New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1892-10-05
FHE STATE BANK CURRENCY.
SOME BEAUTIES OF THE SYSTEM DESIRED
by THE DEMOCRATS.
DISCOUNTS THAT COST THE COUNTRY ENORMOUS
SUMS-wILDCAT BANKS WITHOUT RE-
! sERyEs-THE HEYDAY OF COUNTER
EEITrRS AND FORGERS.

= sERyEs-THE HEYDAY OF COUNTER.
PETERS AND FoRGERs.
-wagniHgton Oct. (Speclal).-There has been n
steady and rapid Increase in the number and urgency
OF applications received at the Treasury Department
from different parts OF the country for Information ana
facts about Old State banks. The declaration OF the
Democratic National Convention in favor OF the repeal
of the state bank notes and return 10 the ola
sytem-Or systems-has evidently not only provoked
wide discussion, but excited general alarm among buS
ness men throughout the country. thousands OF whom
recall their unhappy experiences when everybody
whether a farmer. a mechanic, daylaborer or ner
chant-was at the mercy OF dishonest or irresponsible
bankers, shrewd and avarici0us bank-note DroR-
ers, and an army OF forgers, couferfeters ana
showers of the queer" The applications referred TO
are sufficient evidence that the proposition o the Deno
crauc party to return 20 wildcat" and red dog cur
rency IN be minor issue In the estimation on
Intelligent voters next November.
IL Is 10 be regretted that many OF the inquiries re
ceived by the Controller of the Currency cannot
promptly BE- answered because OF the lack OF Official
Sr other Trustworthy data relating 10 the state banks
Amy inquiry IN regard to the National banks or any
,partcar National bank from the first one That was
Organized down the last one can be promptly ana
correctly answered. That never true IN regard 10
the state banks or the banks Of state with few
exceptions. Each State had It's own system. or Whal
was by courtesy called system based on STATE
laws loosely drawn and laxly administered and was
impossible ever 10 obtain Trustworthy information IN
regard TO the condition OF Cts banks.
few days before the end OF the recent session OF
Congress the Senate adopted resolution calling npon
the Secretary OF the Treasury for variety on NOR
nation in regard the state banks from the year
1880 and the National banks from The time the
system was established IN 1863 down TO date Among
the items OF information called for, and which Con-
troller Hepburn Is seeking 10 obtain, are thes"
Frrst-The yearly and aggregate amount OF taxes
from nah
National Banks since 1s63 ~, a,
since 1853 from each source from state banks or
banking sTsocsons and SMngs banks Regulating notes
Of ss,e banks s and RANKING association and
banks each year since $50 cat. ,.,,,
banking institutions OF savings banks that have sus
rended or failed since 1890 and the loss Severay %
sochhoders' note holders and other creditors o. sara
Tfthhe number and names q National s n,ng nat
stockholders note holders and %ler creditors {" tach
SMh-The distribution by states and sections OF
State hanks and National banks banking associations
and savings banks. showing the capital and clrc,lason
SeventSNTne rprs Of exchanee on New.YoIk. end
current Value OF the circulating notes Of state and
the Ses Of of! New y from 1870 s..
E,ghh-The prevailing rates Of nterest IN ,tatr
banks since iaso ana the hrai rates Of Interest pre-
scrbed authorized by the respective states for we
Ninth-me net earnings or profits oech year since
1853 OF National banks arr4nGpN bV STATES
The Investigation has already been prosecuted far
enough to show that It will be extremely difficult. N
not wholly iraeractcable 10 obtain information which
will be Trustworthy and complete Ia regard IN at least
four branches Of the inquiry.
CIRCULATION IN 1857
According TO report made TO the secretary OF The
Treasury IN 1882 the number q banks IN existence
January l. 1857. was 14I6. with total circulation OF
62I477s &c., a total capital Of 1910 100000 and a
Of
the same report the number OF banks on January l.,
1883 was l,422, being an increase OF six, and The
total circulation had shrmk 10 Sl35.2oa, 344 being
decreas IN year OF more than $500 oOO ana
yet, according 10 an edit0raa In "1Aompson's BANK
Note Reporter" of october g, 1882 no fewer than
i.547 banks failed between August "a and November
l. 1857. The latter statement IS ineXpcahe except
upon the theory that the list OF failures included many
banks which did not issue circulating notes. OF that
the report TO the Secretary OF the Treasury was In
correct. The following extracts from the editorial
referred to DO not clearly show whether or not the
former theory is correct, but do throw strong light
upon the causes Of the monetary CONVERSIONS which
were frequent under the Old systems 70 which tie
Democratic party invites the country to return
"Tne peculiar banking and paper money currency
mercial troubles Al the scScncc Of modern chemistry
as applied TO fireworks appears TO be interviewer
the currency itself There IS nothing IN It 10 resist
but everything to excite confagraton.
editorial continues:
Nothing else can be expected long as the
country is dotted with little, fraudulently gotten
up. and fraudnlentiy managed, so,cailed banks,
whose only business Is 10 make and force out a
currency long the tide rams that way, and 10
break as the tide turns.
OF course it will be utterly impmccable 10
ascertain how much the note holders OF broken and
suspended State banks received the notes held By
them from $50 to date. and how much they lost
but there is good reason TO believe that the loss
largely exceeded the profit. In fact. the man who
had q note Of a solvent bnnk usually had TO stand
a .loss for there were few banks whose notes were
not at a discount except at the place OF issue. ON
this subject the following extracts from an editorial
In "Thompsons Bank,Note Reporter Of August 81,
1882 are pertinent as well as interesting
1t is surprising how patiently the people endure
paper money Of this country. The source Of almost
all the losses is to be- found in the fact that some
1000 socalIed Institutions issuers of circulating
notes, many of them Of doubtfnl sovency, and at
such distant and inaccessible points rs TO render
people at large cannot be judges Of great variety
AZ paper money emansting from 800 sources mixed
1000 varieties Of counterfeit and altered notes. II
the paper currency emanated from one mill, or even
the variety restricted TO one mill In each state
The losses would he mere song to what they now are
GREAT ANNUAL LOSSES IN DISCOUNTS
On September 3. 1859. the editor OF The Re-
porter. again discussed the subject. and embodied In
bis article the following estimate OF the yearly losses
entailed upon the people OF the tntd states by the
paper money Of that day Discounts on uncurrent
money SIS 900 900: premiums exchange, $1,000
600: notes OF broken banks. SoOO0,000 counterfeit
hank. notes, 81, 100000 The editor remarked that
ne was convinced. after careful investigation that
this estimate taking the average OF the previous ten
or fifteen years. rather under than above the
actual yearly loss. Al that rate the total losses 10
note-holders alone, on average total paper circn-
Jation which did not exceed Rl30OOO,OO0, had
amounted 10 no less than Sl9j, 100000 or about ~
per cent per annum.
In his ANIMAL report for the year 1870 John Jay
Knox Controller Of the Currency. estimated that the
loss 10 note-holders under the old systems through
failures OF banks alone, amounted TO per cent
annually upon the total amount OF circulation out
standing. He also quoted Eliiott's Funding system
10 the effect that In the year le41 fy-Gvc State