The times. [volume] (Richmond, Va.) 1890-1903, 1897-02-02
State Banks OF Issue.


all. and II l object TO his logical deduc-
lions. it is not in u captious spirit, but
from sincere wish to fully comprehend
them.
10 me his advocacy OF state banks OF
issue. with the brilliancy of his champ
ionship of sound money. recent mem
DRY. appears paradoXicad in the extreme
If our standard of value is 10 be nXed
at the top OF the financial pyramid and
kept there as sine qua non OF honest
government. the advocacy Of deprecated
substitutes smacks strongly of purility
or lunacy. Mr.. Royals liberality and
public spirit are too well established and
100 universally accepted TO admit OF the
suggestion of any personal gam, as
possible explanation for defective logic.
The theory. or rather assumption, that
any substitute for money. Issued Tor
convenience as circulating medium
that is guaranteed by the national gov
eminent and by IL kept on a parity with
gold. refuses TO Iemain in outlying re-
gions because OF this feature OF desira-
bility. appears TO be indefensible. Equal
" indefensible appears to be the assump-
ton that a circulating medium must be at
a discount and Of inferior quality in order
that il may be kept within the local
bounds. where il is most needed.
10 be consistent in th.s respect, II
would be fully as logical 10 argue that
farmers should only possess skeleton
horses. 50 as 10 be able TO keep them, as
the sleek. e-presentable animals would
leave them. because they are desirable.
The soundness and reliability Of our
present currency Is the one attribute.
that i'm his estimation. creates the absO-
Lutte death Of money in the agricultural
districts Permit me TO suggest that an
attribute of this kind never produces TINS
effect
Perhaps the law OF supply and demand
in its memorable workings, may furnish
reasonable answer 10 the inquiry as TO
why this deplorable condition exists
Does IL never occur to Mr.. Royal that
the superior earning power Of money EN-
ployed I'm cities. over that similarly en-
ployed I'm the agricultural districts is
sufficient 10 account for the total absence
of II i'm the latter localities? Why charge
the want of money In sparsely settled
country districts 20 the very virtue that
we have Just fought 50 hard 20 establish.
while there are lying around loose TO
use a strong phrase, any number OF real
reasons that explain the condition.
Mr.. Royal explains that his State banks
ere TO issue notes payable in gold. Does
It not occur to him that the issues
OF State bank redeemable as he pro-
poses. though unknown except for local
fame. and without the protection OF pow
erful friends would be subject 10 raids
from money sharks. whenever the periodi-
cal demands of any business transaction
required gold I'm settlements2
II the United States Treasury with its
powerful capabilities. could not prevent
these raids how would il be possible to
protect against them little country
bank founded more in benevolent insti-
....fI
ciples2 The United States recovered its
supply OF gold by issuing interest-bearins
bonds Mr. ROyalIs state bank would
have no such power and could exercise no
such privilege. and hence must 90 cIt
Of existence or default In the redemption
Of fits notes. But even the bank IS too
obscure TO excite the cupdity q men.
who are i'm business for the purpose "i
making money. The very fact that its
notes are at a discount anywhere. 40
matter how remote from its home. will at
tach TO it a suspicion sufficiently damag-
ing 10 destroy its current qualities. II he
doubts this proposition. let him try TO
make a customer OF a farmer for Gny
article. the value OF which is unknown
to him.
That substitute FOR money must le
at discount and therefore deprecated.
to ensure its remaining among certain
classes OF our people, I'm the opinion or
the writer furnishes one of the strong
est of conceivable arguments in favor OF
the claims OF the free silver advocates.
Their claim-and one OF the strongest
that they urge was that the undesirable
ity. Of coined silver possessing about one
half Of its nominal value. could be relied
ON for this reason 10 remain away from
money centres and circulate among farm
ers wherein does Mr. ROYALS state bank
issue differ from this. except adversely,
by comparison?
am sure that Mr. ROYAL does not
intend to furnish the advocate OF free
coinage Of silver a powerful argument
for his hercsy. from an influential source.
but he does so. when he asserts that a
substitute for money must be at dis
count TO effectively serve the purpose for
which IL is intended. The writer hopes
that Mr. ROYAL will study this subject
i'm all of its bearings and then give the
readers OF The Times the benefit of his
thought and research.
Mr.. Royals reply is as follows:
To the Editor of The Times
have read and will reply 10 the above
letter with pleasure.
The Times recently treated editorially
the FIRST point made by your correspon-
dent, tO-wit-that the advocacy Of the
gold standard and advocacy of State
banks OF issue, whose notes will not cir
culate all over the Union at par is para
do1ical. Your correspondent probably
missed that article. so l will restate here
its leading points, and that viii answer
his whole letter.
do not see how any one who compre-
hends the nature and functions Of money
can advocate iva standards. one Of
which is. in point OF fact. more valuable
than the other. The common sense Of a
child ought TO teach 10 that in such 4
state Of facts as that. the less valuable
one will bee the only one used. and the
more valuable one will D. exported or
boarded as bullion. The world has made
many experiments In that direction, and
| that result has never once failed 10 1Ol-
| low. II, therefore, We had had free coin
age OF silver, with the silver dollar worth
only half as much as the gold dollar. the
silver dollar must have driven all the
| gold dollars out Of circulation. and our
| whole money metal must have become
! silver dollars. worth. in fact, ir they re-
manned or the same value as now. only
| fifty cents each.
| opposed the free coinage Of silver and
| the maintenance Of the single gold stand
| ard because. in my judgment free coin
age would have given us the single stand
| ard OF silver, that would have caused all
| men TO whom debts are due TO lose one
| half OF what is theirs. IT would have In
| troduced inextricable confusion into the
| business OF the country. and would
| | verify believe. have commenced pro-
| cess OF dlsintesrat.on. which would never
, have been avoried until II started a social
| revolution.
Now your correspondent must see that
| am one Of the most Incorporating adj
Il 4
| yield an iota Of my convictions upon that