The gold leaf. [volume] (Henderson, N.C.) 1881-1911, 1892-09-08

CCeu DIS d SdieSudTu anu kept the DdukS |
Iithin safe limits, both as to discounts
nd circulation. All banks in those
ines were State banks of issue. each
nd SO far as know the system was uni
ersally satisfactory. Occasionally bank
hat happened to be in the hands of
Incompetent or unfaithful officers would
all, but generally the losses were light
with some failures that | have
nOWn under the present system, and
he currency generally passed current in
il the connecting States, and the issue
+ some old established banks would
Ass current in most of the States. Now,
the system of State banks was salts
actory in that age, when there were few
and comparatively no tele-
sraph lines, cannot see any reason why
t would not be much more satisfactory !
low, when the most remote sec tons OF .
The country can communicate with each /
other in few moments time and ascer +,
tain the condition of any bank in any
country, as is now constantly done
between parties transacting business in
the different cities and towns and, iii
fact, in every part of the country. With
the greatly increased facilities in every
way for obtaining information with
respect to the solvency of corporations
and individuals throughout the country,
the standing OF banks of issue would
soon be well established. Moreover |
think the circulation of many banks of
large capital and high credit would soon
become we'll known and pass current i'll
any part OF the country. There might
be arrangements made between many
or all the banks in different sections of
the country by which they would receive
and pay out each others uotes, and in
that way establish a circulation that
would pass all over the country nearly
if not equally as we'll as that we now
have"
"What OF the security OF these bank
notes?"
'They might be secured, as some of
the banks notes were before the war, by
the deposit of State bonds or other
solvent securities, by individual liability
or by any other protection that the
legislature chose to throw around them,
as take it for granted that no legisla-
ture would adopt a system OF banking
for any State that would not properly
protect both the note holder and deposit
tor. 1t must not be forgotten that in
this day business is usually done by
check through the banks, and currency
enters to very small degree into the
actual business transactions of life, vet
it is necessary that currency should be
issued on a sound basis"
"WOuld this system necessarily inter
fere with the present banking system
and would currency thus issued supplant
or abolish greenbacks?"
"Not at all. On the contrary the
system proposed would simply supple
ment the present circulation, and one OF
it's great benefits would be that it would
supply some sections Of the country with
, circulation that have little or none
now and enable solvent good people
engaged in agricultural and other pur-
suits to obtain money at a reasonable
rate of interest, as | suppose that none
of the States would adopt a system OF
excluding land as security for the loan
of money
"Now tell me, in general terms, the
benefits to be derived from this system
by the people of OF the agricultural
States?"
'In the first place, under the present
banking system, the banks have nothing
to do business on except their capital
stock and their deposits, the larger por-
ton of which they pay enterest on; and
in some instances the highest legal rate
The national banks, it is true, do receive
some interest on the bonds of the govern
ment deposited for the small issue they
have out. When they run short OF
m oney, they can only raise it by borrow
ing, as in their general business they
usually are all their capital and surplus.
Under this system with the taxes they
have to pay and the necessary expenses
OF operating the banks, they are com
PEELED to charge a high rate OF interest
on all the money they loan, if they pay
their stockholders reasonable dividend.
l might also say that national banks
are prohibited by law from lending
money on real estate. Under the new
system, the banks would have their
capital, deposits and circulation upon
which to do business, and they would.
if properly managed, have generally a
surplus on hand either Of their own issue
Or other bank notes to use in case of
stringency. By this means and the fur
Their fact that they would pay no interest
on deposits, they would be able to make
good dividend for the and
yet charge but six per cent. for the use
of Cheir money, as do not remember q
single instance where more than six per
cent. was charged by any State bank
bafore the war. The bank of which
| was president charged only six per
cent. and yet paid a dividend of
ten per cent. By this system the
farmer that was responsible or could
give satisfactory security could borrow
money at six per cent. and run his farm
on cash basis and save from 20 to SO
per cent. per annum, which he now has
to pay, and especially under the system
OF being run by merchants, who sell him
his supplies on what is commonly called
crop time and thus have some voice
as to what time and at what price he
should sell his crops. Those persons
who now have their money deposited in
bank on interest, if under the new sys-
tenn they received nothing for it could
withdraw it, invest it in bank stock or
property, or loan it out at their pleas
ure. By this means, the farmers of the
country would save millions of dollars
annually in the cost of raising their
crops
cone OF the great pecuniary benefits to
the southern country would be the
creation in each section of such a large
volume of circulating medium to meet
all the wants Of the people at little cost
There would be no more transporting of
millions of dollars from the east to the
west and south for the moving of the
crops. The farmer would raise and
move the crops on their own circulation
and sell them for gold or exchange as
might be to their interest. 1t would
divorce these great producing sections
from their dependence upon the east for
the money they need in the conduct of
their business. The great products of
these sections would furnish far more
gold or bills of exchange than would be
necessary for the prompt redemption of
all their circulation that was returned
to them. 1t would not only furnish these
sections with financial facilities at reas-
enable cost, but would also give them !
feeling of financial Independence and
security, and all the people in the various
sections would naturally feel an interest
in maintaining the system and work
together not only to maintain the banks,
but to promote their circulation and
general business and prosperity. 1t