THE FUTURE OF NATIONAL BANKING. 499 



even then, and in that region, there were notable exceptions. Bank offi- 

 cials will remember how a stray note of the ugly issues of the State 

 Bank of Indiana, or the Wisconsin Marine and Fire Insurance Com- 

 pany, coming in with a pile of gaudy wild-cats, used to " shine out like 

 a good deed in a naughty world," and was promptly sorted out and laid 

 away as a part of the reserve. Those banks, with a few others, hav- 

 ing relatively very large issues, were conducted safely through the 

 vicissitudes of those days, promptly redeeming their notes on the ad- 

 vent of the national system without the loss of a dollar to the holders. 

 But the honestly and prudently conducted banks of that period were 

 not numerous nor strong enough to redeem the vices nor avert the 

 evils of paper-money banking as it was then carried on. The story 

 of recklessness, fraud, and suffering does not need to be retold, and 

 no one would be willing to see the way opened for a repetition of its 

 experiences. 



The conditions now are very different. The operation of the na- 

 tional banking system for twenty years has brought to its management 

 a class of trained and educated bankers, who are, for the most part, 

 fit custodians of the people's money, and to whom might be intrusted 

 the work of furnishing paper money for the country with greater 

 economy and less risk of loss than would attend the adoption of any 

 other system. The machinery is at hand, is in excellent working or- 

 der, and would need but slight modifications to fit it to perform its 

 work after the obligation to deposit Government bonds against note- 

 issues had been canceled. There are now over twenty-six hundred 

 national banks in operation. They have been organized and located, 

 not with reference to issuing currency, but to supply the legitimate 

 needs of the business community. To guard against the formation of 

 banks for purposes of circulation only, the right to issue might for the 

 present be confined to those now in existence, with a permanent pro- 

 vision that such right should be extended to new banks only after 

 three or five years of successful operation : no permits to be granted 

 except under the conditions now imposed as to location, ratio of capi- 

 tal to population, and of circulation to paid-up capital. A Govern- 

 ment bureau should continue its supervision, and should engrave, 

 print, and furnish the note impressions as a precaution against the 

 possibility of over-issues ; this and any other labor or expense imposed 

 upon the bureau to be paid for by a continuance of the tax on cur- 

 rency. Existing regulations as to reports, examinations, and control 

 in cases of bankruptcy should be maintained, and it might be well to 

 give preference to the claims of note-holders. Notes should, of course, 

 be redeemed in coin or legal tenders on demand, with provision for 

 central redemption. At present there is, practically, no redemption 

 except of mutilated notes. Under the system suggested redemption 

 would be real, and the amount of note circulation be, as it should be, 

 regulated by trade requirements, with no danger of a sudden and un- 



