New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1892-10-05

L.
6 per cent. Notes of forty-fve Georgia banks were
rated as follows Thirty-one at per cent discount
one ut 10 per cent discount, and thirteen nisa
able. The notes OF two Alabama banks were
| at per cent discount, and the notes OF iivc
| were unstable. The discount on ONO ana lndaha
| banknOtes ranged from to so per cent. The noeS
OF Illinois banks were at n discount Of per cent
| except eight banks whose notes were worm 3o per
| cent OF their face. The Bankers Magazine Tor
February 1853 published list OF twenty eight sis
pended banks I'm Indiana whose notes would be re
deemed by the Auditor Of that state at the following
rates: 10 at par. at 81. at 81. at 81. 4 ut 10
] at SO. at SO. . at 81. at So. at 90, ut 81
| 1 at so, and al 60.
ON lime 30. 1858. the combined total banknote cir
cuation OF the states Of Illinois and Wisconsin, All
Of which stood at a discount of per cent announced
| 10 SO 19s OOO and II protected by specie re
serve OF only 81 10000. The total disconn, on 'e
entire circulation amounted TO more than Seooooo III
| 8 per cent. and the discount had to be phu ny
note holders often they paid ont mole OF eer
State The rates Of discount notes OF Virginia bahhs
ranged from 10 25 per cent. although they ~pofeu
total specle reserve Of 81 100000 against circula
lion Of "a 100000. According to "ThompSon's Re-
por,er OF Nav = 1859 the notes OF only seven'y-eeht
hanks outside Of New-YOrk were NJ par III tat ci'y'
where provision had been made for tler icne"Puo.'
| or these banks fOrtytwo were situated IN New 'o'h
ihirtywo in NewJersey. three In Connecticut ana ono
| PennSyiVana.
such hanks had increased to eiglty-two, inc gam pes
| throe I'm connecticut and In Pennsylvania
| In Jnly 1859 a convention OF Wisconsin bankers
held nj Milwaukee fixed the discount on Illinois bahN-
notes at ! per cent until September 70 ana . pr
conf thercof,cr-wlich was the rate imposed by I'LL
no,s banks on the notes Of Wisconsin BANKS i"S
action illustrates another OF the beauties OF the sys-
tenn, TO which the Democratic platform declares INV
country must return Ike illustration IS fornd III
,bo action CT the Indiana banks taken In April 1901
uben they determined 10 throw ont the notes OF all
| Illinois and Wisconsin banks. Al that 'imc lhe 'S
| timoied circulation OF Illinois banks amounteu "
81 900 COO and that Of Wisconsin banks to Soooooo
This action was justified the ground tha' ma'N VI
| the banks were situated at distant ana 'nacc'SN'o
points making the cost and dihicuit''s OF rn'"po.
heavy and that the Chicago banks Disseminated against
| Indiana banks.
OTuFR rENTIDS OF THE SYSTtN
o,,or ho,u,ies Of the system" Of State banks are
| disclosed by the pages Of the Bankers nae"Hn''
| " Thompson's Reporter and other hnanc"l p"'n
,ons OF that day. According 10 "Ihe hrPo,''
October g. 1880 the Bank OF Weston ana the h'''n VI
Manassas. Va. had ceased 10 redeem 'heH "o',n
| nresen.ed The notes secured by NTe''hh
| o,,or ho,ds which would make them worth 90 to "a
copts - tho State officers would act promptly pn' III
,bo nresent uncertainty they are salabe OILY III 10
! and 90 per cent discount" On January ~ 'o"'
The Reporter" contained list OF the StAtoe III ""''
tho banks deposit no securiy and the rrdemp''on
their notes rests entirely upon the ability OF tue p""9
| This lis, included Maine. New-ilampshirc' vermont
| Massachusetts Rhode Island. Connecticut, fehOsSl
| ron,a Delaware Maryland, District OF 'olumph,
North Carolina South carolina. Georgia. ken'ncKy ara
! Missouri Ncw-Yorf had thrtytwo BANKS IN opers'on
| which deposit sccurty-saicy YUM o"""' v'N
o71 free banks which deposit security tor reonP'''"
! n, their notes. The circulation OF inc .~N''''''
hanks wos practically unsecured and the same re-
III nj
! r,,uo.eeo and nine fenths Of the Virginia banks
u WINS bv no means ALWAYS the case that me S"cur'-
| nes depos,ted wcra adequate. In Januarv lH'i' ne
State banks Of Illinois had notes In circulation 10 '
amount OF Sl2 324, 604. protected nv depoh'' W "
OF varlons states. worth AT par s13"9oo'l' o"' 'r
| current markc' value OF which amouh''u W o"'
| s,1 500 $40 although the Illinois banking law re-
| It'd an e1cess NJ 10 per cent OF deposits over the
| toto, amonnt OF notes in circulation After GIVING
| nos. facts "The Bankers Magazine for February
| ,ac1 said cone Thousand dollars In ILLINOIS, Dalh
notes does no. represent that amount oil CON III p"N'
hi, n certain amount Of securities In the hahdS oil ''
| ,a,or u thesc securities deprecate In value. the
hank notes will also deprecate. rs surely as ShiA"e
q, tho substance will corresponding sInkase OF
| Ohio shadow, Al that time NewIork exchange was
rated nj s 10 10 per cent premium In Chicago Inc
| panpors, Magazine for july 1901 contained an
article about the Albany ~. " banks 1onr OF "'n
bod recently suspended. The four banks had cap' al
n, al $40 600 with demand liabilities amounting 10
80 500 900 and only $4,000 In specie. one OF 'n'
| the Bank OF the Capltal-had over S5ooooo cash
| liabilities and had less than $4,000 In specie
| n, rahr,larv 10 1850 "The Reporter" pronounced
| oil cbue Island money doubtful" and gave n list
O, seven Rhode Island banks that had failed between
October 1856 and January 1857. one OF wnch hHu
mid 80 cents on the dollar and the other six had
Maid nothing TO note.holders or Other creditors TN
| Nov ,e50 "Tle Reporter remarked that the Penn
lad N =
OF ten OF them" all new except three'-classihed rs
| follows: Broken 4: very dangerous" ! doubt
| IN, a., " uncertain distrlsted.' 2. II viii be
noted that Rhode Island and Pennsylvania We're among
| the states which did not require banks to deposit
securities TO protect their circulation. and hence 'he
| notes OF n bank which "dlstrusted,' were worth
about rs much as the potcs OF one which was BROKEN
THEY WERE H,LCYON DAYS INDEED.
In those hslcyon days 10 which the Democratic
n,ry looks back With warnings Of regret the failure
| n, bank did not always usually mean disaster
| and ruin 10 the banker. Queer practices pf"Vnned
| One OF them IS described In "Thompson's RspoTer
! OF February To- 1853. receiver OF an insolveht
| bank would advertise for short time IN one or TWO
obscure newspapers-the obscure 'he better for
his plrposehat all notes Of said bank muFt be pre-
scented for redemption within specified period. say
| Aour or six months or redemption would be refused
II Is not an uncommon thing" said The Reporter,
IN discussing this matter for the largest portion OF
he circulation to be thus shut ont. while brokers' and
local creditors par and shareholders divide hand
somely by reason OF the fraudulent reputation OF the
notes held by distant and scattered unfortunateS.'
1t was not an uncommon thing, either. for banks to
| manage so as to get their notes into circulation In
distant States and remote localities In order TO faci
| tate the fraud above described. Another neat and
profitable, and by means unusual mode OF swindling
| was for bank 20 employ agents to buy It's own
| notes at discount and thus turn an honest penny
al the expense OF the noeholders although the bitter
| was sometimes bitten, when an agent presented
| Che notes and demanded redemption at par.
| sometiems n bank tried 10 break down rival
bank By collecting quantity Of It's notes mud de
| handing that they be- redeemed. mis- often
| yrcccssful but II occasionally failed. In the
case described in " The Reporter" where banker In
| Hannibal. Mo-, undertook to break down rival In
CLlllicothe. Mo. He obtained $4,000 OF the notes
| nf the Chinicnfhe hank and nreSenied them ut tho