Democratic Northwest. [volume] (Napoleon, Ohio) 1869-1894, 1893-09-14
state Banks of Issue.

state BANKS OF Issue.
When the plank Of the last national
Democratic platform referring To state
banks was read to the convention there
was wonderment among the dele
gates. No persons, party or newspa-
per had mentioned such a resolution
previous to its introduction by the
committee. The issue was not made
during the presidential campaign
though Republican papers did oc-
casionally twit the Democracy with a
disposition to revive the Withdrawing
schemes Of the ante-war period. AT
ter election and until recently the mat
ter was not discussed. Now, however,
the state bank question is gilmore than
passing consequence. 1t is evident
that somebody builded wiser than the
country knew when the state bank
plank was inserted in the Chicago plat
form. The administration is commit
ted to the idea and very likely before
the present session of congess shall end
the matter will assume definite shape.
Since the assumption by the govern
ment of the function of issuing the pa
per money of the country, there has
been no other kind, although the issue
by state authority is not denied by the
general government. This question is
not generally understood. State banks
under the present law are not profitable,
hence there ore none. In 1866 con-
gress placed tax of ten per cent on
them and that drove them out of COM
petition with the United States. The
tax was imposed under the constitu-
tional prerogative of the general gov
ernment to raise revenues, but the right
of issue was not denied to the state.
AS the state laws were mostly framed,
under the old system, bank bills were
a menanceto sound business, as the dis
astrous panic of 1857 plainly demon
strated. That's state banks cannot be
made as strong and as sound as nation
al banks, no person will affirm. The
reserved right Of examination may be
vested in the general government and
the secretary of the treasury may be
empowered to designate the line of Sc
curities that will be acceptable on
which to base circulation. Within the
next sixteen years every bond on which
national bankingis predicated willhave
matured. Something must be provid-
ed to take their place. Properly secur-
ed state bank bills will be preferable to
the national issue because the class
of securities the respective states can
authorize is more varied and equally as
government bonds. AS a rule there
are no better securities than state,
county and municipal bonds. Banks
organized with proper national and
state supervision would be very secure
and money there would serve double
local purpose. Capital, for instance,
might be invested in Toledo water
works bonds, those bonds deposited
with the treasur of state and bank bills
received for further transacting the
business of Toledo. The plan affords
the most natural increase of circula-
ton upon the safest lines of business.
There is no element of wild-catism
aboutlegitimate banking, and a nation
al law repeating the ten per cent. tax
on state banks, coupled with proper
safeguards by the nation and state
would be happy solution of the diff
culties in finance that threatened the
country. 1t is more than probable
that there will soon be a revival of
state banks of issue.-Toledo Record.