The times. [volume] (Richmond, Va.) 1890-1903, 1897-05-18
Scotch Banks and state Banks Of Issue.


May II 1877.
Editor Of The Times. Richmond. Va:
Sir-I am not competent TO give am
opinion on the question OF State Banks
as AGAINST National Banks. but this l
find chat if / have anything to sell / can
get payment Tor It. whether notes have
"a tendency 10 flow towards New York or
other cities. or not. ON ihe other hand
NO matter what amount Of currency may
De- available for circulation. II one mas
nothing To- sell he cannot get single dol
lar honestly II seems that "a note Which
rs legal tender AN over the Union must
he more convenient than one current IN
one State only.
Perhaps some figures regarding banking
facilities I'm Scotland may help TO forming
an opinion as Co the working of a system
of note issue. which is not legal tender at
AN. and is practically confined TO thdt
part OF Great Britain.
There are ten joint stock banks IN
Scotland. ono chartered I'm 1893. all are
now limited liability corporations. share
holders being liable only 10 The extent OF
their holdings They have an authorized
issue of Sl3 $4,000 without security other
than the capital The average circuia-
ton of notes IN 1866 was S3jtss'Vp,
against the difference between the au-
thorized and actual issue they are bound
bv law 10 hold am equal amount I'm gold on
government securities and i'm above year
they held S2S $4,000 I'm this respect. The
number of branch offices scattered an
over the country is l,wo-many in small
villages even. These bank notes are not
legal tender strange TO cay, but such IS
the nature of the system and public con-
fdence entertained. that they pass as
80 AZ fHt
favor in England but as gold sovcrcigns
and BALI sovereicns and Bank Of Erg-
land notes are hcld so largely by Scotch
banks against their note issue. persons
visiting England have no difficulty I'm get
ting currency 10 supply their wants. in
many places Scotch notes are acceptable
quite readily by business men I'm England
specially in the northern counties.
Wfst is to prevent a similar system
working well n Virginia and the Union
generally Given gold dollars or Federal
notes for larger amounts held by state
Banks TO cover their issue OF notes be-
r0nd tho fixed amount in proportion TO
thcir capital available 10 supply the
wants of trades and other travelling be-
vond the state. while State banks could
furnish IN the currency needed FOR local
business. If % per cent. ar the iransic-
t0ns in business is settled without cur
roncy of amy kind. the cry in some quar-
fcrs for increased currency seems uncall-
cl for.
This State must suffer from want or
banking facilities. Scotland owes much
to her banks How many bank offices
are there in Virginia. I cannot tell; hnt
one can travel go or 80 miles in many dl-
rcot'0ns without seeing one
virginia contains over $500 square
miles has over 10000 inhabitants.
Scotland contains $3.50 suare miles
onc-half Of which is devoted TO
Deer Forest and sheep farms. it has
about 100000 Of % population. but it has
900 bank branch offices. open 20 take IN
deposits of any amount. where business
men can get money on bills or on cash
credit, whercwith tO carry ON their busi-
ness. Lender and borrower are both
benefited and the country az large shares
in the prosperity
These cash credits deserve special no.
tce Young men. who by stoadiness
and ability have gained the confidence
of men OF means get two or more TO be-
come security ON a cash credit TO some
limited extent. The borrower pays inter-
est ON money drawn only. but the credit
enables one often 10 secure stock On
trade on advantageous terms, which his
want OF ready money would prevent
while the Scotch bank note is not legal
tender. I believe il is the fact that not
one note holder has ever lost cent on
q Scotch Bank motto within the last so
years. Two banks have failed I'm that
time with enormous liabilities but on
some consideration TO me unknown the
other BANKS took mp their notes mt full
value. The two banks were the Western
and the city Of Glasgow. This is long
enough now even if suitable for your
columns.
/ am, etc,