The times. [volume] (Richmond, Va.) 1890-1903, 1893-09-14
How the National Bank Act Hurts.

Editor The Times: The war Congress
Of 1862 abolished State bank circulation,
by the continuance OF a tax Ct ten per
cent. The Supreme Court has sustained
this act The argument, therefore, must
be confined to the eXpediency and not
the constitutionality OF the control OF
all circulating notes by the general gov
eminent The whole argument is that
Congress is wise and honest enough TO
give us a safe circulation while the States
are not Speaking for Virginia, I deny
the propostion Our General Assembly
is as honest and as wise as any assembled
Congress. and knows the needs Of our
people better. and needs the revenue Of
bank taxation more If the existing ma
tonal law is a good one, the best in fact
that can be devised, our General Assem-
bly, can enact IL as a State law. and VIII
do so, unless It can be shown that there
are some glaring defects in 1t. Will not
deny that the circulation is well secured
under the present law, and has the merit
Of uniformity all over the Union. II
these important qualities can be secured
under State control, and other most I'M
lust provisions OF the law abolished,
the change should be made. II may be
as well TO admit that security satisfac-
tory 10 all sections, and uniformity,
cannot be had without a general Fede-
raj law, like the Interstate Commerce
law. applicable TO all the States IT, there
fore, no other means can be found TO
compass that, but the tax as at present,
(Which, as 1 have said, the Courts sus-
tain had we not better compromise on
that, until the public mind becomes more
enlightened. BY giving up this point we
draw 10 our support thousands, who fear
the return Of the wild cat circulation so
IL, 9,a Fpo1 Of hal
tury ago But / propose to call attention
to the gross evils of the present National
banking law Il requires that five per
cent of the circulation Of every bank in
the country. whether In Texas, or ore
gon, or Maine, shall be kept in Washing
ton as a redistributlng fund. and that
fifteen per cent. of its deposits shall be
kept either I'm its vaults or in one of the
few reserve cities, and as Ii is not pro-
ftabe to keep a large amount of money
idle i'm the bank safe. and as New York
is the chief reserve city, II becomes sub
stantially a mandate Of the law, that
every National bank in the country
shall send an amount equal in the ave-
rage 10 one third Of its capital to New
York and Washington. Some Of the New
York banks allow low rate OF interest
on this forced loan; the average is prob
ably equal 10 one per cent. per annum.
This money is used in sustaining the enor-
nous speculatiOns that have made New
York the dictator Of every enterprise In
the country needing money. Every town
in the country however small Of It has
a National bank) is compelled by this
law to contribute one third of its capt.
tai 10 swell the vast sum that enables
New York to control the financial des-
tiny Of the land. is IL any wonder that
4 Il IL
ceived, goes 10 New York for exploitation?
Be they green-goods men. managers of
q cordase company, or of a terminal
company, they can find the money, con-
ceal their identity, and cover up their
nefarious acts in the maze Of the New
York Stock Exchange. whose power
welding as II does a capital Of such vast
amount. is largely maintained by the
contributions OF the country banks. 1t
Is contended that the banks should be
required 10 redeem their issues at some
money centre, and not force the note
holder Ignorant, perhaps. OF geography
TO seek his money at some obscure VIII
lage bank counter Granted but is there
no safe middle course, would 1t not full
" protect the public, and distribute the
money over the country, II the capital
citv OF each State were made the re-
deeming centre and reserve city for all
the banks Of that State? Why make the
whole country tributary to New York?
Why, for example, force Texas to send
10 New York for money 10 move her cot
ton crop, paying high interest therefor.
and send the money back to New York
when the bales reach the seaport? Why
might not the banks Of that State keep
their redeeming agency and reserve at
Austin or Gal seston, and expand
their isues when the money was needed
and contract automatically when the crop
was moved.
have tried TO show the most serious
defects in the present law. There are
others. but Il would Occupy too much OF
your space to expose oil Of them.