Middletown transcript., 1892-09-29
STATE BANKS.
lConcluded from First Page

HI 1COt4 " uOAh UtkS y AStNs
stItutions Of New York, all based upon
identically the same plan as that OF the
national banking system, went down
carrying with them disaster to all spec
ulators, the farmers, merchants, mill
owners, and other manufacturers OF
Delaware went on in the even tenor OF
their way. The people had faith in
their banks and bank notes, and it suf-
feed. saved from anxiety by the con-
sciousness that the free banking system
of Delaware was sufficiently potent to
carry them through tine panic, and II
did. land let me say right here,
parenthetically, that some of the finest
church buildings and most stately farm
houses in st. Georges hundred were
built during, and shortly after, that
panic. Let those who doubt make
Inquiries.
The great bulk of the business credits
throughout the world. extended by
those who dispose of, or market, the
products of labor, are based soley upon
the reputation for honesty, and good
business qualities of the purchasers.
The inquiry is not, "what IS ne
worth ?" but, "has he always paid his
bills promptly ?" If that question Is
answered affirmatively, there is not one
merchant In a hundred who will not
extend credit to the applicant unless
there is something suspicious about the
amount of credit asked. It is because
OF this faith of man in man that a
State bank, well conducted, can be OF
vastly more benefit to country COM
munity than q national bank. The
note of the bank will suffice to settle
every balance created by trade in that
community, and it is always in possess
sion of those notes.
Should the business of Middletown
require an average supply Of circulating
medium to the amount of $16O, 600,
bank with capital Of perhaps S5O,OOO,
would be organized with power to loan
its bills under certain restricted con-
ditions to the extent OF $125, ,OOO.
Whsn the community required but
SCI, 900, the bank would have in its
vaults $50, 900 Of its bills not in use,
nor would the officers be compelled to
nav interest on unused money as they
now do to the government under the
national bank system. Should the de-
mands of the community reach $685.
600, the State bank would have power
to meet that requirement, and should
the rate Of interest be but 6 per cent. at
Middletown, and stringency in the
money market make money worth Sper
cent. In New York, the money which
Mr.. Blank owed the Middletown bank,
amounting possibly to $25, 900, due and
paid into the bank. with its own issue),
would not be spirited away to New
York, attracted thither by the higher
rate Of interest. but it would remain
in the vaults Of the bank of issue until
paid out on the call of some applicant
for it, who was part of the commun-
ity of Middletown.
That State bank bills can be made a |
safe currency is fully attested by the
free banking system of England and
especially by the free banks of Scotland,
and was quite fully proven by Della
wares experience before The War.
That it is an elastic currency is un-
questionobly true, and that it serves
the community in which the bank is
located much better than the national
banking system is generally admitted
by the business men of the country
districts who have had any knowledge |
of the State bank system.
There is, however, one objection
argued against the State banks that
merits consideration. When these
banks fall into the hands of dishonest
men they can be used to impose upon
ignorance that is true and very
serious objection to it, but the national
banks are open to the same objection.
not its notes, but the banking system
itself. It is powerful monopoly, not
organized for the purpose of protecting
labor, but for the purpose of getting
more of the productions of labor into
the possession of the stockholders Of the
national bank than they could by other
method, and it will be because of the
ignorance of the laborers If its power to
despoil them be longer continued.
It would be cheaper for them oc-
casionally to get worthless wild
cat' bank note in payment for few
days. labor than to place the banking
powers OF this country in the control
of such system as that of our national
banks. Their power for harm is not
now very great, owing doubtless to the
enormous coinage of silver and the
general circulation of silver notes; but
in time that safeguard will cease to
exist, and IL to the national banks are
given the monopoly Of the circu lating
medium, q greater Gala nifty will fall
upon the laborers than occasionally
being paid for labor with "wild cat"
note.
It's sometimes said patent medicines
are for the ignorant. The doctors
foster this idea. 1.-The people," we're