Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1892-11-18
FRIDAY. NOVEMBER 18. lS9:
The Currency-Again.

Persons III SehrCu W iishN VI" 's
svstems will find an interesting and IN
struct;ve discussion Of that subject in an
address delivered about year ago In the
American Bankers, Convention, at New
Orleans. by WILLIAM c. CoKSwEII. cashier
of the Bank OF Buffalo, Buffalo. N. Y. Mr..
CoRSvxLI. be Il observed. does not hive IN
Nav YORK city nor 60 70 Wall street Tor
ins,ruetiop In tho science.of banking.
Mr. ConxwrIL assumes that the present
banking system Of the United States VIII
have 10 be superseded by better one, OF
M any rate. that the existing system can
not continue to exist after the.fgoyern-
nent debt is raid of. He says that no
Congress would issue government oonus
bearing per cent. interest merely tor the
benefit Of the banks, and that II such
measure were resorted to 1t would prove
% be failure. He then goes on to de-
scribe the Canadian banking system. which
be pronounces the most perfect IN the
world except. perhaps, that OF Scotland
after whose system the Canadian system is
closely modelled. We quote Mr.. Corn
YELL ON the subject Of currency that cant
be induced 20 so far away from home. he
says:
ITO many OF the older members Of this asso-
c,.,,on the fiery destruction OF the stste-bank
r.ts ern m the South and West-the wildcat
,ar4od az II is caIled-is still viva. Those were
time. when the oontents Of a mans pocket-book
would slowly burn 10 ashes through the fail-
pre OF a dozen banks Of issue In an hour, or
when the farther one went from home the great
or became the discount on the notes ne carried
with him, parented as they were by banks OF no
reputation beyond the town line where they
happened TO DO situated.
"No wonder that after experiences OF this kind
n nation should come 10 regard the very princi-
ple Of state issue with holy horror and should
embrace the opposite extreme oil national ana
oyer.secured currency as an unalloyed blessing,
refusing 20 consider anything else even at this
late period, when the private profit and impor-
tnnt public benefits Of the system, as far as cir
enlation il concerned, have as completely disap-
neared as the life from the leaves Of winter"
In Canada all the banks of issue must
obtain their charters from Parliament.
This. we take 1t. is as if all banks of issue
in the United States were required to OBJ
tain their charters from Congress or under
an act of Congress.
Apain: All banks of issue in Canada must
-h.ve subscribed capital of S5o0.OOO, with
at least half of it paid up. No dividend is
allowed which would impair the capital OF
the bank. and no dividend higher than s
per cent. per annum. The shareholders
are doubly liable; that is. they can be
called upon, in case of failure and deficit
IN the banks assets. for an additional sum
equal to what they have already invested
in the shares fully paid mp. Forty rer
cent. Of the reserve fund is required to be
held in Dominion notes, and any bank
making payment up to 800 must, II re-
quested, pay IN Dominion notes, which,
we suppose, answer TO our greenbacks.
No torn or defaced notes OF any kind,
either government notes or bank notes,
are allowed to be paid out.
Once more: The amount of notes issued
must never exceed the amount of unim-
paired paid-up capital. They are a first
lien upon the assets of the banks taking
precedence even OF government claims.
A redemption fund is made up of a contri-
button of per cent. by each bank on the
amount of its own notes in circulation for
the twelve months previous to July lst OF
each year adjusted annually. This fund
il deposited with the government (Which
allows per cent. interest upon iD. and IS
for the special purpose of redeeming the
notes Of any suspended bank. This is like
the tax which MIR. FLANAGAN. Of New York,
proposes to levy upon the banks. We
quote Mr.. CoRNwKLL:
"ln case OF suspension notes OF the suspended
bank begin at once 10 draw interest at per
cent. until redeemed by the receiver Of the
failed bank II not redeemed In two months In
this way the notes, with interest, paid out Of
the redemption fund, which Is reimbursed by
the failed bank as soon az possible. In case Of
depletion Of the fund IL IL TO be made up again
by contributions yearly OF per cent Of its past
years circulation by each banK.
"Ihere rs no tax upon circulation.
90 Each bank Is required to appoint agencies
cities Of Canada, covering all territory from one
end OF the Dominion 20 the other. This does
sway with the old condition which forced notes
a far-of banks to q discount. making the cur
rency na'ional-a brilliant quhlityof our own
nAtional-bank notes, impaired. however. In a
different manner.
"The notes Of all the banks are sent In and
redeemed daily. like checks"
That feature Of the Canadian banking
system which makes bank notes bear in.
terest when the bank suspends is deci-
dedly an improvement.