The times. [volume] (Richmond, Va.) 1890-1903, 1894-11-15

lie 81, and there would seem TO be no
sort OF difference between +. and our
selves upon that point. +. says: Il agree
with you that under the reserved rights
OF the States they are fully empowered
TO establish bar ks Of issue-that is. prom
Uses or notes 10 be paid in coin-but, In
my judgment, II does not follow that the
exercise of that right is Democratic or
that the ron-exercise OF IT is undemo-
cratic" There is nothing. then, between
+. and ourselves TO discuss. lie agrees
that Congress has no right 10 impose
this tax. Let Congress repeal IT, men
and the time will then have arrived ioi
+, and ourselves 10 discuss the queS"o'
OF policy involved In chartering paHhS
OF issue As, however, we rear we ar
some time away from the repeal we VI"
avail ourselves Of the opportunity '''
discussion Of the question OF pohcy IN
volved in the proposition to chaI 'ei 'u0N
banks which F.'s letter OFFERS
We question whether +. sa" any ol 'ne
disastrous workings Of the "Ha cav
hanks OF which he makes 80 much' lHo9e
banks were possessions Of the ne" west
ern States that were growing up IN 'he
first nifty years of the century All luat
tarritorv one hundred years ago, was
wilderness. which filed UP and blossomed
out I'm thirty or forty years In the most
astounding manner ever witnessed by
the world Its entire face during that
period was boom territory. 1t slept Oh
.booms." 1t walked on Blooms II ate
"booms," IL drank blooms" and there
was nothing there but "booms.' Boon
money was as naturally to be expected
as boon" towns That was the day ara
the locality Of wild cat banks. But
there were no wild cat" state banks IN
the old. long-settled colonial Atlantic
States. Special conditions in no way con-
nected with State banks as an institution
produced three or four financial panlcs
between 1890 and 1850, that caused a num-
Der of them TO suspend in the Atlantic
States, but they were such conditions as
caused national banks TO suspend last
year, ard as had no sort Of relation 10
the character of the banks that suspend
ed. We repeat, then. that the wild cat
banks were the natural product Of the
new and western States; that they had
no existence in the old Atlantic States
and that in all our existence until ISoV
these State banks furnished the OLD
colonial States the best paper currency
that any people ever had; under which
there were no great fortunes built up
but all the people prospered, and content
was spread over the whole face Of the
land. Stick a pin at that point, and
never forget it is there.
What +. saw in the workings OF State
banks that was and is so Objectionable
tash 81
it was necessary to pay in Richmond for
instance. on q North Carolina or Georgia
or other note. and that is the popular
argument against them. SO far as that
objection to an issue of State bank notes
is concerned, we submit the question
Which is better, to be in condition where
you have no currency at all. or to be in
one where you have an abundance OF IL
for all purposes, although you may have
to pay small discount if you allow the
notes of unknown banks to be palmed
off on you, which you are not bound to
take? The object lesson furnished by
the Richmond Locomotive and Machine
Works during the late panic ought TO
end all controversy over that question
forever. The panic found it employing
one thousand hands on immense con-
tracts that required years work to
complete them. The banks shut right
down on them, and they were absolutely
unable to get the money necessary to
carry on their contracts. They were pre-
scented with the alternative Of throwing
up their contracts at immense loss and
turning away their one thousand hands,
which meant at least four thou
sand mouths without bread, or
finding substitute for bank
accommodations. They made the
substitutes. They issued their certif-
Gates, bearing six per cent. interest and
payable at one end of sixty days. Their
workmen took them in payment Of their
wages. They We're at a small discount at
the stores at first, ii is true but they
enabled the Locomotive Works to com
plete its contracts and they supported
that one thousand workmen and their
families for many months, and without
regard TO what part Of them the Locomo-
tive Works actually paid in money, it
would have been perfectly feasible for
them to pay them all off without the
use Of a dollar in money. When they
finished an engine and delivered it, the
railroad company for which il was made
delivered them we will suppose, its check
in payment They deposited that check
In their Richmond bank. and We're given
a credit on its books for the amount of
it. The certificates were made payable,
we will suppose, at that bank. They were
brought there and charged up against the
Locomotive Works credit, and put TO
the credit of the party bringing them,
and thus the whole immense transaction
could have been put through without the
use of a dollar of money.
But the discounts that prevailed before
the war would be very far from prevail
ing now The methods Of quick trans
portation and communication have in
creased a thousandfold since 1860. If
North Carolina note found its way TO
Richmond it would be received by Rich
mond banks on the credit Of the de-
pOsitor and the next train that went out
of Richmond would carry it to North
Carolina for redemption In gold. Our
banks receive thousands of checks all the
time from our merchants drawn by
North Carolinians. South Carolinians and
Georgians on their local banks, and charge
the merchants nothing but a small per
centage for collection. Why should they
not do the same thing with North Caro-
lima bank notes brought to them by our
merchants?
The thing would work thus: The old
banks now existing would not receive
on deposit any notes but those Of the
present old banks, or OF new banks Of
which they knew all about their organiza-
ton. Consequently, merchants and others
would not take the notes of the banks
tbo4 their own hanks would not take