Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1893-03-11
SATURDAY. MARCH IL, 1893
State Banks in North Carolina.

koCN kAAA& - a. 1895
bill 10 authorize the establishment of a
new banking system in that State, not to-
day. nor tomorrow, nor even next year,
but when Congress shall have repealed the
law levyIng a tax of 10 per cent. upon the
circulating notes Of State banks. II we
might infer what the opinion of the last
Congress was on this subject from the
manner in which that body treated the de-
claration of the Chicago platform IN favor
OF abolishing that tax. we shall be COM
PEELED to come TO the conclusion that the
declaration aforesaid found no favor IL the
eyes OF congressman of either party. we
do not recall any attempt upon the part oil
n member, Republican or Democrat, TO
get Congress to pass upon this Chicago de-
claration. On the contrary, the proper
committee of tho House Of Representa-
tives (that on Banking and Currency, We
think refused by a vote almost unanl-
nous (aoout ten TO one) to endorse that
declaration.
Nevertheless. rs the DanviIe Register
asks US what we have to say touching the
new North Carolina law, Gin posse not IN
esse,) we will say something on the SUBJ
ject.
II will be next to impossible to abolish
the existing banking system without IN
fiicting irrcparable damage upon the u
fry. That ths National Government
should not engage in the banking bust
ness is q proposition which, when stated
in those words, we all agree to. But when
we recollect that the Federal Constitution
forbids any State from emitting bills OF
credit. and confers upon Congress the
power to pass any law which it may con-
slider expedient in order to establish q
uniform currency, we cannot but doubt
whether II is or is not the business OF
Congress to provide for a currency OF that
sort. To allow a State to charter banks
10 emit bills OF credit is TO allow the banks
TO do what the State itself cannot do;
and we may well revise our opinion on
this point.
The new North Caroline banking law
will certainly not commend itself to the
people of the other States, and we do not
believe it will be endorsed at home or ever
go into effect. We liken it to the attempt
of q single State TO establish q postal sys-
TEN of its own. The new law is indeed
not a law at all, hut bears the same rela-
ton to a law that an escrow does to q
deed. The referendum is to be resorted to
even after Congress repeats the 10 per
cent. tax: and the new statute will remain
imperative until the people ratlfy the pro-
position to issue -four millions of dollars
worth of State bonds TO be the basis of the
new banking system, and also ratlfy the
proposition that the State shall guarantee
the payment of the notes to be " emit
ted by the new bank. OF course the
people of North Carolina will never be
caught in such o predicament. Special-'ax
bonds are not popular in that State. We
might add that the Democratic party cam
not afford to father this sort of banking
system. There cannot be o better national
system OF banking than this country
already has; and a local system would be
intolerable. The people would rise III
their might and put down any party that
should dare to favor a system having no
merits, but based upon its demerits-a
system which would supply q currency
that would fee the commercial centres
and hide itself in the rural regions.
The Raleigh Chronicles reporter inter-
viewed recently on this subject Mr..
CHARLES f. JOHNSON. president of the
Raleigh Chamber of Commerce. He has a
level head, and in a few minutes gave all
sufficient reasons why the new banking
law should never be put into operation.
This he did. though he said he would favor
State banks, provided q system could be
devised which would hold its own" in
competition with the national banks.
"Otherwise all the deposits would go to
the national banks and State-bank cur
rencv would be at q discount" We nov
quote Mr.. JOHNSON:
81 believe a large issue OF bonds by the State
purely TO establish banks and float a State bank
currency would eventually prove more disas-
trous than TO issue bonds for internal improve
ment.
"If the state took one third OF the stock in
each banking association formed under this
law, which proposes TO make each s.ockholder
doubly liable, and this stock should amount TO
s4,0OO,O 900 as proposed, the STATE would DO la
BILE for the $4,000, 900 Of bonds given for this
stock aud also for 100000 Of stock liability,
making really 8 100000.
"a sovereign State cannot be sued by o citizen
Of the same state or any other State, so at least
enc third Of the capital stock Of each bank Will
have no double liability whatever-that Is. none
which can be enforced by law-and the double
liability Will apply TO only two thirds OF the
stocx. This two thirds may prove practically
worthless, particularly II tho proposal TO allow
one third Of the stock Of each bank 20 be based
upon land mortgages Is adopted.
Municipal, county, and corporation bonds
are Of too uncertain value to base upon them a
currency that must maintain q parity with the
nat.onaLbank currency and United States Trea-
sury notes"