The Newberry herald and news. (Newberry, S.C.) 1884-1903, 1893-05-31
STATE BANKS OF ISSUE.
Handled with Rare Ability Dy an Ao'o'o
Financier, Who Thinks Our FatnefS
Were Not Born Idiots.

1Address of Col. john R. Goodwin
before the Tennessee Bankers Assocla-
tion.l
Mr. President aud Members of the
Tennessee Bankers Association:
GENTLEMEN-By request have pre-
pared this paper on State bank issue
and the repeal of the 10 per cent. tax
by Congress.
The history of banking extends so
far back in the dim past that one
scarcely knows where to commence IN
the discussion of subject fraught with
such vital interest, not only to the
bankers Of Tennessee, but to the gen.
eral public.
The Bank of Venice original. in
ll7l in loan to the republic, and
gradually assumed the form under
which it was for many centuries the
admiration of Europe, and only ceased
to exist when the city itself fell at the
conquest of Italy BY Napoleon in the
latter half of the eighteenth century.
The Bank of Genoa, established in
the thirteenth century, is said to have
fiourished as q successful financial in
stitution for over four centuries, and
much the same conditions gave rise to
its origin as did the Bank of Venice.
The Bank of Amsterdam was estab-
hshed in January, 1909, and bad sue
cessful. career until 1890, when it was
discovered that large portion OF its
immense deposits had disappeared
fifty years before, and yet the banks
credit had not suffered during that
period, nor until it became generally
known was the bank obliged to stop
business.
The Bank of Hamburg was estab-
lished in 1919, ten years after that Of
Amsterdam, and for somewhat similar
reasons. The two former banks men
toned above were the outgrowth of
loans by certain wealthy citizens to
their governments in time of great
financial pressure; the two latter were
established to give Uniform valde to
the various coins that were at that
, time iu circulation, many of which
were base, or partially so, some clipped
and others gouged, producing confu-
sion in values, requiring the service OF
an expert to determine their real worth.
The banks would receive them on de-
posit at their market value, and give
what they termed 'credit of account"
:. on their books, which the owner could
transfer to Others, but could not with
draw the coins.
1t would be interesting and instruc-
tive to give more extended history of
these noted financial institutions, if
time and occasion permitted. /, how
ever, merely mention them to show
that with their enormous capital, great
influence and long years Of business
existesce, they knew nothing Of the
power and efficiency of circulating
bank notes as means of payment.
= The Bank OF ofEngland was chartered
in 1894. The scheme of establishing
this bank is credited in history to the
genius of VIM. Patterson, who for
several years urged it on the govern
ment with great perseverance,, but it
had to encounter, like other schemes
for banks, opposition froEi various
quarters. ~
The Goldslniths, private bankers and
insurers, opposed it, as likely to lessen
the rate of interest and thereby dimin-
ish their profits. The cautious and
conservative regarded it as novelty
fraught with danger to the country,
and prophesied fearful results if the
bank was chartered. The fallacy of
this opposition is glariugly apparent
to-day to all who have the slightest
knowledge of banks and banking. But
these objects were not peculiar. It has
been universal in ali countries and at
all times, when change in the finan-
cial or banking system of nation or
people was. suggested or. attempted, it
iaattered not how rneritorious the plan
proposed, scores of objections would be
urged, because the change would neces-
sarily interfere with those interested
and benefited by continuing the old
system.
The Bank of England, now proba-
bly, the. most famous Institution of its
kind the world has ever known, has the
distinction of being the first bank that
circulated its own notes as currency,
and, and, singular as it may seem,
commenced the practice without au-
thority of law, either charter right or
special act of parliament. It is said to
have to come about in this way:
Bills of exchange, both foreign and
domestic, were much greaterin amount
in England at that time than all the
money and bullion in the country.
Under these circumstances and to IA
cilitate trade and commerce they first
issued the banks promissory notes to
mature at the time the bills would be
payable; but this was found cumber-
some and attended with difficulty, by
reason of notes having to be indorsed
from one holder to another. To over
come these difficulties and delays and
to facilitate industrial development it
was suggested by certain bold and in
genious financiers of that day to 60
long step farther and issue the banks
promissory notes payable On domand.
This was decided on by the governors
OF the bank, because it would insure
large business to the bank and would