The times. [volume] (Richmond, Va.) 1890-1903, 1895-02-10

TORS put upon the power OF banks TO issue
their notes. This would not be free BANK
ing, but banking under governmental re-
strictIons. The Times believes that the
best security note holders will ever get
for their notes will be IN that Wise coh-
servative and honest administrator VI
banks that perfectly free banking wouid
very soon develop II they were lett as
free 10 do their own business In their own
wav az the hardware or dry goods mer-
chants are.
But Mr.. Jackson has told us one fact
I'm this letter which is of prime ana hrst-
class importance. lie tells us that the
zee 900 90 OF notes uncovered by specie.
which the private banks of Great Britain
issue. arc backed ny paid-up capltal
and unlmpaired reserve amounting TO-
gether to s750.09,0Oo all paid In hard cash.
and that beyond this they have a sub
ecribed capital Of SIS, 10000 more. Yet
he tells us that he has had TO pay dis
count OF one per cent on the notes OF
these banks. which has behind $55'OOWo
about a25,JO0CO, one hundred miles away
from their place Of issue. Now TINS TACT
ought forever 10 end all talk of a local
currency being a bad thing because 1t Is
at a discount away from home. Here are
notes which are necessarily as sound as
notes can possibly be. and yet In the snaI
territory Of Great Britain they are at
discount Of one per cent. one hundred
miles from their place Of issue. Does thdt
discount render them In the slightest de-
gree less valuable to the people near the
banks that issue them? They are source
of immense advantage to those people,
and yet. sound rs they xA they VIII
not circulate In other regiH~ But the
local people should not be deprived OF the
services they get from them on that ac-
count The case makes the argument for
our state banks having perfect freedom 70
nut out their notes irresistible. NlTslhld
hank notes would circulate all over VIZ
ginia. and would give her people all the
facilities for exchange which they so sadly
need now. II they got mo Maryland they
would probably be at discount there II
IS true. but that discount would SEND them
back here at once for redemption, ana
that fact would make our banks keep.
themselves always guarded with enough
gold coin to meet any unexpected de-
mand Of that sort, and would, therefore,
cffcctually curb any disposition they
might otherwise have to initiate their issues
too much.
our article which produced this dis
cussion with Mr.. Jackson had for its
text this theme; That a national currency
will always be subject 10 the most de-
structive panics, because any alarming
fact that excites the mind Of man IN
Maine will, at the same moment, aHcct
the minds % men i'm Texas and California
I'm the same way. We cited the experience
Of England since her currency system
was remodeled. in 1874 and our experience
since the war in conclusive proof Of 1t.
England has had three panics since lSl.
each one of which must have inevitably
broken the Bank Of England If the Cow
eminent had not come to its rescue and
suspended the operation of the law. Her
safeguard. therefore. against the desruc-
ton of the panics which her national cur
rency is inevitably liable to, consists in
the accepted proposition that there is
power in government above the law that
can override the law when it sees fit. We
can tolerate no such proposition in re-
public. Here all men must obey the law.
We are liable then, with one national cur
rencv to all the destruction of EnglenQs
panics, but without any shield to save
ourselves from them. This must be the
case so long as we have a national cur
rency. Our only safeguard is State banks
and local currency. Then, when
panic comes on in Virginia it will be con-
fined to Virginia. and the other States will
know nothing OF it. The losses Of one OF
the panics that our national currency
brings on the country are far greater than
all the losses that could occur from dis
counts on our State bank currency.