Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1892-08-03
Schemes for Making Money.


Schemes for Making Money.
We have been greatly surprised TO find
such papers rs the staid, dignifed, and
able New York Journal Of Commerce advo-
eating the theory that one OF the merits of
the system OF local banks favored by so
many persons is that 1t could never be re-
commended 70 the people Of the whole
land. State banks Of issue. such as were
common in this country up to the time of
the war between the States, were expert
mental financial institutions. Such ipsti-
tuhons could not stand one moment in
the presence of national banks OF issue
which protect all the note-holders so per-
fectly that the notes of broken national
banks circulate everywhere without ques-
ticn.
We cannot believe that there ia any
better reason for desiring to return to the
old New York system. or the old Virginia
system. of putting out bank-notes than
the desire to make money. The New
York system. now so much lauded by
money-lenders. allowed bank having
100000 of specie in its vaults TO issue its
$4,000. the bank thus drawing interest
upon s2O0.ooo OF debt! Yes, that is tbs
boosted New York system. Congress
greatly improved upon this system when
IL provided that all the notes Of national
banks should be secured by q deposit of
United States bonds. The bank-notes
are as good as gold. The currency is the
best we ever had-incomparsbly the best.
This system we are gravely asked to throw
away. But the people will never do it.
1t is true the United States bonds will.
soon fall due. but that fact will not pre-
vent Congress from substituting system
of putting out notes much better than any
of the Stated bank notes of ante belluIn
days.
Pray study the facts. What did the
banks do with their issues under the New
York system? II they had branches they
sent their new circulating notes to those
branches to be by them put into circula-
1ion where there was less danger that the
public would demand the money-the
~-epecie-for these hundreds of thousands
of dollars of circulation based upon
-credit-based upon nothing-a castle
,-seady to tumble down whenever the people
became a little alarmed and demanded the
redemption of those bank notes. Yes,
under the New York system the banks i'm
mediately refused to pay IN specie when
ever the people demanded real money IN
any quantity for their notes. These notes
represented no specie. Certainly two
thirds of them had no money behind them.
Mr.. sHALsTKAD knows from experience
what the State-banking system is. He Is
old enough to recollect how that system
dlourished IN Ohio thirty years ago. He
says:
"people who have not forgotten the history OF
finances In this country, 10 regard 70 paper
money, will have no diflculty In determining
what this means. THAT is, the proposition to
repeal the tax on the Issues OF State banks.1
The interests OF the country demand that there
should be no paper money in circulation, except
chat authorized directly by the national govern
ment, and for which II Is responsible.
"There are in many Of the States Of the Union
gold stafc-bank charters stIll in existence There
Ss scarcely southern State that has not those
charters, and In many OF the eastern States also
tbey are extant With the removal, therefore,
Of The 10 per cent tar the paper-mil win be set
grinding Immediately and rapidly, and thus the
country financially win be set back to the days
preceding the war. whom the people lost more
Through hank failures and through discounts on
<paper money than Is required 70 pay the interest
ON the national debt and the pensions 70 soldiers.
1T Is true In the ante-war days the depreciation
OF paper currency was not called discount, but
she difference was made up by what was termed
exchange. In times OF panic 8, 10. and IL per
cent paid by merchants on bills Of exchange
payable In New York, ana there IL was payable
In currency. not In gold. Indeed, there was no
such thing as gold currency"
II is not at all probable -surely il cannot
be--that the tax on State-bank circulation
will be repealed for a long time. The ALI
ance party. the Peoples party, the Third
party, and other parties are all In favor of
the governments issuing all the currency.
Their Wild schemes will kill of the wild
scheme to put out no gold aud silver be-
cause these metals circulate everywhere,
but to put out the issues of State banks
because these will circulate only at home
MIR. HAIsrHAp concludes rs follows;
aThe experience Of the people in tho past
viii serve 70 prevent the adoption OF any Wild
schemes such as are advocated by the State
bank party or the Peoples party or the Sub
Treasury party, or any OF those wild scnemers
who Jump at conclusions and talk a great deal
without thinking much"
We trust that we have not in this article
used word which our good friends who
advocate irredeemable greenbacks or ir-
yedeemsble State-bank notes vii find
Objectionable.