The weekly Floridian. [volume] (Tallahassee, Fla.) 1867-19??, 1892-05-07

it up because of the Ligh price and the
scarcity of governn mt bonds, on which
alone they are allowed to base their is
sues.
But the prohibition operates in many
ways to the hurt of the people. 1t dis
courages state banking at time when
there is no encouragement for national
banks outside the great cities. 1t lessons
the volume of currency and deprives the
rural regions and small towns of banking
facilities which they greatly need.
For example: If the merchants of a
remote town and their customers feel the
need of banking facilities and make up
heir minds to establish bank, they
must begin by buying $50, 900 worth of
United States bonds, at cost of $58, 900,
in New York or some other money Gen.
tire. On the strength of this outlay they
may issue $45, 900 Of currency, which
leaves them about S13, 600 worse off, so
far as the local supply of currency isJcon-
cerned, than they were before. Under
state laws they might easily establish
sound bank on better paying securities
than government bonds, but the national
banking law imposes prohib .ory tax
on state bank issues. The law operates
thus both to contract the currency locally
and to deprive the country of neeued
bank facilities.
The ready argument against the repeal
of this prohibi,ory tax is that it might bring
back an era of wildcat currency, That AR
gumeut is founded in ignorance of condi.
tions. The wildcat banking of forty years
ago WAS rendered possible by the condi
'iens of that time; it is not possible in
present conditions. Intercommunication
was slow and difficult then; now it is in
stant and easy. 1t would be impossible
now for any bank of any state TO put their
notes into circulation unless the banking
law of the safe were so carefully framed
and administered as to make the notes
perfectly secure.
In the old days there was practically
nothing but state stocks upon which to
base circulation; and there is vast sggre-
CATION of perfectly secured county, munich
pal. water and other like bonds which
:. "~"diated because the courts
~ dtwhich constitute
u ,vundaLlou as;secure as that of govern
ment bonds themselves. 1t would be
perfectly easy now for the several states 10
make their bank issues as safe as treasury
notes. Indeed, the only proof ofthat that can
be asked is the actual security which state
laws have given to the savings banks.
The repeal of the tax which particularly
forbids state banking would do quite all
that can be done by the government to re-
lieve the agricultural and small mercantile
classes of their real distress for lack OF
currency and bank accommodation. 1t
would tend to check the dangerous clamor
for inflati N and other unsound financial
devices. 1t would add 10 the currency an
elastic body of perfectly secure circulating
notes, not Iey gal tender but everywhere &C.
ceptable. 1t would demonstrate TO the
discontented the disposition of the majority
10 congress TO do all that can be safely
done for their relief II would give new
and profitable employment to capital and
new stimulus 10 business in every local
centre.
This is the case as it presents itself to the
minds o. the leaders of the movement, and
for their view they have the sanction oi
some of the wisest aud most conservative
financie.s in New York. AS one of them
has put it: "This is ground on which
New York and Georgia can look each
other in the eyes and shake hands"