The Cecil Whig. [volume] (Elkton, Md.) 1841-current, 1893-05-27
DWIGGINS AND THE STATE
BANKS.

Zimri Dwigglns. that curious finan-
cier of weird name, may prove a public
benefactor. He should serve as a
public teacher in popular education
upon finance. 1t Is stated Mr.. Cleve-
land will not fail, in his message calling
the extra session OF the Congress, to
advise the repeal of the 10 per cent.
tax on the issue of currency notes by
state banks, as demanded by the
Chicago platform. The collapse of the
house of cards which Mr.. Dwiggins
built in Ohio, Iudians, Illinois and
Michigan recalls the days Of wildcat
currency thirty years ago. and anticl-
pates the period of uncertainty and
disaster which will follow the reintro-
ducticn of "cheap money" as pro
posed by the revival of state banks of
issue.
Mr.. Dwiggins organized eighty five
banks in the four states whose laws
were loose enough to permit his
peculiar system to 60 into operation.
His method was simple enough. He
would organize bank in little village
or town, without any capital whatever,
and invite deposits His central bank,
the Columbia of Chicago, would take a
block of The stock on condition that it
be made the depository Of the new
bank. The rest of the stock was dis
tributed among the most influential
men of the community, who were
further conciliated by being made
officers and directors. Then Mr..
Dwiggins would move upon another
village and start another bank. De
posts flowed into t',ese local banks and
in turn found their way to Chicago.
If one of the local "wind" banks were
pressed for money it was promptly
furnished by the central depository in
Chicago. For a time all went we'll.
The farmers received good interest on
their deposits, the stockholds were paid
big dividends and the officers enjoyed
bank could not meet the demands
upon 1t. The local feeders had already
been drained. The Chicago bank
went down and, like row of cards all
the branches fell after it.
If the existing act of Congress impos
ing prohibitory tax upon the issue OF
of currency by state banks had already
been repealed the scope of the Dwig
gins system of fnanc!ering would have
been vastly enlarged. The Columbia
Bank would have supplied to the
eighty. five local banks IN the four states
beautifully engraved notes, decorated
with the Nepoleonic feature OF Dwig
gins, in sums to suit, at an expense for
paper and printing of possibly two
cents a pound. There would have
been "cheap money" and plenty of it.
The farmers who deposited treasury or
national bank notes, with which they
had been paid for their crops, would
have had their checks promptly honor
ed with Diwggins notes. The Dwlg-
gins currency would have passed any
where, and for time the advocates of
cheap currency would have asserted
triumphantly that this money was just
as good as gold or national bank
notes.
But when the failure of the Columbia
Bank at Chicago occurred, if these
banks had been banks of issue, the
public would have had only the Dwig-
gins paper. Dwiggins has given the
country an "object lesson" of the beau
ties of the Democratic proposition to
allow banks organized under state laws
to issue currency. His failure and the
consequent suffering by the deluded
public of four states may not have been
in vain.