The gold leaf. [volume] (Henderson, N.C.) 1881-1911, 1893-07-20
STATE BANKS OF ISSUE.
| Atlanta Constitution. |

If the Democratic platform is TO be
carried out as thoroughly as the people
desire the Democratic majority in
congress should be prepared to repeal
the 10 per cent. prohibitory tax on the
circulation of state banks. The re-
commentator to this effect made by
the Democratic party at Chicago
amounts to a command to the majority
in congress, and it is regarded by the
people as definite and an important
feature Of the program me of financial
relief and reform.
The repeal of this tax will open a
new aui an inviting field TO those
insti,i,.ons, Which, operating under
the Lt,Ivr2l banking laws, have been
compelled to contract and call in their
notes because the basis of circulation
government bonds-has become too
costly to yield profit In order to
take advantage Of the circulation
clause, the banks are compelled TO
lock up in the treasury as much money
IS their currency circulation amounts
to, and the benefit to the people and
to business is inappreciable.
Whenever the statement is made
that the people need more money, the
northeastern linanciers are in the
habit Of parading the fact that it is
credit and not money that transaCts
/ the business of the country. We are
told that o2 per cent. Of all business
transactions represent credit, while
| only s per cent. represent cash. The
northeastern iinanciers deal in such
smooth statements and opinions that
it is difficult to say whether they re-
gard government notes as cash or
credit. We presume they would say
bank draft represents credit, but it is
as close to cash as treasury note.
However, leaving such considera-
tons out Of view, we are led to believe
that credit is regarded by these
tinanciers as 4 very big thing. The
fact is important, for it becomes, when
rightly understood and applied, an
| important argument in favor of state
banks Of issue IF credit is OF such
importance in the business world, why
should i not bc utilized in the south
and west for ali it is worth. In the
northeast 4 system of trade and com
merciai credits has been built up
which practically abolishes cash. 1t
has been built up to fit the conditions
Of trade and commerce there, and it
disposes Of many troublesome and
cumbersome problems.
This being the case, why should not
the people Of the south and west, or
wherever there is a chronic scarcity Of
cash, and a consequent depression Of
business energies, be permitted to es-
tablish a system whereby their own
credit may be utilized and profitably
employed? What safer or more con
vcn,cnt shape can this credit take than
state bank notes based on local bonds
Or some other available and convert-
bic security? If this form Of credit is
satisfactory 10 any state or section,
what right have New York or Boston
inanciers to protest against its employ
mcnt? There is plenty Of money in
these cities and in other financial cen
tiers ID the north Of US, but that fact
doesn't help the situation here par
ticle \ man who has plenty Of money
within reach is apt 10 conclude that
there IS imitation in the land but what
r;sh. has he to protest Or even to in
dulge in criticism, when ! person less
tavorabIy situated proposes TO tide
over hard times by utilizing his credit
We can never hope 10 understand
the eminent financial writers who in
one breath extol credit, and, in the
. next, declare that form ol it as old
+ as commerce itself, is in the nature D
w.ldca;isn.