The gold leaf. [volume] (Henderson, N.C.) 1881-1911, 1893-03-02
BANKING BILLS PENDING.
Col. Burgwyn interviewed Regard
ing the Matter--The Suggestions
of the Business Mems Meeting
Fully Brought Out.
Estate Chronicle. /


Estate Chronicle.l
Meeting with Col. Burgwyn, of Hender-
son, member of the Business Mems Com
mittee on Banks, We requested to be al
lowed to interview him with reference to
what the committee suggested and we
publish the same as explanatory of the
bills now pending before the legislature.
Reporter-What report or suggestion
did the Banking Committee of the Bust
ness Mems Association make to the Joint
committee on Banks and Currency in the
House and Senate?
Answer-They made two reports, a
verbal one by Mr.. Battle, OF Rocky
Mount, representing the views of a ma
jOrity OF the committee, and a written
one by myself.
Reporter-What were the points of diff
ference?
Answer-Only as to the manner in which
| notes issued by the banks are to be Sc
! cured.
The majority favored using the bonds
OF the State now outstanding to secure
two thirds OF the notes, and the other
third to be based upon the assets of the
bank and the double liability of the
stockholders. The minority report ia
vored the issue by the State of new
bonds to be called thanking bonds" to
be used to secure two thirds of the bank s
circulation, the other third to be based
upon real estate loans secured by unin.
numbered property with twice the amount
OF the loan as ascertained by the tax
valuation OF the land. This plan also
provides that the State shall subscribe
! I'd IF ha %ol ok- IS II l..
organized under the law and shall paw
her subscription in these banking bonds
and in addition the State guarantees
the payment of the notes of the bank.
Reporter-What profit would accrue
to the State?
Answer-She would get her dividend as
stakeholder in the bank, and the banks
pay tax on both circulation and de.
posts for the privileges of the franchise
Reporter-How many of these banking
bonds would you issue?
AnsWer-As many as are necessary not
exceeding four million. They are to run
for fifty years and bear 4 per cent. interest
Reporter-How much would this plan
increase the money in circulation in the
State?
| Answer-By two thirds the amount OF
capital employed in banking in theState
At present there is banking capital in the
State, including national, state and pri-
vate bankers, about $5,OOO,OOO, but
there is only $6OO,O 900 of national bank
| notes Ill circulation and no State bank
notes. Before the war there was more
than $S ,OOO,O 900 OF banking capital in
the State and over Sc, 100000 of bank
notes in circulation. We therefore have
but $l OF bank notes in circulation to-
day, while we had $40 before the war
and but little more than one half as
much banking capital and yet our popu-
latlOn is nearly twice as much and our
taxable valuation more than twice as
large as before the war.
| RepOrter-Are there not some Objec-
lions to the State becoming a stock
holder?
! Answer-1es, and if there were an
abundance of money ready to go into
banking in North Carolina as there is in
other states of the Union, [ would not
approve OF such plan. But, as we have
seen, we are very much in need of more
banking capital in the State. Before the
war the State was d stakeholder in her
state banks and the plan worked well.
When the bank of North Carolina was
chartered in 1859 the State invested the
funds of the University and the educa-
tional fund in the stock of the bank, and
the notes of the bank and the security OF
the investment, but for the war, would
have been to-day equal to any,
Representatives. illustrate the work
ing of the plan.
Answer-Suppose five OR more persons
In any town or county wish to start a
bank with $4,000 capital. The State
subscribes $4,000 in these bonds. The
bonds are deposited with the State
comptroller, and he issues to the bank
$1O, 900 in notes, and the bank issues to
the state it's certificate of stock for 3d.
900. The other $4,000 of capital is
paid by the other stockholders in money
ThereupOn the bank takes as much as
$lO, 900 OF this and lends it out to the
people in the country around on mort
gage for not less than five years at six
per cent. interest. The bank deposits
these mortgage notes with the State
comptroller, and he issues the bank
$500 more of bank notes. From these
two transactions there has been put in
circulation in that community $4,000
in bank notes, where there was not one
in circulation before. There is still re.
naming $40, 900 of the banks capital
|
treasurer $40, 900 more of these bank.
ing bonds, and deposit them with the
state comptroller and get $4,000 more
of bank notes.
Reporter-What expense does this en-.
tail on this state?
Answer-The state has to provide fo1
the interest on these bonds, but she
gets her dividend on her stock for which
these bonds are issued. If the dividend
equals per cent. she will be repaid the
interest. AS we can safely estimate the
dividend of the banks operating under
this act will be per cent. the state will
make profit equal to at least pei
cent. on the amount of these bonds she
issues to the banks. In addition the tax
on the banks circulation and deposits
brings in fund that will be nply suffi
Gent to pay oil expenses of the banking
department and provide safety funG
with which to pay the notes of any bank
that may get into financial difficulty.
Reporter-Is not the feature of making
land a basis for one third of the banks
circulation open to criticism?
Answer-Yes, but if we intend to ben
eft the people by the banking system WI
are to establish we must base it on what
we have, not on what we have to buy.
If we must go to New York to buy
North Carolina bonds and pay 500 OF
more for a North Carolina bond, anG
bring back that bond to be deposited
with the state comptroller and get from
him only 500 in bank notes, we have
not benefited the people any. We have
not increased the money that is in circu
lation in the state, but rather we have
taken from the state just SO much gooG
money, and substituted less money apd
not SO good. Besides we must do some
thing to rehabilitate our lands. 1t was
not until the United States banking act
that hanks were DrOhihited from lendino