The times. [volume] (Richmond, Va.) 1890-1903, 1894-09-22
yAsrArE BANhs-NHyAK WILDCAI
Major Scott Replies TO the Letter In the
state.
Richmond, Va, Sept q, 1894.


Editor Times. a writer In the state
disputes my statement that there were no
wildcat banks in Virginia before the war
and his evidence Is mat W heellnS Dhhk-
notes were at discount OF PEI cent;
after the financial troubles or 1891, anu
that one. or more. of the smaller country
banks were at discount u per cent
aud the notes OF one bank once soId Tor
~ per cent. DO not recOllect TINS last
occurrence. II true, il was but the re-
suit of temporary ignorant panic. Ter
tined checks on the best banks In New
York sold AT the bank doors there last
wear at 3 per cent discount. Does that
nrove that those banks were insolvent;
The banks I'm Virginia before the war Were
about the best i'm the country The o'd
State banks $50 called because rhe state
held molety OF the stock had q caploi
Of 50 l1INrj. The SO-CaIl~I independent
banks Uhe State not being a stock-hOld-
err had SgOO 90 capital The notes OI
the latter were secured by deposit on
STATE bonds, hence no ianure 81 me
hank could cause a loss to the holder Ot
the bank-uote. but If there were defects
Am the laws Of that time, IS il supposed
that We have learned nothing since IT
the National banking law be the only
safe system our Legislature can ADOPT
10. bat we can have system or banking
with both Federal and state control mat
will give us as safe circulation as we
have now. and 1t far broader ana more
liberal scope. r,
ing act is the most natural suggestion TO
occur TO any experienced banker. ~ con
sidering the defects 81 the present -
TEN. but 10 will save time IN the outset 10
discard an thought Of amending that law,
and for this plain reason, no amendment
Of the existing law can pass Congress.
The element i'm Congress and IN the coun-
try opposed 10 National banks has Deen
for twenty years strong enough 10 deftat
any amendment.
Comptroiers Of the Currency have
from time 10 ime called attention 70 the
defects I'm the law. and suggested OBJ.
Vi0us improvements. but the hosllIltI Oh
what may. perhaps. best be called the
Populist sentiment, has always defeated
them. besides. IL is not necessary 20
adhere 90 the form OF that law. especially
If 10 bee proposed to amend away IT'S SUD-
stance The law IS now merely COZ
lection Of rules for safe banking. II IS
of no consequence whatever except Tor
the provision for circulation. That feature
was designed to supply circulation sum
cicnt for all the wants Of the tahe OF
the country. with capacity for expansion
To meet Increasing population ana eNten-
sion OF territory. II no longer SullH'H
circulation. It's ISSUES have recently been
only fifteen per cent or our paper li""ey
The theory that IL would expand ana con
tract 10 meet the wants OF trade has
proved utterly false. The decreasing
bonded debt Of the United states makes
continuance lUllltNnfIlt ~ . IllAF a.
wen abandon all idea Of establishing u
hank circulation on the lines Of the pres
eBt law. We must have lew law. me
present law may DE left on the statutes
H. die of merited neglect We are not "il-
ling. however. TO give mp the advantages
of Federal control and assistance. We
want uniformity In bank issues over all
the United States We want note so
we'll engraved and on such paper as VIII
give US the amplest protection from conn-
terfeits We can have these and many
other safe provisions 10y simple Federal
law removing tne ten per cent tax on
the circulation Of all such banks charter
cd bv the States as VIII comply WIN
certain general regulations TO be Lana
down in an interstate commerce law.
Regulations for the general conduct OF
bank business may be safely leit To me
various states. The present law requires
national banks 10 conform 20 the laws
OF the states herein they are located.
The important consideration is what
provision shall be made for cir-
culatiOn whereby the most liberal au-
shorty for such issues consistent with
absolute safety and prompt redemption
may be allowed to the banks.
Tner- are four kinds OF security for
notes: First. deposit Of bonds win the
state or Federal Government. second dee
claring them a FIRST lien OH all The bank
assets: third, making The stockholders
liable for an amount equal 90. and 100 adj
dillon TO their stock. fourth providing %
those iuSolVent IL notes bee secured hy
all Of these guarantees and they ought
70 be So secured there can be no human
possibility that they viii not Doe safe In
the hands u the public. and with such
guarantees, there Is no reason why banks
might not DE allowed 20 issue circulation
up TO the full amount OF their actual
naid-up capital The more paper We
have in circulation. the better for trade
provided only IL be always readily re-
deemahle In coin No other paper should
be allowed 10 circulate. What bonds shall
be received on deposit for the security Of
safely be trusted 10 FIX a schedule Of Sc
curites. with the simple provision that
they have a ready market Of 10 per cent.
over the notes issued against them Some
people talk OF State Legislatures ass II
they were ignorant and corrupt utterly
unfit 10 legislate on bankiSg. and our only
safety lay in Congress. | have been he
fore many committees Of the virginia
Legislature. and / never failed 10 get an
intelligent and faithful consideration OF
any question ! presented. Who can say
as much for Congress Some Of the
notes Of the old state banks were AZ a
discount because they were redeemable
only AZ the bank counter. and banks
were established AT remote points ~ es-
cape the frequent demand for redemn-
ton. This can easily be prevented The
present mode Is 10 require every bank in
the country 70 have fund az Washing
ton 10 redeem all notes. This system
takes money from all over the country
from Oregon TO Florida, TO be held idis
at Washington, and, OF course, DESTROYS
all its benefit as local currency. and