The Somerset reporter., 1897-06-10
The National Banks

he managers Of the five national tanks
decided ,ast week to wind up their affairs
and retire rom business Two Of the
ms htutlons end In bankruptcy. two are
10 be consolidated with Others thar vi
take Their assets and assume their tahiti
TIES. and one which IS solvent. VII -
closed out rs is own Office. OF the I'VE
all but one appears to have been honestly
man geo = competent men and ,heg
are 70 he taken from the list simply be-
cause the business cannot be made to pay
IN the localities "a which they are located
under the circumstances that exist there
no." such happenings are calculated to
correct the widespread impression that
national banks ENJOY such PRIVILEGES thar
they cannot fail 70 MAKE money when con-
holled b. competent men, and TO mifi-
gate good deal the prejudice against
them which has prevailed 70 some eytent
In all sections and has been yeff strong n
the West and South The idea has been
thai The general government has furnished
these tanks with all the moreF they
couiQ Use tree Of charge and that all they
needed to DO was to lend il and distribute
me Prchts among Their officers and stock
holders and again that Only the favored
few could secure the privilege OF ofpaniz-
ing and conducting one OF these .Dstitu-
tons. The TACT IS that any number Of
men who had S5o.o 900 to invest in such
a venture could start a national bank ~
complying with the regulations. which
applied 10 all alike. Having started Il
they were obliged before they could get
ar bills or bank notes 70 90 business
with TO buy and deposit n the treasury
department at Washington government
bonds as security that the bill issued 70
them would be redeemed. OF me amount
OF bonds SO bought and distributed they
received 90 Per cent in bills Theg were
also required o keep on hand in god or
green-backs for redemption purposes a
large percentage of Their capital They
got interest on the bonds they owned
ard loaned what part Of the currency
thet were allowed to and could find
borrowers, When bonds paid 8 or per
cent and rates 10 individual borrowers
were even higher they MADE money.
Now that the bonds bet litle more ,han
per cent and commercial paper : or the
proceeds from the bonds scarcely balance
| the loss upon the currency that IS idle.
ana tie expense OF doing the business,
and whatever advantages there was IN
having currency furnished BY the govern
ment, has vanished.
No national bank makes ANYTHING now
upon It's bank note circulation and no
national bank can I've which depends
upon what It receives from the govern
ment. The profit if there is any nova
days comes from having the use without
interest OF the deposits made by in
dlHlduais and corporations, which in the
centers OF business aggregate large
amounts. On the other hand the curren.
| cy furnished by the govern ment and
issued by these banks is absolutely safe
under all circumstances. No one needs
to look over his money this morning 70
see whether he has five or ten dollar bills
issued by the Nebraska or the Indiana
banks that failed, on the New York or
Missouri banks that went out of business
| last week, for such bills are lust as good
now as they ever were: just as good
IN New Hampshire as they are anywhere
else; Just as good as gold in every
corner OF the United States, because
there are on deposit at Washington gov
eminent bonds with which TO redeem
them. The trouble with the national
bank system so far as the great mass of
people who are not bankers are concern
ed Is in the fact that il offers no Induce
ment to capitalists to establish and conduct
banks eXcep; in the money centers where
large deposits can be secured. It furn-
ishes excellent banking facilities in such
centers and It provides currency that is
perfect. but il leaves the sparselv settled
communities, like those in the agricultu-
raj sections OF the West and South. with
out banks IN which people can borrow
money ard make their eAhanges -.a1-
| Jo1 and I9uff.