Illinois Staats-Zeitung -- October 10, 1863Eastern Bank Notes Flood the West (Editorial)
It cannot have escaped the notice of the public that for some time the circulation of United States paper money has decreased to an alarming extent, and that a great number of notes issued by private banks, mostly in the East, are in use here. Business men especially find that they have been obliged of late to refer to the "bank note reporter" more frequently, in order to convince themselves of the genuineness of notes issued by banks that are unknown to them, or of the solvency of certain financial institutions. As a rule, these bank notes are issued by some bank that is located in the interior of some Eastern State. No local banker will accept them at their face value in exchange for greenbacks, and even wholesalers often refuse to accept them at par value; thus retailers and consumers are often obliged to dispose of these notes at a loss, and though the loss in itself is small, it is severely felt by the poor, and is actually equivalent to being robbed.2
This robbery should be stopped immediately, and that could be done very easily. The statute books of Illinois contain a law which makes it illegal to issue or accept any bank note of $5 or more that is issued by a bank outside of Illinois, and provides a fine of $50 for each offense. And even notes of a higher denomination issued by banks outside of Illinois cannot be placed in circulation unless the bank that issues them exchanges them for specie-gold or silver. Since there is no such bank in the United States, the statute mentioned covers the issuance and acceptance of notes issued by any bank in the country.
The reason why this law has not been enforced is that we had no national medium of exchange, excepting gold and silver, and we were thus obliged to accept the notes issued in States where we do business. However, this reason is no longer valid now that we have a general medium of exchange, namely, green backs; and there are enough of them in circulation to meet and demands of business. Then too, several national banks, the notes of which are secured by United States notes or bonds, have been established 3So there is now no excuse whatever to circulate these "paper rags" with which the West is flooded.
All things considered, it is now within the power of our citizens to put a stop to this humbug. All they need to do, is to bring suit against bankers and brokers who put such notes into circulation. After a few of these money gougers have been duly punished by the law, the others will cease their nefarious activity. And anyone who refuses or fails to use legal means to protect his pocket book should not complain.
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