The midland journal. (Rising Sun, Md.) 1885-1947, 1893-10-20
State Banks With Silver Basis.

The blockhead appears most conspicuous
among Southern Congressman who, while
striving TO repeal :he tax on State banks, at
the same time are endeavoring 10 please the
President by voting against silver. In the
old State bank era, the policy most popular
and which was considered entirely safe,
was reserve of specie Of $1.00 10 $500 OF
paper issued by the bank. A bank known
to be thus fortified was never subject 10
fruns."
In place Of voting against the restoration
of silver to free coinage, every motive of
common sense should impel these State bank
statesmen to strain every nerve for the COM
plete free coinage of silver in order to make
their reserve specie reserve. They would
need no stocks and bonds of doubtful value
and uncertain stability as security for their
notes if they had 80 to so thousand silver
dollar in their vaults ready to redeem" on
demand all notes of the banks liable to be
presented. The panicy people would tire
long before carrying away 80 thousand hard
silver dollars.
AT an issue of three dollars 10 one of
specie a bank with 80 thousand silver dollars
in its vault would be infinitely better
equipped for profitable business than a
country national bank with $4,000 U. s.
bonds stored with the Comptroller for which
it received but $45, 900 in circulation.
Thirty thousand dollars of specie held in
its vault would enable the bank TO issue in
safety from runs 500 900 of its notes. This
issue with the loan of eighty or eighiy-fVe
per cent Of its deposits would equip bank
for much more profitable work than the
national bank enjoys.
State banks founded on the old specie
basis system of three to one could verv
readily secure the required specie from the
treasury by presenting silver certificates,
until all of the thousands of tons of silver
lying idle in the sub-treasuries were coined
into dollars and used tor State bank reserve.
This would absorb all the silver that would
be brought to the mint, and spread it over
the West and South. If their members of
congress had the gumption of a plantation
darby they would see the Leverage free COIN
age offers 10 the State bank project. We
are opposed to State banks and the issue Of
all non legal tender money, but express
surprise at the stupidity of those who advo-
cate them in not laying hold of the free
coinage of silver as the strongest lever they
could use. With the abundance of silver
they could command as a specie basis, the
State banks could defy Wall street.
There is at present fully 400 millions Of
silver coinable in the Treasury, which
would establish comparatively safe basis
for circulate of twelve hundred millions
of currency, with the addition Of eighty TO
one hundred millions annually under free
coinage, there would be almost a plethora
of money in the West and South. A coinage
of eighty to one hundred millions of silver
annually would furnish banking specie
reserve which would keep pace with the
demands of the rapidly developing West
and South, and defy New England and other
money exploiting sections of the East.
The danger of speculation and wild cat
business would be, as they always are,
present where money can be obtained freely.
but such danger and disaster resulting from
it would be less than the contraction policy
Of the national banks. AS the national
banks have been conducted State banks with
compulsory specie reserve of one to three
would be far less dangerous to the business
of the country than the results of the ration
al banks now before us. The devastation to
business they have caused is the greatest. bv
far. this country has ever known. Wall
street has been and is now the hot bed Of
wild cat schemes, gambling and speculation
supplied for its diabolical work BY the
money of the whole country through the
national banks.