The Louisiana populist. [volume] (Natchitoches, Natchitoches Parish, La.) 1894-1898, 1895-08-23
MUCH ABOUT BANKS.
FOR WHOSE BENEFIT THEY ARE
ORGANIZED.
National Bank Notes Lack the Funda-
mental Requirements of an Ideal,
Honest Circulating Medium-Law
Alone Makes Money.

In 1000 congress passed an act
called "An act providing for the es-
tablishment of national banks" Up
to that time there had been so-called
state banks, which obtained their
charters from the several states.
These were banks of deposit as we'll
as banks of issue. By banks of issue
is meant they had the right to issue
circulation notes.
These notes were attractively
printed, but were not money, as they
were not legal tender for debts.
But the circulation of these banks
lacked the fundamental requirement
of an ideab honest circulating me-
dium, as they were not legal tenders.
Whatever the law declares to be full
legal tender, is sound money, or
honest money, or ideal money, using
the several terms thus named. What
ever is in part legal tender, or legal
tender only in certain amounts, or
that calls for redemption in some
one or the other commodity, is not
honest money. but something not per-
feet and complete.
The bills OF state-banks were taken
generally at their face value while the
banks which issued them were SOL
vent, that is, able to redeem their
bills or notes with legal tender money,
but when bank failed, its bills be-
came worthless. AS bank failures
were not infrequent and it was impos-
sible for merchant to keep himself
informed on the condition of all banks,
far and near, there was a scale ofdis-
count on all bills. III one were going
to visit far from home, he must, before
starting, purchase at premium,
bills on the bank in the place where
his visit was to be made. Unless he
did this he would have to submit to a
heavy discount on his home bills
while away from home. In either
case there was shrinkage in values
which rendered the system very
unsatisfactory one, as is every system
based upon the ability of one man to
speculate upon the wants of another.
Trading in notes. be they issued by a
person or a corporation, is specula-
tive, and the aim of every speculator
is personal profit, rather than general
prosperity.
The national bank authorized by
the act of 1868 was to be a bank of
deposit, also a bank of issue. 1t was
to have a charter from the nation,
hence the name National" the bet
ter to lull suspicion of the public and
open the way for its notes to pass on
the current of commerce in lieu of
money. In order to give a circuia-
tion that should be free from the uu-
desirable qualities of the past, this
act required that, in order to issue
circulating notes, bank must deposit
with the United States treasurer, at
Washington, United States bonds be-
tween two fixed amounts, dependent
on the capital of the banks. Against
these there would be issued circulat-
ing notes to the amount of 80 per
cent of the face value of the bonds.
The engraving of the plates for these
notes is done at the bureau of en-
craving and printing, the work being
done by artists who are favorites of
whatever political administration is
In power. The bills are printed on
special paper that can be obtained
only by the government. After their
they are sent to the banks
OF issue, where they receive the sig
natures OF the president and the
cashiers. They are then ready for use.
Being secured by the bond deposit, a
bank bill may pass on an equality
with legal tender but it is not money,
as it is not legal tender and cannot
stop forced sale of property by it's
being rendered throughout the United
States. The bank of issue may have
failcd and discontinued its business, but
its bills are still as good as ever, and
are redeemed at par, within a stated |
limit of time, in anything the govern
ment offers and the law has made |
a legal tender. Thus the government |
bonds left as security are taken by |
the government in exchange for the>
legal tender its gives out in return
for the notes of a national bank that |
goes out of business.
Savings banks, cooperative banks,
and trust companies are banking in
5titutions chartered by the state and
accordingly they may be considered
as state banks. These banks still |
have the right to issue unsecured cir
notes, as in the days previous
to 1868, but the government at Wash
ington levies an annual tax OF 10 per
cent on all such circulation, and thus
by its act of centralized power. in
flicts direct.tax that is unconstitu-
tional and by this means helps to
build a monopoly for the greater en-
richment of those whose interests in
vites them to the support OF any and
all administrations that support q
note-issning system rather than
government issue or legal tender
money system that would give to the
people money rather than notes.
Since bank is corporation. its
prime object is not to facilitate busi- |