national bonds national-bauk currency Will
disappear, and national banks, too" This
is indeed a gloomy view OF the banking
"situation." It is hardly warranted by
the facts There Is wisdom enough
In Congress TO enable that body 10
provide for the continuance Of orr
excellent systom of national bank
ing as that system now i, OF to pro-
vide for it's perpotuation in modified
form. One suggestion which has merit Is
that the national banks shall all become
suretics 70. ono another, and each become
bound for the notes issued by the others.
This would be accomplished by levyine q
small tax. And II Is claimed by the adyo-
Gates Of this feature that the statistics of
the national bauks show that this scheme
IS entirely feasible as well as cheap. But
81 tins scheme be impracticahlc better
one. wiu lie found. One which seems 10
commend itself to Mr.. Sanru's favor he
speaks Of as follows
"Ihe proposition is 10 refund the na-
tiOuai bonds IN new Issue having hitF
years 90 run, bearing rate Of interest not
exceeding - per cent. MI NJ kmlef SAYS
2 per cent, but why pay 50 much less than
money is really worth? These bonds
would b. accepted n- security at par for
circulating notes. The present bonds are
received no ninety cents on the dollar, TINS
is ridiculous provision Ot the law. The
zane bonds are received at 40 rs security
for deposits.
..'Th.n il Is pronoscd that the tan or cir
culatiun shall bee abolished, aud those who
want 10 float a . per cent. bond would re-
move that obstruction as To holding % per
cent. of deposits in reserve. The aTgum mt
in favor of tins l. that II is no part of the
business of tho Government 10 look ont
for dcpositors, and If II guarantee circUia-
ton il iul6ls it, mission This, III my Opin-
ion. IS "A mistake. A 70 per cent. reserve u
good banking. No bank is safe without
such reserve. and Government control
over that should not be relinqulshcd. All
good banks would oppose any relaxation
In the law rs TO reserve, and the rest, IN
the interest Of the system, need 20 be con-
trolled There has been evidence enough
npon this point"
Whatever plan may be adopted must
commend itself 10 the moneycd men-thc
bankers. Capital is always tmid. 1t viii
not venture into dangerous places 1t
never walks over pitfalls. The Govern
mont Will never be called upon to go so
far; but 80 important ia It TO have an alb
solutely sound curroncy-one which every
poor man might put into his stocking
for bookkeeping -that 1t wonld not be
objectionable to say that the Govern
mcnt could better afford TO become
surety for the note-holders than it could
t. allow our currency to descend into that
wildcat condition IN which the war ne-
tween the States found It. But this choice
viii never be presented for the consdera-
ton of Congress. The present system Will
be preserved or better one Will be evolved
from it, Among financial schemes, as IN
everything else, "the fttest Will survive
We are gong upward not downward.