Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1897-01-22


u was issued. That is TO say. the banks
IN another state did not receive IL on de-
post, ana there was an advantage I'm that
a Dank-note that will pass unquestioned
in any section OF our vast country Is a
great convenience TO those who travel
from State TO State but the fact that II
is so received everywhere, by individuals
ana banks. becomes an Objectionable fea-
lure when at slight expense the notes are
shipped TO points where some extraordi-
nary demand attracts them, leaving com
munites from which they are taken 20
rCncy.
Experience under the old State bank
system leads me to think that a return tc
that system would be better for the whole
country than TO retain the present ma
tional bank system. But IL Is useless "a
strive for that which IL is not possible "a
obtain. There is prejudice against state
bank currency, because OF the groundless
fear OF wildcat" banks and II we ever
have banks OF issue again under State
rather than national, law, it must be al
ter further trial Of a national bank sys-
TEN. We can only hope now for changes
I'm the present system.
have read with great interest the
House Of Representatives Bill III, and
think the provisions for relieving the
United states Treasury from the eur.
rent redemption" OF outstanding demand
notes viii accomplish its purpose. The
amendment proposed naming conditions
upon which state banks may be exemp,
from the 10 per cent. tax. would, j think,
prove acceptable to State banks. and SO
increase their profit as TO multiply them
in the South, and meet to a very cons
siderable extent, the demand for banking
capital.
THE REMEDY SUGGESTED.
In conclusion. would call the attention
Of the committee to the following sug-
Gestlons:
]. Release the holders Of national-bank
stock from liability beyond the loss Of
their stock. The stakeholder can only
participate in the election of officers TO
manage the bank. lie is powerless there
after, and should not be held TO so severe
an account as the law now exacts. The
capitalist hestates to take such a risk
and only takes it when the banks profit
is or promises TO be, very large, and
that occurs only In densely-popuated
communities or where the people are
taxed by a very high rate of interest
as is the case now at the South. If that
liability could be removed one Of the
impediments to the establishment Of
banks I'm the South by northern capital
lists would be out of the way.
2. Exempt bank stock I'm the hands of
individuals from State taxes. The tax
on national-bank stock is now pretty
generally paid by the banks. TO relieve
the Individual stakeholder; but the divi-
dend to the individual holder is lessened
70 that extent. Everything that can
should be done. in order 10 promote the
establishment of banks wherever needed
3 Prohibit the payment of interest by
a national bank in any State on money
other State. The New York banks allow
interest on deposits by country banks
though the money is subject to check
without notice. This the New York banks
can do. because Of the custom OF loan
ing money on call in New York This
payment of interest to country banks
should not be allowed, for it diverts
money from home channels to swell the
funds available i'm New York for specula-
ton i'm Wall street.
In considering the provisions Of new
banking act, or amendments TO the pres
cnt act, i would urge the committee to
bear in mind the Importance of placing
as few restrictions as possible upon the
investment Of capital I'm banking. The
greater inducement offered in the way OF
currency issue, and the exemption from
taxation, the lower the rate Of interest
can be made. and the greater prosperity
assured TO the people
The most striking proof Of the want of
banking capital in the South since the
war is found in the rate of interest
saw from Z to y per cent.-preVaiiing
now. and that has continuously prevailed
since the close OF the war. y reduction
in the rate Of interest would be great
boon TO the agricultural SCUM. TOR. aIter
all, money is the greatest fertilizer.
BANKS PAYING EACH OTHER IN
TEREST.
Mr. Cox: Regarding your third sug-
gestion. 7 would like 20 call your atten-
ton TO the fact that one Of the circuit
courts has denied the legality Of a bank
to allow interest on the deposits of an
other
Mr.. Lancaster: Ny point is that bank
in one State should not be allowed TO
take interest from a bank in another
State
Mr.. Fowler: Is not your discrimination
i'm regard 10 country banks an Illogical
one. when you consider the close proX-
unity Of the States 10 eacn otherI rake
nv own State Of New Jersey for eX-
ample; all of our business is done in
New York city.
Mr.. Lancaster: Well. 1 am supposing
that the national banks of your state
would answer the purposes or all or
your people. and that.
Mr.. Fowler dnterrupting): But. don't
YOU see il is entirely inconsistent with
natural conditions and natural law?
Mr. Lancaster: l think it is just the
other way.
Mr. Fowler: I do not see II.
Mr.. Lancaster: Mr. Chairman, insist
that everything should be done TO make
banking profitable in the south, so thaI
capitalists would make haste ana senl
their money South TO be invested. /
believe we can get along with the BILL
If the amendment Is adopted, which
MIR. Walker: What you mean Is the
amendment at the foot Of the bill in re-
gard to State banksE
NIr. Lancaster: Yes, sir.
Mr.. Cox: That was the amendment 10
the Carlisle bill.
Mr.. Iaster: Yes: so that the bank may
issue its own notes, ana Wnen issued lh@'
they may be as good as gold.
CIRCULATION OF THE BANKS.
Mr. Cox: You made statement there a.
10 the amount of money in clrculaton ). y,
nroportion to the votes cast IN the lla'
election. Now. what I want 10 draw your
mind 20 Is this: Is that Daseu uBon '"'
circulation of the national banksF
Mr. Lancaster: Yes. sir; there Is III
Mr COY. You stated another fact about
the population Of Richmond anu tne oa ,,o,
mo canital there The population YOU
~ liz 100 coo while the banking capita
does not reach So 100000. Now, now q.
Won get your calculation made up apou'
the circulationY r,.,.o,, states
smoke of circulation, reported from the
comptroller's office. ! referred 10 Danhins
cortiaI i'm Richmond. We have NOR
state hanks than national banks in hlch
mond. ,... +. q ,,o,,r idea
,bat In order TO enable money 10 clISu,
late in your state it is Indispensable ~ M,
~ ebonid be at a discount In The othe'
States? 49,, IL. ctate-banp
nancy should be as good as any money
but being unknown in other states, wou1.
not be received by banks there, Jus. a. a.
I 10 states money Is not received II
foreign countries. 49, ~. ,,o,. tbinp
Mr. johnson, OF Indiana: DO YOU rnlnS
st,sfern can be devised for reasonaol'
rates Of INTEREST," - 70 handing be
VI ,roatabIe by exemption from taxa
t,on and bv authority TO issue currency
~ H. cav anount OF the capital and surplus
Of the bank. DO not believe mat pam mn.
Ing upon bonds Is lefit rememb be- All United
i lint "a ho,oSs went down Grightfully, ane
S ,,otes secured thereby were far from De
ii'f'F Oold