Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1892-05-01
Ennkinr SYstems.


The financial world needs universal
currency. The financial qusck demands a
currency which will not circulate III the
money centres. but will remain III the
neirhborhood where it ia issued. Nheh
o,,r LEGISLATORS shall become foolish enough
20 try what its advocates suppose TO pe 4.
new scheme they will find that IL Is an oiu
and exploded theory Of banking ana they
will aeon be as desperate as HORACE GRLE-
Ky was when be asked a Hoosier II ne
couldn't pay him for his lecture IN good
counterfeits.r To provide for n currency
which nobody will have except the men
who reside in the neighborhood OF tine
hank issuing il ia 10 provide for re-
ducing the purchasing power Oh 'ne
currency. We in Virginia tried the Tree
banking system before the war. Ihese
free banks deposited State bonds with the
Treasurer Of the Commonwealth ana re-
ceiyed notes countersigned by that oihcer
| TO be issued bv the bank-that Is, TO DO
lent ont. The owners Of tho bonds re-
celyed. 1t is clear. the same sort OF uouoio
| interest, which IS now received Dy the ma
tional banks. But 1t is TO bs observed that
this free-banking system did not operate
AZ It's advocates expected II 20 operate.
| Good money flowed 1--WE might say ned) 20
the money centres. and the currency which
nobodv in those centres wanted OF wouidre
ceiye except al n discount. was always under
cloud. Negotiable paper, discounted 800
miles from Baltimore, was often (and IN
| the cases of some banks always made
uayaole in that city, and thus tho money
changers made the people Of Northern and
Northwestern Virginia paw their negoua-
bic notes IN money current at par IN Bal
timore. or. # they accepted Virginia cur
rency accepted it at a discount. A note
negotiable and payable in Baltimore was
not Just the thing wanted by the adyo-
Gates Of tho Virginia free-bankiug system,
and nobody has since the war seriously
proposed TO return 10 that banking system
because the notes issued under it would
not circulate away from home.
THIS exploded Virginia system Of bank
| inc a North Carolina farmer advocates IN
q letter in the Raleigh Mars oHd o1sTcD'
on the express ground that what he wants
Is q currency with " a limited area OF CIR
| culati0n "a State bank currency redeem
able III greeubacks Ii the greenbacks are
at par with gold and silver nothing viii be
gained by making the bank-notes redeem
able in them. IL they are not at par they
will be treated just as the currency issued
| by Yirginia's free banks were treated in
ante-bellum days. IT is utter eOlly to try
| to make currency not consisting OF real
money to perform fully the Office Of real
money. II is undoubtedly true that there
are meu who really believe that TO reduce
a currency's purchasing power would be TO
render it more desirable-or, 10 use their
| own words. that a currency having only q
/ limited area of circulation Is preferable 20
a currency as good in New York as 1t IS in
| Virginia.
This country has already q banking sys-
tenn which is the best il ever had. Tho
notes of our national hanks are az good IN
California rs in Richmond. though the
bank issuing them may be located IN tho
latter place. No Baltimore or New York
banker or broker can use his money under
that system in the manner which we have
| lust referred 10 as having been the custom
in Northern and Northwestern Virginia in
ante-bollum DAYS. Yes. If you issue a cur
rency having only a limited area or
"sphere" of circulation you viii issue q
currency which viii always be a. a dis
count IN the money centres. This dis
count will mark the difference in price be-
tween q currency Of Limited circulation
and o currency OF universal circulation,
such as that issued By our national banks.
There is no way in which the operation
| of the laws of Nature can be stayed.