The times. [volume] (Richmond, Va.) 1890-1903, 1897-01-22
R. A. LkNCASTER'S VIEWS.
His Slatlmsnt on the Banking System
and The United States Treasury
BEFORE HOUSE CURRENCY COMMITTEE
a Thoughtful Discussion Of the iina"o'"i
Question aud the Remedy suggested
The National Bank Act and the
state Bank Currency,

this CITY, before the House committee
ON Banking and sCurronoy in Washing
ton OH Saturday. January 10Th, at 1881
A. H.. ON IA. r.. 40. ILL., entitled: a
hM TO secure to the people the advan-
iaecs accruiug from the issue OF ciIculat-
ing promissory notes boy banks. TO In
crease tho volume OF such notes. and TO
supervise and control banks by officers
OF the United States
Tho Chairman Mr.. Lancaster, who viii
address YOU. is banker and broker Oh
Richmond. Va. and was ln the banking
business nine years before the war.
Mr.. Laucaster-To business man. no
subject seems at this time OF suoh N''"'
Importance ass the financial ana h"''N
ing situation of the country. Inc poo
pic of every section of the country H"Fo
suffered because OF the c."ncctlon De-
,,.,.n tb. banking system and the United
States Treasury and with one accord
business men arc calling for the separa-
ti0n.
rho OWLS growing out Of the connec-
fion are so well understood by YOU That
II is needless to- dwell upon them. 1t
is generally conceded by business men
that the Government should no longer
remain in the banking business, but
should retire thercfrOm by redccming
its demand notes. but as 10 seems not
10 Doc possible TO obtain authority 10 sell
bonds for that purpose. the national-bank
act must bee so amended as TO require
the banks 10 come 10 tho relief of the
Government in time of peace. ass they dld
I'm time of war. The House bill 40. ll,
YOU are now considering provides Tor
that. j am here TO beg your attention
10 the urgent necessity for other amend
rncnfs To- tho natioual-bank drt WINCH
as Won well know. became law during
tho war between the states. OF IN
c.lculahlc injury 10 one section, nj least
the South-has been the prohihitory ID
nor cent tlx ON State-hank currency.
imposed under the act as "a war measure.
The tax answered its purpose well in
forcing thc banks throughout tho country
then under the United States flag 10
adopt tho natonal-bank system in lieu
Of the Stato-hauk system. under which
the country had prospered. This change
was mado IN tho twinkling OF an eye
so TO speak. without due consideration
as 10 how 30 would work in other zee
spccts than in furnishing for the time
being a market for United states bonds,
in order 10 lessen the issue of United
States currency.
THE NATlONAl-IANN ACT.
At the close of the war the national
bank act should have been revised and
amended. But banking under it was
profitable at the North. whore the money
power resided. and ,he inevitable evils
to result i'm time We're not forescen. As
10 the South. the people there had fought
90 the hnish.-to exhaustion. They sur
rendered and went to- farming. manu-
featuring. and merchandising. with such
implements tools. merchandise and cur
rcncy as they could get. They were In
no condition 10 give much thought 20
the national-bauk act, or 10 forcsee how
tho Il per cent. tax on the State bank
notes would deprive the South OF an
abundance OF banking capital, so nCCes-
sary TO general prosperity.
Banking under the national bank act
was 500 profitable at the North that
Northern capital eagerly embraced the
opportunity ut the close of the war TO
establish banks in Scmc of the cities of
the South. where any banking system
was gladly welcomed. since the banks
throughout the South had passed away
with the extinct Confederate Government.
Capital from the North. however. did
not flow 10 the South so abunlantly
as 90 establish banks wherever needed.
because 10 WAS soon known that banking
was far less profitable there than at
the North. whore deposits often aegre-
gated ten TO twenty times the capital of
the bank. while at the South a banks
deposits rarely amounted TO double its
capital And in "a few years the advance
Boa the premium offered for United States
bonds. caused many of the banks To sell
their bonds. and retire their currency
.a..m D.
date the people. The establishment of the
national banks in tie South was checked
too by the risk 90 the stakeholder i'm
being held liable FOR double the amount
Of his stock There was no such profit
in banking at the South. ass at the North
10 Justify any such risk. Nor has there
been such profit i'm banking under the
national bank act as TO multiply banks
and afford the accommodation SO badly
needed in small towns and AGRICULTURAL
districts. The result is such % lack OF
currency I'M farming districts throughout
the South. that trade between the farm
ers ana st9rc-kecpcrs is done by barter.
much 10 the disadvantage of the former.
who lives bon % state of poverty unknown
during the days of slavery. when. under
the old State bank system. with its
mother bank and branch bank. the far
mcr was accommodated with advances
against his maturing crop and his lands
under cultivation were wen drained. and
the country WIS FAR more hcalthful than
now. that much OF tho land is neglected.
and from want of drainage. has become
malarOus.
HARD or THE FARMER
When the city of Richmond had ropu-
lstiou Of not over 10000 tho banking cani-
tai there amounted 10 SlOOo0000 while
now. with "a population Of about 10000
the aggregate capital OF the banks docs
not reach 100000. Consequently th,
merchants and manufacturers cannot de-
pend ON obtaining the accommodation
they may want And the farmers
throughout the State however sober. i'm
dusirious. and clear OF debt they may
fc. cannot expect the smallest accom-
mediation from tho banks but are SUBJ
Set 10 the charges Of their commission
merchants for any advance or money on
their maturing crop
MOI only has the farmer boon thus dis
coufdgcd and agriculture blightcd hv
thc scarcity of money. but the merchants
ana manufacturers. even in the cities
must restrict tnDir business. because of
the uncertainty of being accommodated
hy the banks That have but limited re-
sources, and are subject to sudden con-
traction. because OF disturbing conditions
growing out OF impcrfections in the ma
tional bank system The hard times re-
sulting from thc scarcity OF money have
80 discouraged the people I'm the rural
districts and many OF The cities. that
they have been anxious for many years
Tor any change. and the rDnnrf frfsbffttlIv