The times. [volume] (Richmond, Va.) 1890-1903, 1894-09-22
vtRuIsiA STATE BANKS.

VIRGINIA STATE BANKS.
We find the following letter In the
State
To the editor Of The State.
IL your report Of Major scott remarks
before the bankers convention yeslei
day is correct, in which ne says thdt
Virginia had never had any wildcat
banking system. and that no hote-hoi4ei
had ever lost anything through IT
giria bank OF issue" the Major memory
r. somewhat at fault for the fact Is, after
the suspension of 1891, no w hceilhg DdIlh-
notes were received on deposit ny inc
Richmond banks, the commonwealth OF
Virginia having to make speclai ue-
pOsit OF such notes as were received from
The sheriffs. and those falling into the
hands OF merchants were sold 10 brokers'
at discount OF not less than per CEN
The bank OF Philippi. and several oth-
ers. were never bankable, but were bought
by brokers, at per cent. discount. Again,
the Bank Of Pittsyivania got into Tou~
bic. and its issue was bought up Dy Dr9keIs
and others for fifty cents on the dollar.
After the resumption Of specie pay
ments by our banks. under an amended
State law. the Bank Of the Common
wealth, Of this city. and lsaacs Il Taylor
were made redemption agents for most.
AZ not all the State stock banks. ana were
allowed TO charge one-quarter or ] per
cent on the dollar If gold was demanded:
There are several old bank officers ana
brokers now living who, | think. viii
verify this statement In every particular.
ONE OF THEN.
We have heard these, or similar. allega-
lions TO the Displacement Of the State
bank currency that we had before the
war made before. and we believe
they contain all that can be said against
IT, And what do they amount TO? That
Richmond banks refused to receive the
notes Of the Wheeling banks on deposit
after the financial panic OF 1851; that they
were sold In Richmond at a discount Of
/ per cent: that the notes of the Bank OF
Philippi sold for discount as great as
r per cent, and that the Bank Of Pitt
sylvania substantially failed; that there
was a general suspension of specie pay
ments all over the country. and after
specie payments were resumed. there was
a period during which State bank-notes
generally were at a discount of a quarter
of per cent, as compared with gold.
Now. II Virginia could have n State
bank circulation that spread an
abundance of currency all over the State
and gave each nolghborhood all the money
Il wanted does II not seem probable that
we could well afford to pay for 1t the
trifing inconvenience that the States cor
respondent describes as having arisen after
a condition Of financial panic that COW
cred the whole face of the land? 1t seems
10 ms that the disoders the public had
10 put up with were Of the most infin-
tesimai character. when compared with
the blessing of having an abundance OF
money In every neighborhood. And
these disorders. too. trifing as they were.
were only incident to period of panic.
For years and years before the panic.
and as soon as affairs had adjusted
themselves. after the panic. the notes Of
all our State banks circulated everywhere
in the State at par. and were at dis
count in New York very little. If any, more
than the present rate of exchange be
tween Richmond and New York.
The substance OF the case made by the
States correspondent then is this: Be
fore the war Virginia had an abundance
OF currency, and every nelghborhood had
all that Il could usefuny employ, and il
could always get as much more as II
could find use for. When a period of
financial panic came on. Nirginia's cur
rency suffered slight depression during
that period, which caused nothing more
than inconvenience and vexation for a
Reasonably short period. There is the
country people to be without all money
then. because some Nirginans suffered
the inconvenience that the period OF the
tx7 panic caused? OR shall we not all have
all the money We need. even il We do
have to undergo an occasional period OF
Inconvenience like that? The whole case
Is involved In those two questions. 1t
was with the greatest satisfaction We
learned that the Bankers Convention. held
here a few days back. appointed com
mittee TO draft a bill for system of
State banks. We commend 10 the gentle
men composing the committee the sug-
eestions which we made on the 18th. The
true system is this: State banks should be
allowed TO subscribe 10 the stock OF other
State banks. In that case the Richmond
banks would open branch at Fredercks-
burg. Alexandria. Petersburg. and so on.
by soliciting subscriptions TO the stock OF
a separate corporation at each Of those
places. But the Richmond bank would
subscribe for 81 per cent. OF the stock OF
the bank TO be established al Petersburg
leaving 40 per cent. OF IL 10 be taken by
the citizens of Petersburg. In this way
the Richmond bank would dominate and
control the Petersburg bank. The direc-
tors OF the Petersburg bank would be Pc
tersburg men. who would know the credit
% which any Petersburg borrower was
entitled. and the Richmond bank would
have 10 back all the notes issued by the
Petersburg bank. or lose the great sum
Il had subscribed to the stock OF the
bank. In this way the mother bank would
become endorser for all its branches ana
hs nf hron
fore, be just as sound as note OF the
oarent bank. Provide also in the bill
that the notes OF branch bank should
- Han on all the assets Of the parent