Juniata sentinel and Republican. [volume] (Mifflintown, Juniata County, Pa.) 1873-1955, 1892-10-19

banks vas from II to % per cent.
The bills issued by small banks in
those localities, though the banks
were perfectly sound aud of good re
p te in their respective towns would
1ly ibs taken at from 5 to 10 per
cent discount. This was ON account
of the general uncertainty and dis
trust. That this feeling was not un-
warranted is shown by the following
statement, taken from message of
the Governor of Indiana on the
formation ot blnks in that Common
wealth.
THE sPECULAToR
''The speculator comes to Indiana
with bundle of notes in one hand
and the stock in the other. Ia
twenty-four hours he is on his way
to some distant portion of the Union
to circulate what he denominates a
legal tender currency authorized by
the State of Indiana He has nomi
nally located his bank in some remote
part of the State, difficult of access,
where he knows that no banking
facilities are required, and intends
that his notes shall 60 into the hands
of persons who will have no means
of demanding their redemption"
A Governor of New Jersey said
officially: "In many cases our banks,
though ostensibly located in New
Jersey, have their whole bu 5iness
operators conducted by brokers in
other States V
THE BANEs BROKE.
Was it to be wondered at that
banks broke occasionally The Far
mers' Exchrgo Bank of Gloucester,
Mass was an old-time example. It
was organized with nominal capital
of $2,O00,OOO. OF this S19, 9,14LS6
was paid ir. The directors subse-
quently Withdrew their subscriptions
to the amount of $16,G6O rs, leaving
$3,081,11 for working capital. A
gifted financial genius bought ont
eleven of the directors for $500
each in notes of the banks issue
and proceeded to administer the
affairs Of the institution himself.
After he had borrowed from the
bank S160, ,265 on personal security.
it broke for some upacc0uutable
reason. The outstanding bank notes
in circulation were estimated at
S5So,00O, no exlct record having
been kept To redeem this there was
carefully boarded in the vaults Just
$S6.46. Ais, for the fame of Ward
aod Ivesl What can this degenerate
uge show to match that specimen of
finarciering?
NOT ALL so LOOSE.
OF course all the States were not
so loose Is Indians and New Jersey
in their banking laws; The evil
rigited itself to certain extent. and
the old States tried various legisla-
tive remedies. Ia New England
what was known as the Suffolk bank
system grew up This was a volun-
iary agreement by which all the 500
banks in that part of the country
kept balances at the Suffolk Bank in
Boston, and made that bank their
redemption agent Banks which
refused join in this arrangement had
acceptance Of their notes refused by
the confederated banks; and were
compelled to submit OF Withdraw
their circulation. This system gave
the New England banks reputation
for sorndness throughout the country
New York had organized by law
a State banking department, and re-
quired banks to deposit therein
stocks aud pledges Of real estate to
secure their notes When the bank
failed tno Controller resljzed on the
deposit. and settled all Gains and
outstanding notes so far as the assets
would ga. Other States had systems
Of inspection, but the nature of the
Investigation may be appreciated
from the old tradition that the coach
that brought the commissioners also
bore tie gold whose presence was to
prove the solvency of the blnk wnen
It's vaults were inspected.
SPECIE FICTION.
Each bank note bore on its face Il
promise to pay specified amount,
presumably in specie, but this prom
ise was largely fiction. There was
a courtesy among banks in accor
dance with which they rarely called
on one another TO redeem their
notes. More than that, the banks
would cubine and boycott any i'll
advised individual who insisted on
having gold for his notes.