The times. [volume] (Richmond, Va.) 1890-1903, 1898-01-06
STATE BANKS OFISSUE.
Some stupid Arguments Against the sys-
tenn EfectuaIly Disposed or


tenn Efectually Disposed OF
II want no rash experiments. Give me
gold, or national bank or treasury notes.
The speaker was bright young busi-
ness man. and he was discussing State
banks OF issue with several friends.
lie talked huently. and was very posi-
tive and sweeping In his assertions. which
he supported with plausible arguments.
Il don't want = wild cat currency is
sued by irresponsible private concerns. II
would not circulate abroad. People would
have no confidence I'm II. and would keep
hustling 20 get rid OF IL. Nothing would
be stable, and the business world would
be in confusion. with so many panics and
failures caused BY the frequent suspcn.
sion of fraudulent and weak banks 40
SIR. We must have a currency with the
United states government back OF it,
lie was talking TO a group OF average
buciness men, all Of them sensible fell
lows and comparatively well-informed
ana &c was evident tha, he had the major
lty on his side.
One Of the listeners was a quiet man
who had given his attention 10 the dis
cussion without taking part in il.
Major said the young man IN conclu-
sion. "can you answer my arguments"
II don't think / can" was the reply
but 1 can say that your statements are
not sustained by the facts Of our past
experience. Your views are very popular
with many persons who are too young to
remember State banks. aud with others
who find IL 10 their interest 20 oppose
them, but thdy would not stand a practi-
cal test.
"Only yesterday I saw YOU collect a
Nsh NTr Il no M
YOU I'm money. He gave YOU his check
You receipted his account. and on your
way down the street YOU settled with
your butcher. giving him GOidmans
check, and receiving the difference in
cash. The utcher then stepped next door
20 q druggist and paid debt with the
check, and the druggist paid 81 20
wholesale dealer. Do YOU remember"
Certainly" replied the other Driskly,
"Goldmans check is good anywhere. II
may have passed through nifty hands be-
fore IL was presented at the bank"
Exactly" was the majors response
land yet if ten men like Goldman should
organize a State bank you would not be
willing 10 take IT'S notes. though YOU
would gladly accept the private checks
Of It's members?
state bank man. II know Goldman and
his status. and OF course ! feel safe IN
accepting his checks. His credit Is good
and rests on a solid foundation. You
can see his unencumbered property all
over this town"
"Very we'll" rejoired the major II say
it would be a good thing 10 have state
banks composed " just such men whose
credit would De good-whose valuable ana
unencumbered property could bee seen hy
all. ana whose status would be generally
known. Their obligations i'm the shape
OF their bank notes would be a great con-
VenIence here where we frequently SUI
fered from q currency famine. Your
experience with Goidman's creek shows
that it is a public convenience 70 have
good paper that will circulate and pay
debts and If il e. such a good thing with
only one man back OF IL, how much bet
ter it would be IL based upon the credit
Of number Of such men,
Il don't want to run the risk OF wild
cat banks said the business man very
firmly II don't want panics dstrust
and the trouble Of discOunting local notes
when / go TO New York The country
would go TO the dogs under such sys-
tenn"
would it?" asked the major with
grin. well. let me tell you how II work
ga. For eighty years the bills of State
banks were the only paper currency IN
this republic. We had no great amount
Of gold and silver Everything was pa
per
we started this system when we had
only 100000 people living in the woods
on narrow strip Of the Atlantic coast
That State bank paper currency built up
the republic and developed tho country
until our population reached 30.O00.00o
in lS60. With that currency. which YOU
regard as worthless. our people prospered
so that ths poor Of every land hOcked
here TO seek their fortunes.
our few panics we're baby panics com
pared 10 the gigantic commissions which
have occurred since State bank issues
were taxsi OUT OF existence. We had
banks in Georgia and other southern
States whose bills circulated at par in
New York Others not so well known
were subject 10 "A small discount abroad.
In some of the new western States. IN
der the free banking system. there were
wild cat banks, but they could not exist
now.
with our telegraphs. telephones
daily papern and active commercial dgtn-
cies the exact status of d lew bank would
be known everywhere before it opened
its doors and If a Wild cat concern started
It would not be able 10 circulate notes
enough 10 pay for its Office furniture.
but under proper States laws and
government supervision no swlndiing bank
would be able 10 start. and no rotten
bank would be able 10 continue its busl-
ness.
'If the state bank bills should not cir
culate in remote localities. so much the
better. We should then have sound
home currency which would not Gr.ft TO
New York and stay there. Moreover. il
would be an expansive currency. swelling
or contracting its volume according to
the demands of business. the crop move
ments. etc.
when l think Of the good work done
bvf "A State bank currency I'm the first
eighty years OF our couhtry's existence.
and when | see the tremendous panicS