The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1892-10-20
STATE BANKS, HARTER'S PLAN
The STATESMAN not long since

The STATESMAN not long zinc
gave an illustration of the operation
of state banks as they existed Il
1S54-5-6-7. 1t will be remembers
that it was stated the Tennessee
bonds were purchased at 70 cents o.
the dollar, land deposited with tn
comptroller CT the state to secure tn
issue OF hundred cents by the bank
and that by frequent repetition
banker at last succeeded in accumu
lati3g 100000 in gold and conven
iently failed, leaving S75, 600 in bond
for each 100000 issued in the hand
of the comptroller, and also leaving
the holder of the notes on each 1890
$4,000 short, balance for which there
was no security.
The Nation gives Congressman
Harter the credit of writing the PLANK
in the Democratic platform proposing
to repeal the 10 per cent tax
on state banks. That paper
which is very conservative and
very able gives Mr.. Earter the ben
eft of an explanation showing that
he had no idea of reinaugurating wild
cat banks and endorses the plan he
proposes. 1t has been admitted by
the father of American finance Senat-
or Sherman, as heretofore COM
mented upon in The STATES
MAN, that Irrational banks will
have to retire their circulation
when tue bonds of the United States
are paid off" az "the people are not
willing to delay paying the public
debt merely to enable the banks to
issue circulating notes." Then Mr..
Sherman does some of his ground and
lofty tumbling and flops over to the
advocacy of a United States fiat Gu +
rency with as hard latitude az ANY
rampant Greeubacker.
THE STATESMAN merely ventured
to inquire how this fiat money could
be obtained by the people
without the establishment of
a United States bank with branches
in every county in the country, Great
100000 additional office holders and
the most powerful party machine that
ever existed in any country. Mr..
Sherman's fiat system is regarded by
financiers as folly entailing on us
reckless initiation and unsettling
values.
Mr.. Harter's plan is to continue the
national banking system as existing,
except in the kind of bonds as basis
of security. He proposes to allow
other than national bonds to be de-
posted with the comptroller. Around
the kind of bonds he throws the safest
guards known to financiers. So care.
full and exact is his precaution, that it
would be almost impossible for the Sc
curity forming basis for banking to
be other than equal to United States
bonds, and all of them to be in ex-
pressed terms payable, principal and
interest. in gold coin.
Mr.. Harter thinks that the continu-
ance of our natinal bank notes with
our present gold and silver currency
and the repeal of the 10 per cent tax
on state bank notes would rendered the
issue of such notes secure and at
tended with perfect safety.
These state notes, based on
,undoubted, security could not
be made legal tender and unless they
were equally as we'll secured as the
national bank rotes they would never
leave the bank that issued them.
The plan too briefly stated here to
be fully understood in detail, has the
approval of such cautious and conser-
vative authorities as the Financial
Chronicle and the New York Journal
of Commerce and it does not look like
the "wild cat" and "red dog" curren-
CIV to which there is insurmountable
objections.
If any state should pass a law au-
thorizing banks to issue money made
quately secured it would not get a
in the town in which it
was issued, or if it did it would be
returned for redemption
and the bank could do no business
The news of state passing such law
would fly over the country on the
wings of the telegraph and the made
quately secured notes would be tabooed
at once.
These are the ideas upon the propo-
sition of Mr.. Harter very much con-
densed. 1t at least has the appear
ance on its face of being the solution
Of the money question for some plan
must be adopted as soon as the public
debt is paid off.
THE DISTRICT JUDGESHIP.
Mr.. Frank G. Morris will certainly
be elected district judge over MIR.
Doth ora nanOnrats and