The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1892-09-24
A VICIOUS FINANCIAL PROPOSITION.

state DaDk notes. ln1S TAX was lmpcSeu
to drive State bank notes out of exist
ence, and thereby make room for a gov
eminent currency consisting of green
backs and national bank notes. The
for the establishment of State and local
banks of issue. II could have no other
object, and certainly would have that
effect. The declaration in the Demo-
cratic platform raises the issue distinct
ly and challenges every voter to decide
between the present currency system
and q system of State and local bank is
sues. No more important question could
be presented to the American people.
Everybody knows how good our pres
eDt currency system is, but not every
body knows or stops to think how bad
the old system was which the Democrats
propose to re-establish. The President
says in his letter of acceptance:
The Democratic party, if Entrusted with
the controf OF the government. Is now
pledged to repeal the tax On State bank Is
sues, with q view to putting into clrcula-
ton again. under such diverse LEGISLATION
NO WV oLobOo AAnI " - hOVo " hhA 40
sues. Only those who. In the years before
the war, experienced the inconvenience
and losses attendant upon the use OF such
money can appreciate what q return to
of q bill was then often 40 indication
of it's value. The bank detector of
yesterday was not q safe guide to-day as
TO credit or values. Merchants deposited
several times during the day lest the hour
of bank closing should show a depreciation
of the money X in the morning. The
traveller could not use in a journey to the
East the issues of the most solvent banks
OF the West; and In consequence o morley
changers Office was the familiar neighbOr
of the ticket-ofice and the lunch-cOunteT.
The farmer and the laborer found the
money received for their products or their
labor deprecated when they came to make
their purchases; and the whole business OF
the country was hindered and burdened.
Every person who knows anything
about the banking and monetary condi-
tons which prevailed before the adop-
ton of the national bank system knows
this statemen by the President doesnot
exaggerate the case. Mr.. Blaine, in his
recent letter. refers to the same subject
as follows:
Until the war we had the worst currency
system of any enlightened country in the
WOTlu. Inc Dhnho tAl6teu by tuOuSduuS
throughout the United States. Wherever
one of them failed the result was a large
loss and great distress among the people.
No one was responsible for their bills, and
they were generally found in the pockets OF
thousands of laboring men, to whom they
were n total loss. without any REDEEM ptiOn
whatever. OF the State banks IL was often
and truly said that their debts were the
measure of their profits. They have caused
en- aggregate loss Of hundreds OF millions
- 11lf.. - Tho Anartoo,, nonnlo Stnao
the close of the war all has been different
Every paper dollar that circnlates among
the people has the United States behind
as guarantee. All the banks are under
the control of the national govern
ment. and If they fail as financial Insti-
tutions the government has taken care
that their bills shall be covered by securi-
ties deposited In government vaults. I'm
der these circumstance 1t is a matter for
extraordinary surprise that the Democratic
convention should deliberately pass reso-
buttons for the repeal of the tax on State
banks.
The palpable effect of this policy. if car
ried out, would be TO cheat the poor man
adopted and their circulation again be is
sued, no device could be more deadly for
tho deception and despoiimcnt of all the
commercial and laboring classes. Were the
system of state banks revived we would
again have 1t discounted at State lines,
large exchange rates would be charged in
the great commercial c%enters, and the gen.
eral suspicion of every bill offered In pay
ment would cause q liquidation every few
years that wonld be q destructive loss to
the innocent holders of bills and q corre-
spending profit to the parties owning the
banks.
There are thousands of men still liv-
ing who were engaged in active bust
ness before the war, and who can testify
from personal experience as to the
truthfulness of these statements in re-
gard t O the character of the paper cur
rency then in use.
For several years before the war Iu-
diana had two kinds of banks of issue
the State Bank, with it's branches, and
the free baNks. All existed under State
laws. The younger generation of bust
ness men can form but a faint concep-
ton of the evils of the old system. The
State bank and the free banks were con-
stantly at war with each other, and be-
tween the two the people were unmer-
cifully 1eeced. The Sentinel of July
IA, 1859, editorially referred to the State
Bank as "a sort of a Know-nothing
money lodge whose influences are
gradually extending over the entire
State. All it's councils being in secret,
the public only know what the officers
| think it for their interest to communi.
| cate or what its developments make
known to them"
There were at that time scores of free
! banks of issue in Indiana. Many OF
them were located at small, inaccessible
towns and crossroads villages. the OBJ
ject being to get as far out of the way
as possible, in order to avoid having
their notes presented for redemption.
1t took an officer with a search warrant
to find some of them, and when run to
earth they we're likely to go up in q puff
of smoke.
The semi-annual statement of the
Auditor of State, issued in April, 1869
showing the condition of the free banks
of Indiana. reported the following banks
as having withdrawn their securities
with the following outstanding circula'
ton: Brookville Bank. redeemed at TIN,
Bank of Brookville. S12. 004; Bank o.
Syracuse, redeemed at the Bank o.
Goshen, $1,000; Merchants and Me
chanics' Bank, redeemed at Branch o
the Bank of the State, NewAlbany. 1857
Fayette County Bank. redeemed at thu
R,anSb ,f Tho Sfafa Rank Of Capuaro