The record-union., 1892-11-02

GAMMA Hk
of issue has not been seriously raised
until in this campaign. 1t comes to them,
therefore, as a new question, a PROPOSE
ton with which they are practically un-
familiar. 1t is, therefore, of first i'm
portance that they shall, in the few re-
naming days of the campaign, be given
all possible information upon the subject
and shown what a return to the State
bank system means.
The Democratic party, by It's platform.
demands this return, and its chief orators
are defending the plank 1t means that
If the Democracy is returned to power it
will repeal the tax law that is non-pro-
bibitive Of State banks of issue. What
may we then have? Banks without
number. security or restraint, except as
Legislatures may prescribe.
That was the condition before the war;
State Legislatures did not then effectively
restrain wildcat banking; greed, political
chicane and venality prevailed then as
they will now with Legislatures, and in
stead of restraint most Legislatures gave
license to whomsoever would to establish
a bank.
Under that policy three men could form
corporation; declare it a bank of issue;
print bills promising to pay, and float
them; if not in their own community
then in a distant one, discounting them
if need be to do so.
In few months, when the promises to
pay were returned, the bank either failed
or redeemed upon the basis of a new
issue, or they had, through brokers, al
ready bought up their own issue at
ruinously low rate, and thus pocketed
the difference between that rate and the
price they got for their bills originally.
Counterfeiting became fine art, and
not one bank out of ten escaped it. In
deed. it was believed that some banks is
sued spurious notes direct, which, on
RASSSAANNeAOAA III hllL1Oh NOulNA DO
pronounced worthless. Bank note ''de-
tectors" were absolute necessities in
every place of business, not only to en-
able people to detect bad money, but also
to ascertain what fluctuations in the
standing of banks of issue from week to
week affected the wads Of paper with
,t-l,i fI,o;. H.,
The wildcat money was much used by
sharp employers to pay Off their men,
and thus losses fell most heavily upon
the wage-earners of the country.
Finally, when the whole bank system
was honeycombed with rascality and its
core eaten out, the structure collapsed,
and in the year 1857 there fell upon the
Nation financial blow that shook it to
the center. The banks began to tumble
in the West first, then in the Middle
States, and finally all over the Union the
panic spread. Millions of dollars were
lost to industry and production, and the
banks closed their doors with the pockets
of their proprietors comfortably lined
with ill-gotten gains and thousands of
business houses, large and small, went
to ruin and carried with them rich and
poor alike.
Precisely that will be the condition of
things, only in more aggravated form,
if the scheme of the Democracy is carried
out, and it will be carried ont if CIeve-
land and Stevenson are elected and
Democratic Senate is harnessed with a
Democratic House.
In reply to the story of the experiences
of the people under the State banks of
issue era, Mr.. Cleveland tells us that the
States will throw about banking systems
such guards as will prevent the people
being imposed upon; that the purpose of
the proposed repeal is to give the people
plenty of currency for the transaction of
business, and that expansion of the cur
rency can be thus effected without Great
ing distrust or menacing the pockets Of
the people by State legislation requiring
the banks of issue to be secured for full
redemption of their issue. How this is
to be done neither Mr.. Cleveland nor Mr..
Stevenson has explained, nor can they.
The only possible basis for their argu-
ment is trust in State legislation. We
put it to voters of California squarely:
Are they prepared to trust their Legis-
latures before the temptations Of all
who would desire to establish banks and
emit promises to pay that shall have
purchasing power?