The times. [volume] (Richmond, Va.) 1890-1903, 1892-12-15

hank notes that the bank has deposited
with her her bonds to secure the notes.
This Is a very different proposition from
that first made by Mr. Shackeford, which
was that the banks should deposit her
bonds with her, and that she should there
unon guarantee the banks notes. II is
very clear to our minds that the States
Constitution forbids her to do this.
Mr. shackelford is wholly in error In
suspecting The Times to be no real friend
OF the movement TO ALLOW State banks to
issue currency. The Times believes the
proposition to be absolutely necessary to
a sound and healthy currency system.
The Times holds very radical Views re-
specting the conditions under which such
issues should be made. which, 1t has al
ready said, IT does not expect to see
adopted. The Times feels sure It's views
are right. but long use has so accus-
toned the public TO the idea that circu-
lation must be secured by n deposit OF
bonds that The Times expects to see the
recruitment still adhered to. 1t was Jean
Paul Frederick Richter who first OBJ
served that IL you hold out a stick In
front Of the bell weather OF flock Of
sheep and he jumps over It all the others
will jump at that spot although the stick
is withdrawn.
The true security Of a banks notes is
in the character Of the bank and of those
who manage it. A system of banks which
is permitted to grow up in obedience TO
the wants and censure OF the public will
put out sound notes and all the notes that
are needed One that is regulated and
controlled by Statute laws. which foster
here and impose restrictions there. will
never have at its command all the posi-
biities Of It's nature, and this is the rea-
son why The Times thinks banking should
be free, without any requirements that
the banks should make any kind Of de-
posit to secure their notes.
Mr.. shackelford says the banks would
be receiving interest upon their bonds
held by the State. This is very true, but
emergencies arise in the progress Of all
banking and commercial business when, in
order TO protect himself and hold things
compactly together. a man must have free
and undsturbed control of all his means.
The interest that ne has been drawing on
his bonds in the hands Of the State is no
compensation to him for the absence Of
that large part Of his capital at the mo-
ment when the crisis is on him. 1t is con-
siderate in the State to be thus thought |
full OF his interest in providing that he
shall certainly get good interest on his
capital, but 1t is that sort Of cruel con-
siderativeness which kills the beneficiary |
in all the cases in which parental gov |
eminent seeks to take care of the bust
ness operations Of its citizens. 1t is part |
OF philosophy which thinks that the
State can conduct mans business with
greater advantage and profit to him than
he can secure by conducting It for him
self
The popular nervousness regarding
State banks being left entirely free to
issue their notes in accordance with their
natural right, all starts from the idea and
come back to the idea that II left free
we shall have a currency that is at a dis
count away from home; and. II this should
turn out to be the case, we are firmly
persuaded 1t would be the very best thing
that could happen. Steam and electricity
have so minimized the part that coin and
paper currency perform In the CONNER
Cial transactions Of lifa tbat voora,, a.,
money centres, has come to be little more
than counters in a game of whist The
transactions Of the world are now operated
through balancing Of credits. The
clearing house in fact, when not in name.
swaps obligations and winds up trans
actions In utter contempt and disregard
Of money. The proportion of coin used
In the transactions of the Bank Of France
In 1886 was only i-2 per cent, instru-
ments of credit operating all the rest.
The Bank of England, in a daily average
business Of 100000 handled IA of per
cent. in coin, 81 IL in checks and drafts
and IL IL per cent. In bank notes. Tele-
81 Gphic and postal money orders now
dispense In large degree with the actual
transactions of notes. The report of the
Comptroller Of the Currency of the Uni
ted States Of December 5, 1892 shows that
the balances at the New York clearing
house paid in money in the past thirty
nine years averaged but "A per cent. 1t
also states from an examination of the
business Of 3,473 national banks on Sep
TENDER 10. 1892 that in the country at
arge but 9.S9 per cent. of transactions of
1881, 2O5,2l3 that day were represented by
cash. the balance, or 9O61 per cent. being
represented by checks. drafts, exchange
'r other substitutes for money.
The business of the world then is done
by exchanges and not by money, and
he great business of the world is entirely
Indifferent as to whether the State banks
re allowed to issue notes or whether they
ire not. The demand for bank notes
comes from the rural districts, which
S what is meant by their demand for
rec silver. These are without credits
amongst themselves to balance against
ZACH other, and being without them, they
ire compelled to have a medium Of ex-
hange to take their place. 1t is the rural
districts without mutual credits which
want and requires currency. The notes
4 State banks would be for the con-
enience of these and as thew are for