Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1892-11-24

Sensible people OF course know, what
ever some of them may be pleased to say
for purely partisan purposes, that there
is no more danger of this nation going
back to primitive and ng-out.growu
banking systems than there is Of our
tearing up our railways and re-estab-
fishing the old stage-coach systems of
transportation, and that under presi-
dent with Grover Cleveland's record and
under party policy which declares
straight-out that every dollar, whether
of paper or coin, shall be as good as
gold, the soundness of our financial OBJ
legations is anchored immovably for the
next four years at least, but since it
pleases our disappointed friends of the
Republican persuasion to Indulge in
amusingly frequent sneers, about wild
cat banks" and the like, the following
editorial from the Baltimore Sun will be
found pertinent and timely:
A correspondent is informed that the
state bank plank in the Democratic plat
form criticised by Republican orators dur
ing the campaign just ended proposed
IntTely Ine TtItul Oh IuG INV Which, llll-
poses tax of 10 per cent on the notes
issued by state banks. This tax was i'm
posed to stop the issue of state bank notes
in the interest of the national banking
system. The idea was to make market
for government bonds by allowing only
banks holding government bonds to issue
notes. This idea, helped by the tax of 10
per cent on state bank notes, was success
full. The national banks bought govern
ment bonds to base their circulation upon
and state bank notes were taxed ont of eX-
istence. There are objections to this One
is that in being deprived of the use of
state bank notes the people are deprived of
useful local currency, which expands
and contracts according to the VARYING
needs of the people. A second objection
is that government bonds are not the only
solid security upon which to base the issue
of notes; there We're issues of good state
bank notes-good as gold--lnng before gov
eminent bonds We're made the only
lawful security. A third objection is the
inelastic quality of the national bank
circulation. This circulation does not ex-
pand when there is increased demand for
money with good collateral, but on the
contrary contracts NJ such times, with the
result of producing financial panics. Some
tinanciers have called the existing national
banking system "a regular cyclone
breeuer.n a fourth and leading objection
bank notes are steadily decreasing i'll
volume, owing to the redemption Of the
bonds on which they are based. and must
after few years disappear altogether. On
October LIST, 1881, there were =, l32 national
banks, with an aggregate circulation of
500, 100000. On October LIST, 1881, there
were 3G77 national banks, with an aggre-
gate circulation of Sl3l 800 600. Evidently
borrowers, however good their collateral
find the national banks diminishing by
nearly 5000, 100000 the volume of currency
with which they may be accommodated
If the government continues to redeem its
bonds, the Sl3l 10000 of national bank
notes in use in October 1891, will, within
10 years, have disappeared altogether.
1t was with this inevitable contraction
of the currency in view that the Demo
cratic platform, seconded by the leading
financial journals Of the country, favored
the repeal Of the 10 per cent tax in urdel
to permit again the issue, under propel
restrictions, of state bank notes. Bcfor,
the civil war there We're state banking
systems that We're as safe for the note
holder as the national system is and ;
great deal more elastic. There were cthG
state banking systems that We're unsafe
wild cat. The proposal is to sanction
the issue of state bank notes, but unde
such regulation and rigid inspection tina
their notes will be perfectly safe. unde
such system banking facilities will be, j
Is thought brought within the reach o
the people To greater extent than u
present and the volume of the CurrenC
will expand and contract, according to th
varying needs Of borrowers with good co
lateral, much more freely than now. In
word, the change from the national bank
ing system, which il inevitable, will alsC
II Is believed, be safe and advantageous.