The times. [volume] (Richmond, Va.) 1890-1903, 1896-12-27

house associations and the like, may not
be applied TO the issue department OF a
bank which have been applied to all tho
other work ten or twenty fold the mag
nitude OF any possible issue Of notes IL
is almost inconceivable TO assume that
under existing conditions any bank m
any section OF the country could push It's
notes into circulation outside rs own
neighborhood ana II such notes served
the purpose OF a neighb0rhood safely ana
well, why should not each ncishborhoOd
be permitted 10 ENJOY aAd 20 Ltsiu TO uu-
derstand the II ethOds OF bank2
II Is only legal tender money on bad
quality which does mischief Bank notes
are not and never should be legal ten
der. 10 would not be necessary 10 with
draw other types OF currency by POSITIVE
measures but merely TO give ~ pI"".
the opportunity to demand payment OF
government paper or 10 fund 10 IN JUST
the measure that II succeeded iu Supply
ing itself with its own instruments OF
exchange. The national bank notes ufcd
not be called in because other bank notes
are permitted to so out. Ih.' survival or
the best and most suitable would surely
ensue. | therefore again put the question:
suitable adjustment Of our currency 10
present conditions the unconditional re-
peal Of the 10 per cent. tax on State bank
notes2
1 find II difficult If not impossible 10 de-
viscd any method for the issue ~ BANK
notes except a mere extension OF tho ma
tiOnal bank system until this prOhiDitory
tax Is removed. but c0nceving that out
Of the way the problem of protecting the
public from fraud and danger even on
the State bank issues seems 20 me 20 be
a very simple one through the iutcrvon-
ton OF clearing houses. prompt redeup-
ton and perhaps the supervision or a
national Comptroller OF tho Currency
over the securities held by clearing
houses for the redemption OF the notes Is
sued by each bank belonging thereto.
The suggestions which have been made
for extending the national bank system
do not seem 10 me adequate TO meet the
case. except SO far as the proposed autn0fl-
~ 10 be given 10 the larger banks n the
cities where there are heavy deposits may
enable them TO establish branches IN
smaller places where the capital Ia most
needed. IL IS a distribution OF tho WORK
ing capital of the country over WIDER
area which Is now called FOR 10 the pfOhJ
both OF the borrower and or the lender.
The other suggestion 70 authorize ma
tOnal banks with only twenty -uVe thot-
sand dollars G-JuoW, capital, WHlch may
bo entitled 20 issue national bank notes
uD 10 the full value of the bonds Wnlcu
may DO deposited for circulation, may not
work any very beneficial effect tho rela-
tive cost OF conducting such bank Win
It's full corps OF officers ana tho IKE Wosid
DO large. The notes issued would pass di-
rectly into the general volume of the cur
relcy never coming home for redemption
and not serving any bettor purpose DO INC
accommodated of "a neighbOrhoOd than
the existing volume OF currency.
What is the present banking system In
those parts of tho country where regular
banks have not been established There
exists = very extensive system of bor-
rowing and lending Tho Keepers OF the
shops az the four corners grant credits
TO small farmers and hOuseholders on the
most severe terms. compelling the bor-
rOwers 20 deal with them both In the pur-
chase OF their supplies and the sale or
their products inslstl.g as Tar rs posi-
bic on payments OF the loan with re-
newsl under heavy charges FOR tho enc
suing season. The losses are moro than
made up by the very high price charged
FOR the goods which are virtually bartercd
against the growing crops. Nothing could
be more costly. unsuitable and depress-
ing 20 a community than this system Of
banking 10 must be- safe m the long run
10 the lenders else n would not continue
and increase II 40. then IL would De safe
for "a bank agency or a local bank 10 OK
and householdcra. relieving them from
hardship and hy prompt redemption ~
the obligations ~ tho bank coupled with
prompt payments by the borrowers en-
abling that community % prosper m Just
proportion 10 Tho character. standing and
credit. both OF the bank which lends. and
tho farmer vho borrow, These c0ndi
lions. however. car never De established
exceDt on the Fundamental principle that
an creditors are entitled 10 absolutely
equal rights with All debtors and that
there shall Boo no preferences eVomuri0ne
or relief bv legislative action from tho OBJ
ligatiCn OF contracts
EDWARD ATKINSON.