Daily Ohio statesman. [volume] (Columbus, Ohio) 1855-1870, 1861-06-26
a Government Ranlr.

Ever since that popular phrase "rich as o
bank" first obtained currency, a. class of un-
thinking persons have become impressed with
the belief that q bank has some mysterious
power of producing money; and that such an
institution Ia species of mine, or placer, whose
| capacity can be extended indefinitely, aud may
be well nigh exhaustless Thus, in popula'
paflance, the banks are charged with "mskipt
money scarce,n when the market 10 q littll
stringent; and no one of this class Of critics sp
pears to question, for moment, the ability Of
these institutions to lend any sums which may
be demanded of them, II they were only dis
posed to be accommodating. This proposition
may appear to be little ridiculous when so
plainly stated, and yet a brief examination will
show that 1t takes practical shape in the pop
ular mind, and that many are under its inhu-
ence who ought to know better. Banks are es-
tablished by borrowers "to make money plenty
and place it within their own control; and there
are thousands of persons of more than ordinary
who accept without questioning,
this popular idea of the production of capital,
and never In their whole lives get hint of its
fallacy. -s-,,, . ~ e
: If this false idea of the producing power of
bank were entirely obiterated, and 1t came to
be understood that such an institution could
only control absolutely, as much money as
amounted to It's own paid up capital, and that
any Issue beyond this, must be based upon an
uncertain credit, the power for mischief. which
ill-founded or Ill managed concerns OF this sort
now exert 30 disastrously, would be greatly cur
tailed, and host OF idle theories wouldinstant.
y vanish. Ninety. nine out Of every one hun.
ofed banks that collapse, are started and man.
ageu py those who want TO borrow, instead OF
tnose VINO naVo money to lendi 1t Is the effort Of
tne mccoy 70 Pr0auce' money, or create capital,
snrougn tne macninefy oi bank, and it tails
because tnefe Is no sucn cresung or productive
power III tns insfumcnt used ~ Is Out an in
sfument, ana can generate notning. soms;
vines tne machinery becomes aWractive' and
capital 10 permanently drawn into the concern
money lenders are induced 70 purchase the stock,
or md IL convenient 70 leave their funds in the
6anK on oeposit' ana thus basis tor success is
nneiiy secufedi Dut In eucn cases the substance
follows the shado9, ana success IS possible only
as Tar 90 this reality is obtained borrowers
cannot DO banking business successfully, for
they are on the wrong SIDE OF the fence. Bank.
ing 10 tenalag money, NOS oorToU'ng iti and
starung bank py borrowers 70 produce cap
ital' like starting MOTEL py lot Of travel
ers, 10 get o dinner. ef q .1sL
And yet II is this movement on grand scale
which 70 now gravely proposed to our Severn
ment The Treasury 10 empty, and greatly in
debt, and therefore the Administration must
organize BANK 10 replenlsh IL! II the Severn.
ment we're lender and had surplus funds, 1t
might pc successful in the banking business,
although I'VE think there would be too much
friction for large machine OF this sort TO work
prohtably. Bat Tor Q borrowing government 70
commence banking'is to inaugurate the old ex.
pertinent under circumstances TAR less nopeful