The times. [volume] (Richmond, Va.) 1890-1903, 1895-01-23
Mr. Moore's Objection to state Bank Notes

Richmond, Va, Jan. Ii, 1880.
Editor Times,-ln reply 10 your cour-
teous criticism of my Lessons from ia
bel in your issue of January 9Th, 1 beg
10 state that GactS, and not lancieS, nB
ures, and not conJectures, are necessary
in the calculation OF financial matters.
There are certain elementary truths, gen
eral principles, specuIatlons and abstract
theories of the doctrinaires, that are
recognized on all subjects. These Speculd-
tons ana CONGRATULATIONS, IL Is generally
assumed, are sufficiently well known to
all intelligent readers without citing
them. l am perfectly well aware or the
fact that primarily, business consists
not OF purchases for money, but of ex-
changes of commodities" etc, but there
must necessarily be a medlum OF eX-
change. Money performs this function,
and III order TO DO so ii must possess In
trinsic value and be OF such character
as TO commend itself TO the confluence OF
both buyer and seller. Your scheme for
a State bank paper currency is so vague
and indefnate that ii does not present, in
detail, salient points for attack, but
inasmuch as you recommend It's issue
under regulations which each State
may prescribe the assumption Is that
in Virginia the conditions and regula-
tons, prerogatives and privileges, would
be the same as existed before the late
civil war. Personally, l know nothing
about business or its methods prior 10
the late war but l have talked with
some Of the brightest and most intelii-
gent gentlemen OF our city who had large
business interests in this community IN
those days, and the general concensus OF
opinion is that State bank currency is
Objectionable and would not give the
satisfaction and inspire the confidence
that national currency enjoys. What was
the system Of capitalization OF State
banks before the war? 1t was simply
capitalization of credits-nothing more.
n charter was granted by the LessIa-
ture, under the loosest of regulations,
with omnibus PRIVILEGES and 'resula-
A Wi ~ for f.f t.ratf al
stock. This amount was paid up In some
il sta noes one-fourth or one-half IN ''stock
notes" Upon the 100000 OF nominal cap
ital was issued the notes OF the banK,
nomirally redeemable in gold or coin, buJ
really redeemable in nothing, 10 the
amount of three or iive @ one.
The notes OF many local banks in Vir-
ginia and North Carolina would not even
be taken on deposit bys other banks, and
even on such as were taken. there was
always a discount OF from one-half 10 one
per cent. charged. When these banks
suspended specie payments, which was
not of infreQuent occurrence, their rate
was raised TO two per cent and often
higher.
North Carolina. South Carolina and
Tennessee currency, We are told, was al
ways AT a discount OF two per cent.
When State bank currency went north
of Mason and Dixon's line It was a. a
greater discount than nearer nome. rms
lack of uniformity in our currency
created a class OF brokers whose ousl-
ness il was TO buy such notes as were
not current with the banks THESE Wild
cat bank notes were sold AT a large us
count; frequently q merchant when ten
dered a note in payment Tor SOous had
TO send to these brokers TO ascertain It's
commercial value before accepting IL
from his customer. We are told ny one OF
the Oldest merchants, one OF the most IN,
telligent gentlemen OF this city, who had
a branch house in New York city, as
well as house here, that In 1881 every
bank In the country suspended specie
payments. This gentleman says his busi-
ness was about $4,000 year, and he
informs me that he paid out from Au-
gust, 1857, 10 January, 1888. in the way OF
discounts on State bank currency and
exchanges, in order 10 meet his obliga-
tons and to keep from going 10 protest,
the enormous sum OF fourteen thousand
dollars $4,000.
Now. MIR. Editor. do We want a repeti-
ton OF this? The small margin, the close
competition with other business centres
and OF merchant with merchant. upon
which business is now done, would not
admit of this we could stand no such
drain upon our resources. The great and
serious objection 10 State banks is the
of notes. lack of uniformity
in banking laws of the different States,
and the tendency TO encourage wildcat
banking Under the old system when you
received a note its face value was no In
OF its real worth. When you re-
ceive note now. be II issued In Maine or
Texas, you know its face tells It's actual
value. You can take II TO any bank ana