The times. [volume] (Richmond, Va.) 1890-1903, 1896-08-19
rurNEw YORK sun On STATE BANKS

tnat paper contains an article discussing
nnanccs signed Matthew Marshall
lncse letters are generally conservative
ana astute from the standpoint OF New
YORK nnancier, bat they often lack
proadth. and fail TO include within their
horizon all OF the conditions that must
he brought before the mind for a trust
worthy judgment 10 lie formed. The
one IN last Mondays issue is striking
Illustration Of this remark.
me writer descants UPON the idea
tnat in making its loans bank must
require securities thau are convertible
Immediately into cash, and he instances
me recent failure of the Murray Hill
BANK. in New York city, which went
down because ii had been lending its
money upon real estate, and could not
therefore. call it IN quickly when an
emergency cane.
The writer is led on from this to argue
that the call from the Senate for re-
neal OF the tax Of 10 per cent upon the,
issues Of state banks is substantially
demand Tor u banking system that VIII
lend money upon real estate as security
and this. he thinks, would be fatal to any
banking system that conducted its BUSH
ness In that way.
Now. IT NAV be readily conceded by the
advocates Of State banks that the banks
IN a great metropolis like New York can
rot lond their oney upon real estate
IN a great commercial centre contracts
must necessarily De performed just as
made, and there must be payment down
upon the nan at the moment payment is
promised. The myTiads Of complicated and
involved transactions, then, could never
move along at all II this were not I'M
derstood 10 be the rule of the case. But
as the commercial centres are departed
from that rule finds relaxation. Even in
so large a place as Baltimore there ia
great indulgence in enforcing the de-
mands OF banks, and when the country
IS reached and the bank has capital OF
only tnlrty or forty thousand dollars
ana an aencultnral clientele the neces-
sites or the case allow an indulgence that
can make readily convertible real estate
a security 10 some extent. The true
theory - 10 commit the whole subject
70 the discretion OF the directors. who
NH learn when money can be safely
lent on real estate and when ii cannot
be. But Matthew Marshall is wholly mis-
taken In thinking that the South wants
state banks in order that farmers may
borrow money by giving deeds Of trust
upon their farms. Iris is not the idea
at all. rev OF the farmers who want
legitimate banl; accommodations are will
ing 10 cucumber their farms with mort
cages ana when a farmer expresses a
Willingness 10 do that the probability is
ne IS not such a borrower as the bank
wants. But a farmer may be a thrifty
man and u desirable customer for bank
IN spite OF the fact that he is a farmer
ana owns land. a man with a good farm.
VINO rises early, works hard, and keeps
MS business up at every point will be as
mindful OF his credit as any broker in
factory a borrower from bank as a broker
VINO puts up government bonds as his
collateral Now. what the South wants
Is an opportunity for her citizens who
are willing TO try the venture. TO open
small banks in all those localities in the
south where there are enough OF these
thrifty farmers TO justify the venture.
mere IS not profit enough in lending the
capital alone to Justify the venture. But
II the banker is allowed to expand his:
capital reasonably by Issuing his notes.
he can DO it with safety and make 4
pront That Will justify the venture. With
this granted to her she will gradually
evolve banking system. That is what
the South wants. and that is what she
reasonably asks for. and. though free sill
yer Will no doubt be stamped out in
November the complaint will come up
again, and # Will continue TO come IN
10 plague the country and cost II untold
nnihons until she IS given freedom
IN banking that will enable her TO make
"'o VI "ct resources now condemned To
absolute iclcness and ineflciency.
Speaking Of the case instanced by Sena-
tor Morgan In one OF the Senate de-
bates, when ladyin Alabama with a fine
estate. was unable TO borrow 5000 Mat
thew Marshall says: lie plainly thought
tnat a wrong was done her because she
was denied the opportunity Of running
IN DEBT"
or course he thought so, and. OF course.
every rght-thinkidg descendant Of an
Angio-SaAon ancestor thinks so. 1t is not
Tor one man 10 say to another when he
snail run IN debt" The principle which
mas made our race the dominating race
OF the earth this day is that glorious free
dom every individual enjoys to do as he
Will. so long as he trespasses upon the
nights or no oth,r person. The whole
progress OF the world turns upon individ-
uals contracting liabilities, and freedom 10
DO It when the individual chooses is alb
soiutely indispensable III active busi-
ness.
we or the South resent the paternal
solicitude that wishes 10 watch over us
and see that we do not hurt ourselves by
MATING ip,uro,ffert boro-,t.. w. s,-t..