The times. [volume] (Richmond, Va.) 1890-1903, 1898-02-03
MEYERS, Sixth and Broad SITS.

tented with present conditions2 And
| the Virginia case Is the case OF every
other agricultural community In the
| Union.
Before the war the law required the
| Virginia banks 10 make quarterly reports
| TO the Governor OF the State and an IN
| spectlon OF those reports show some very
| interesting facts. For instance, the
Farmers bank OF Virginia had branches
In many parts OF the State and one of
| them was at Backsburg, small village
Of two or three hundred people, IN Mont
gomery county, which Is blue grass.
grazing region OF the country, as Inc as
any I'm the world. This branch had 4
capital OF 10000 and a surplus fund OF
So, Coz that Is IL had $4,000 but II had out
its notes to the amount of NloZi, ana IL
kept I'm It's vaults only S2yo5o OF specie
against those notes. With notes. capital
and surplus, IL hal therefore S256O0O, but
its deposits were only SOP II had out
loans. however. amounting 10 SZZhVW,
which added 10 the coin 1t had on manu-
about balanced It's resources NOW the
trihlng deposit account mas deep end
most Important meaning. IL means that
the farmers around who borrowed tns
bank money did not take their loans IN
the form of credits on which they check-
ed Ii means that they took the bank
notes and put them I'm their pockets ana
carried them to their homes and PAID them
out there to their neighbors, and. as every
mad
whose managers were the leading people
OF the community. nobody ever thought
OF going 10 the bank and demanding re-
demption OF the notes IN COIN, SO tn31
once out they remained out indenhtely
and circulated around amongst the peo-
Dle performing all the functions OF
money lust as well as the purest goa
dollars could. This Is the way In when
Virginia banks were able TO put out nVe
and even eight dollars OF notes Tor one
. in
the reason why they were able 10 issue
on a small capital just as many notes
as the people had any use Tor. Inc re-
suit was that they could SO multiply tnelr
canitai that they could AFFORD TO charge
very low rates OF interest and the people
generally had an abundance or money ana
at the most reasonable rates. rms
Placksburg case land the bank reports
show the whole country TO have nad
Rlacksburg cases) ought TO end all dis-
eussion OF the matter. Ii suggests, too,
another most important thought. me
report OF the Monetary Commission
shows that the members OF the coinnis-
sion accepted the common error 'hat
hank should be forbidden 10 issue notes
In excess Of its capital. That IS a very
prevalent opinion, but It IS founded In
nisconception. The amount or capital
which a bank may have has TO relauoh
OF any sort whatever 10 the huHpeE Vi
notes IN should issue.
LIMIT UNNECESSARY.
There rs no reason that bank should
he limited TO any particular am9unl ol
its capital I'm issuing its notes. lhal has
nothing TO do with what II may or may
not safely put out. lhat question ~ ne
termiped by wholly different consider '-
lions. II Is determined by the activity
OF business in the region about the oank.
The lesson TO be derived from the
Blacksburg case, therefore, Is tnhl lheIe
should be no fixed rule upon the subject
but that each case should be left 10 the
discretion OF the Board Of Directors. In
one locality the directors Will teel tna1
they cannot Issue as much as their c1pl-
tai. In another they VIII Gee they can
issue twice as much, and the ability VIII
produce banks In communities that would
never have them II they were tied down
by an iron rule that forbade more notes
than capital This brings me 20 the con-
sheraton Of another matter OF as great
Importance. The hrst essential or bank
ing system Is that 1t shall supply notes
that win remain In the state OF issue
The second Is that II shall be or such a
character as that banking houses VIII
be established in all parts or the state
so that all OF the people may be known
TO some bank manager Ihe hatiohal
bank system as II exists nov 10 en1'r ,,a
You gentlemen who live In the thickly
populated cities. where there are national
banks every few miles are unable to APP
preIldte WHAT Il Nbbit AiAn NSilotNNA oNA"''
cuts I'm the South and West There are
great districts IN Virginia as large as
some OF the states OF the Union, where
there Is not n single bank and where. con-
sequently. the most prosperous FARMER
Is unable to get any accommodation.
This is not exactly the place 10 say TX.
but I pause here 10 say that the farmers
could not get what they wanted II they
got free silver. X would be national
money good for what II Is worth I'm all
parts of the Union and IL would not stay
with the farmers. IL would go TO the
commercial centres as all the national
money now does All they would bring
about by free silver would be the degra-
dalton OF our standard OF value. a gem
eral bankruptcy and liquidation and re-
sumption OF business after a long time
on basis OF dollars worth perhaps
forty-four cents and always shifting I'm
value. but they would be left without
money as now. because all OF the silver
would 90 to the commercial centres as
tho present money does.
EXISTING PREJUDICE.
am aware that the prejudice against
State hanks OF issue is so great that II
will probably be impossible TO get Con-
gress to permit OF their re-establlshment.
But all that IL essential can be secured
with national banks OF issue only. A law
that authorized national banks everywhere
and that permitted them TO issue as many
notes as their directors may think pru-
dent 70 Issue. without security OF any
kind whatever except the credit and as
sets OF the banks that issue them, but
subject TO whatever inspection Congress