The times. [volume] (Richmond, Va.) 1890-1903, 1892-12-06
srArE BONDS AS SECURITY Foh
STATE BANK NOTES.


The letter from Mr.. George u. Shackie-
ford Zone OF the most sensible members
~ the Legislature) published In Sundays
Timea contains a suggestion respecting
,,a,,,ng secure the notes TO be issued by
s,ate Ranks when Congress repeats the
tax on those issues, which Is well worth
considering. Mr.. Shackleford suggests
that state Banks be required to deposit
With the state her bonds to secure their
circulation. and that the State then guar
ITO the notes OF the bank. In the opin-
ion Of The Times, State Banks should
he required to deposit nothing as Sc
curitv. for their notes. The real security
for the notes which a Bank puts out Is
the character OF the Bank and OF its man.
ayers. Ii would be wise to make the
notes a first lien upon all the property
of the Banks, including its deposits, and
this would make them perfectly secure.
But provisions that require the Banks to
icon mart of their capital locked up in
one security or another simply embarrass
the managers OF the Bank In handling
its resources to the best advantage, with
no adequate reason calling for them.
However, the country has, under the
operation of the National Bank law, be-
come so welded TO the idea OF bonds de-
posited to secure circulation that we have
no expectation our radca, views mo less
right because radicaD will be adopted
A deposit will be required, and this
being so. II is eminently wise that that
denosit should be State bonds. What the
State wants is TO make the settlement or
her debt as popular as possible She
wants TO stimulate and encourage her
own citizens to buy and own her bonds,
that tbev may feel her debt to be some
thing they are all interested in, rather
than a source Of taxation to them. Hold
ing her own bonds as security against
her Endorsement of the bank notes, she
would of course run no risk by her
Endorsement Of them. Mr.. Shacheford
might, however, find some embarrassment
in the provision of the State Constitu-
ton, which forbids the credit OF the State
TO be granted to or in aid Of any person,
association or corporation We should
be glad to hear what suggestion he has to
make for evading this obstacle. The Dis
patch still harps upon its theory that
those who advocate taking the tax of
State Bank issues wish to abolish the
National Bank system. In it's issue Of
Sunday it says:
"They" chose who oppose abolishing
the taxi think 1t would be unwise in the
highest degree to substitute a mere eX-
pertinent for a banking system which has
for twenty and more years proved itself
by actual results to be the best banking
system the people of the United States
have ever had"
Why will the Dispatch Insist that'those
who advocate allowing State Banks to
issue notes II they please to do so are
making war upon the National Bank
system They are not doing anything OF
the sort. They propose to have the Ma
tional Bank system just as it is, with
liberty to any one who pleases to establish
and run a Bank under the National law.
No one proposes to interfere with them
in any way whatever. We protest against
these continued efforts to place us
amongst the enemies OF the National
Banks.