The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1890-05-29
ANOTHER UNITED STATES BANK.

In message transmitted to Congress on
Tuesday covering letter from Mr.. Blaine
and report of the Pan-American Confer
ence, President Harrison recommends the
issue of charter to an international
American Bank" which viii in fact be a
third United States Bank.
The first United States Bank was char
tered just hundred years ago on the
recommendation Of Alexander Hamilton.
It's powers were larger than now seems
prudent, but it was wisely administered
and it tiourished for twenty years, until its
charter expired. During its life it paid to
It's stockholders IS per cent in dividends.
and when ii WAS wound up it returned to
them dollar fordollar of their subscriptions,
with 81 per cent bonus. The second
United States Bank had very different ex-
perence. II was chartered in 1916, on the
recommendation of Alexander j. Dallas.
Its object was mainly to advance money to
the Government, and to help the States and
the State Banks out of pecuniary embar-
easements. The bank did business for
twenty years without breaking down. Its
condition was well understood, and at fire.
quent sessions of Congress it had to stand
assaults which its Directors claimed re-
quired the expenditure Of large sums to
stave off cinch bills. When the financial
tidal wave of 1887 struck the country it sus-
pended; it resumed shortly afterward, but
1t was too weak to stand, and in 1889 it went
down again-to stay. When it was wound
up it turned out that every dollar of its capt.
tai had been SUNK.
The new bank which Congress is now
asked to charter proposes to be very diff
ferent institution. 1t is designed to dis
count the long paper in which South and
Central America are accustomed to paw for
the goods they buy. AS every one knows,
merchants In that part of the world settle
their accounts with six, eight and nine
months acceptaBces. The paper is good.
but no bank in this country will handle it
In consequence Of its length. In England
banks have n special department for the
discount OF these aceeptapces, which carry
and per cent interest. A certain pro.
portion Of the fixed deposits, for which the
banks pay and ~ per cent interest, is
mus employed, and in this way the British
merchant is able to sell on these long
credits, and as the paper is nearly always
met the banks can afford TO lie out of their
funds for these unusual periods. The new
United States bank, or International Amer
lean Bank as it is called, win deal with this
class of paper.
% 90 so successfully il will REQUIRE a
large capital and large line of deposits on
which it pays light interest. If it can get
these there is no reason why it should net
earn or per cent on its capital. The bill
cpntemplates the establishment of main
Office at Washington. That is the notion of
politician and not merchant. The head
office must be in the city where people have
money to deposit in bank, namely, at New
York. 1t is not clear, at first sight, why
people should withdraw their deposits from
the Park Bank. OF the Importers and
Traders, or the Bank of Commerce, to lodge
them with the International But as the
new institution is to be Government de-
pository the Secretary of the Treasury can
throw into it all the money it may require.
10 make such bank safe it will REQUIRE
carefully guarded charter