The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1892-10-19

The Viclousness OF tho state Bank Cur
rency.
Every citizen of Wisconsin who desires
20 vote intellgently at the coming election
should road the admirable exposition OF the
evils OF wildcat money, by III. ii. Camp, or
this city, which appears elsewhere in this
issue OF the Wisconsin. Mr.. Camp Is one
OF the foremost authorities in the North
west on financial subjects. lie Is not q
partisan, and at the tune this address was
furthermore than thirteen years ago
there was no expectation that the revival
of the old state bank currency would be-
come political issue. Ills address was
read before 4 convention of bankers. and
is q careful statement by business man
and iinancier TO business men and imam
ciers, of the facts regarding the workings
of the old state bank currency system IN
this part of the country.
From advance sheets OF an official report
now in course of preparation by the comp
trOller of the currency, In response TO a
congressional request for information on
the subject, the following, corroborating
and suppementlng Mr.. Camps review OF
the history Of state bank currency in this
section, is extracted:
On June so. 1885, the combined total bank
note circulstion OF the states OF Illinois and
Wisconsin,, all OF which stood at "A discount or
9per cent. amounted TO S9,l9S,CO and IT was
protected by specie reserve OF only 81, lSo, QUO
The total discount on the entire circulation
amounted 20 more than SS0O.U at per cent
and the discount had to be paid by note hold
crs as often as they paid out note OF either
state.
A Washington correspondent, after
studying this report, writes:
In july 1869. a convention of Wisconsin
bankers held ut Milwaukee fixed the discount
on Illinois bank notes at per cent. until Sep
TENDER 20, and per cent. thereatter-which
was the rate imposed by Illinois banks on the
notes of Wisconsin banks. This action IL
Illustrates another or the beauties of the "sys-
tenn to which the Democratic platform de-
olares the country must return. A like IL
lustration IL found in the action OF the In
diana banks, taken in April, 1889, when they
determined to throw out the notes OF all
Illinois and Wisconsin banks. At that time
the estimated circulation OF Illinois banks
amounted to $1,000, 600. and that Of Wisconsin
banks to $1,000 .OOO This action was justified
situated at distant and inaccessible
points. making the cost and difficulties of
redemption heavy, and that the Chicago banks
Disseminated against the Indiana banks.
Many people who do not remember the
history which Mr.. Camp and the comp
trOller OF the currency so wildly set forth
think that the loss of noteholders by the
collapse of unSound banks Will be all the
evil that would result from the re-estab-
liShment of state banks us banks OF issue.
This is mistake. Even if the state banks
were good, there wOuld be heavy tax
sentcd 10y the cost of exchange. With Il
national currency, q man who makes q
purchase IN New York or elsewhere out
side of the state can use his money at its
face value; but II state currency were in
vogue, q Wisconsin,. man making pur-
chaSeS in New York would find his Wis
conSin money subject TO discount. 1t has
been estimated that the loss by discounts
which would he entailcd upon the business
of the county if state bank currency were
revived would be 100000, 0G0 per annum.
This is only part of the utterly useless
tax that the vicious Democratic financial
policy would infllct upon the people. Ere
quent failures, periodical panicS, the
Suspension OF payments ana the utter
decentralization OF busineSs-theSe would
be the natural and necessary outcome of
the policy supported by the party of re-
trenchment and REFORM" represented by
John l.. Mitchell and Grover Cleveland
Eucntng Wisconsin,.
Slate Banks Worse Than Greenbackism.
Business men will not fail to see that the
banking system now proposed to the cOun-
try by the Chicago convention would, If
adopted, prove q worse financial affiiction
than the floodlng of the country with
greenbacks, which so large a portion of
that party recently favored. For OF green
backs 1t could be said that they would
have the government back of them, but if
the old system of state banks should he re-
yived they would soon become, as they did
before, sulccway for pouring over the
country flood of notes without proper
security. All would not be SO, but there
would be millions of unprotected or only
partially secured money III circulation.
President Harrison, IN his letter of ac-
ceptance, wildly recalled the condition of
affairs when the old system of state banks
was in its baleful prime. The postmaster
general "A tinn IN tho lns
Congress, presented some startling StatS-
ties on the failures of private banks, which
become OF mOmentOuS interest since the
Democrats have announced it TO be their
policy to remove all restrictions upon the
circulation of state banks. The pOStmas-
ter-general says:
THAT private banking institutions do
not afford adequate security to deposltOrs
rs most clearly demonstrated by the staff S.
tics at the command Of the government
showing the failure of private banking
nrms and contrasting these failures IN their
extent and effect with the losses incurred
through the insolvency of national banks
These statistics are comparatively limited.
out, such as they are, they constitute such
strong proof OF miSmanagcmcnt and reck-
leSSncSS OF concerns free from adequate
governmental or state restraint as 10 fur
nish the best evidence upon the point de-
sired In this discussion TO be emphasized
''From the beginning of the national
banking system until 1879 period of SIX
teen years, only eighty-one national banks
had become insovcnt, and the estimated
losses all told were Sj,2i0, lS9. 1t Is stated
in the publications on the subjectthat fifty
five banks, operating under systems in
vogue prior to the national banking sys-
tenn. failed in The single year lSfl. with an
aggregate capital OF over S67, 100000. And
It is also recorded that in nearly every in
stance the entire capital OF the banks
which failed was lost. The losses incl
dent to three or four failures of private
banking firms prior TO 1879 were equal ia
the total losses which had up TO that time
occurred under the national banking sys-
tenn. During three years ending January
], 1879, the failures of state and savings
banks and private banks in twenty-ihrec
states numbered 30, with losses amount
ing TO So, 6l6, COL.
"Thc average annual losses to creditors
by the insolvency of national banks dur
ing sixteen years prior to 1879 was $500, OH,
while that occasloned by the failure OF
banks other than national was for three
years prior TO 1870 not less than SIC. S72 zoo
per annum. The report of the comptroller
of the currency for 1879 shows that In the
states of Ohio and Illinois alone the losses
in three years through the failure of state
savings and private banks and bankers ag
gregated over S3.O00,000 of which about
$1,000 900 were in Ohio and about So, 00O. DOC