Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1893-07-02
SUNDAY July 2. 1893.
Confidence as Necessary as solvency


In commenting upon an article which re-
Gently appeared IN the DISPATCH Ne"
York commercial paper says that no state
in the Union would think OF putting out
circulating notes Of doubtful value, OF
authorize any bank to put them out. And
vet our New York contemporary remark
was based upon an article in the DISPATCH
stating that Tennessee had already pro-
yided for allowing local banks in that
State TO issue paper currency TO the
amount of 1926, 900, 900 just as soon as Con-
PRESS shall have repealed the Federal law
taxing the issues of State banks.
Experience has taught the people OF this
country lessen on that subject. WHAT
ever theory person may entertain as 70
what local banks hereafter to be chartered
will do in case they are permitted to have
their Own way, it is well-known hlstori-
cal fact that tho independent and other
State bank systems have been tried and
found wanting. Their paper issues were
Systematically put out as far from home
AS possible. Large banks in the cities
established branches IN small country VII
lagos. and through those branches crowd
ed their circulating notes into the none
tary channels Of tho country. whenever
panic in the money market or any I'M
usual disturbance OF the same occurred
the banks forthwith refused to redeem
their notes in specie, and straightwsy the
banks and bankers in New York, Balti.
more, and other large cities dlscredited
those notes and charged premium upon
their own notes. Indeed, they did not
wait for panic to excuse them for thus
charging O premium upon their own notes,
but so managed as to keep the notes OF
country banks always ut discount.
IL must be recollected. too. that the
State banks OF ante-bcllum days issued
three dollars Of paper for every dollar OF
silver and gold which they had in their
vaults. Does any would-be Spectator in
the community's misfortunes natter HIM
self that the people will ever again con-
sent to confer upon any local banks, or
other banks, the privilege OF drawing IN
terost upon three dollars for every dollar
of real money they shall have
The oamor raised against the ma
tional banks by tho Populists and other
advocates Of irredoemable greenbacks
because they are allowed TO issue
circulating notes 30 the value of 30 per
cent. of tho government bonds they own Is
senseless and foolish, seeing that the gov
ernment has TO pay the interest upon those
bonds. let them DO IN whosesooyer hands
they may be. But similar clam0rs would
swell 10 n volume of sound that would be
fearful should the banks now he granted
the right to issue paper currency or State
bank notes based not upon national bonds,
nor upon property, but upon their debts.
In word. if the proposition under con-
sideration is a proposition to repeal the
tax Oh the circulating notes Of state banks
and return to tho banking system which
obtained in this country prior to the war
between the States, then there may be ex-
pected from tho voters a swelling chorus
of Noes" when they get an opportunity
70 make known their wishes in the pre-
misses.
We have heretofore made tho point
and we expect it TO be in everybody's
mouth before long-that il is as important
for the public 10 know that the currency
IL good as for the currency to be good. If
the people lack confidence in bank they
are not going TO accept its circulating
notes as a substitute for real money. The
currency issued In the Pacific States, or IN
the Rocky Mountain States. or in the
northwestern States. might be as good in
fact as that issued in New York, or Rich
mond, or Baltimore, or Boston, yet the
people would not know that fact. and so
experts would have TO keep on hand. es
was the custom up to 1861, Counterfeit De-
tectors enabling them TO distinguish be-
tween a counterfeit note and genuine
note. whilst tho average man. not being an
expert, would be at the mercy of the
persons no dwelt with, or from
whom he might obtain bis cur
rency. II Tennessee is entitled to
issue twenty-five millions of the so-called
dollars of this homo-staying currency,
Virginia would be entitled to raise like
amount. and New York State would bt
entitled to issue well-nigh hundred mil
lions OF the same sort OF currency, o.
which last sum sixty-six millions of dollars
would be based upon debts aud not upor
any secure toundation-that is, If we are
are gong to return to the old bankinG
system; and if We are not going to return
to that, the spectators on the com
munity's misfortunes would as lief as no
allow the present national-bsnk system t.
continue in existence. The object of thu
demand Tor State bank notes is to max
money out of the people. OF course it is
Banks do notissue circulating notes in tn
interest OF anybody but themselves, an'
we shall deceive ourselves il we calculate
upon their doing so for any other reasol
than the one limited at. Business Is busi
mass ~