The times. [volume] (Richmond, Va.) 1890-1903, 1897-10-19
ENCOURAGING, TO SAY THE LEAST,

| upon the currency conditions Of the South,
which shows that a correct appreciation
Of our necessities is beginning TO lake
hold OF tie Northern mind. We say rs
| beginning" and that states the case cor
rectly, for the people up there have not
| yet learned the case in its entirety as
| the Journal Of Commences article shows.
For instance, it commences by referring
to the recent failure Of a State bank at
| Asheville, n. c., which was loaded up
with country real estate upon which ii
had loaned money, and it then says If
there is one feature Of the national bJnk-
ing act more than another which excites
disapDroval in the South, It is the pro
! hibition of loans on real estate But
| thoughtful men IN the South are no more
| disposed in their MANAGEMENT Of banks
| 10 lend OUT their money upon mortgages
OF real estate than the same men IN the
| North are. The law should permit them 10
do it IL they wish to DO #, but If the law
| permitted it there would be very little
lending Of money by banks upon real es-
tate security in the South.
An industrious and progressive farmer,
who pays his notes at maturity out of the
| proceeds of his operations, is just as good
a customer for a bank as merchant.
But his acceptability as a borrower comes,
not from the value, per acre Of his land
under the hammer, but from mis- energy
| and thrift in making 1t yield an income.
! Farmers Of this sort are just as good cns-
toners as banks can have, and they ought
10 be afforded opportunities TO secure
loans when their business calls for them.
The Journal Of Commerce continues It's
! discussion of the case thus:
But the prudent Southern farmer needs
credit, and finds IL difhcult 10 get II on
| account of the lack of banking facilities.
! The cooperative banking associations vi
, Europe have been suggested, Dut without
Fl, result. There is now a disposition To re-
, ldrd small banks as the remedy. A
valuable contribution TO the discussion of
this subject is afforded by the conclusions
| OF a Southern man Of some means ana
| experience in banking, who made trip
| through several Southern States looking
| for q town where he could G ablsh a
small bank with a reasonable prospect OF
| profit His observations satisfied him
! that the small bank would not pay. When
| the crops were being marketed the farm
ers around the town where such a bank
might be established would have plenty
of money TO deposit and no occasion TO
| borrow In the spring of the year the
| farmers with one accord would desire 90
| borrow, but there would be nothing 10
| lend, beca they had already drawn out
! their deposits. Deposits would be album
/ dant when there were 10 borrowers, and
/ the demand for loans would be good when
there was nothing but the bank capital
to loan. lie concluded that practically
| there was no profit TO be made except the
profit on the banks capital. and a capital
of $4,000 not in demand during the
whole of the year, would not afford
| enough profit 10 meet the expenses Of the
! business and give the banker satisiac-
! tory income.
The branch Of a bank OF issue. how
ever. could make money under these con-
! ditions, and he was satisfied by his study
of the problem, with every motive for
reaching a sound conclusion. that the one
! solution for the financial difficulties of
the South was branch banking. The
! branches could circulate the notes NJ The
| parent bank and II the ISSUES could be
] made on general assets the capital Df TIE
! bank would be loaned to the farmers ana
! Merchants Of the locality instead e 30
! ne Government an advantage difficult
/ TO Oyer-estimate The branch WOpi not
| be dependent upon the local depositors,
or a capital proportional 10 its local busi-
| ness. for the means OF making i0lns the
parent bank receiving deposits -hfoufh
| It's branches from many localities, woulI
| be able instantly and at almost no ca
| pense to transfer funds from Zoe ld'ies
/ where there were large deposits and
| therefore small demand for loans 10 To-
caites where the conditions were re-
versed Advantageous as the branch bank
! system would probably prove TO CONNER
| cial men, It would be vastly more so 20
! farmers; merchants are depositlng and
| borrowing all the time; there are every
! day deposits from one dealer which can
be loaned TO another. But the farmers
! who have a great deal Of money TO de-
post at one season, and occasion 10 Dor
row n great deal at another. would be-
vastly aided by such an equalization or
the demand for loans and the means Of
| gratifying them as would be afforded By
central, banks with widD pread branches.
II is these remarks that Justify our
opening statement that northern men
are beginning to learn something OF our
| true condition.
There is great deal OF good sound
sense in what the Journal Of Commerce
says. But we see no reason why II
should stick at branch banks The
banks ought undoubtedly to have liberty
to establish as many branches as they
choose to establish, and possibly their
branches would answer every require
ment. But possibly they would not.
Some localities might have means for
starting their own banks and they might
want to do so. Why deny them the
opportunity II they wish to do Il?
Make banking as free as any other
| business and then the people Will be
contented. There is no more reason for
putting legal restrictions upon banking
than upon sales Of cloth or -four.
The Journal OF Commerce concludes its
article thus:
"The political significance OF this Is
| that the South has no interest In silver
| coinage as such, but took up the free
coinage issue under the impression that
| il would afford more currency, for which
the section had an undoubted need; a
banking system that would AFFORD moro
currency. and especially more and cheap