Gold Hill daily news. [volume] (Gold Hill, N.T. [Nev.]) 1863-1882, 1870-07-28
CAPITAL AND BANKING.

In these days Of mining speculations,
dealing in stocks, and all that sort Of
thing, we hardly know Of any enter
prising individual in Gold Hill or Vir-
ginia, or anywhere else, who does not
desire to employ more capital. Every
body thinks if he only had money to
do with he could make money without
half trying. He just knows how the
coin could be invested so as to pay
sbig." The only thing that cramps
him and keeps him from being a mil
lionare is simply the lack of capital.
Even the humblest miner, toiling
away down hundreds Of feet deep In
the bowels Of the earth, Is pregnant
with the consoling belief that If he
only had n small amount Of capital,
even If 1t were not over two or three
thousand dollars, he could make all the
O he wants and never be reduced
to the necessity Of swinging that old
pick again. The proprietor OF tie
peanut stand Is proudly conscious OF
the fact that with the proper amount
of CAPITAL invested. he knows just ex-
actly how The could very soon be-
come n wholesale merchant with a
country residence and carriage. and
be Just as big a bugs as the best OF them.
Even the check guerrilla" ever san
quine and full Of faith in luck. has al
ways the greatest confidence imagin-
able In the power to use capital sue
cessfully, in case he only had 1t.
More capital" in short, Is the gen.
eral desideratum with everybody.
Thus it Is that so many people In the
world, especially business men, mort
gage their property, or use any other
legitimate means at their command, to
raise more capital with which to ope-
rate. 1t Is quite a popular superstition
that banks AN or could supply capital
for all who desire 1t; yet few reflect
that. profitable as banking Is supposed
10 be. bankers want capital as much rs
much as anybody else. The bankers
loan their credits, and use their capital
TO support those credits. By way OF
illustration, we copy the following
from the San Francisco Bulletin:
A hank may DC BlNTICu uLuC dO hathSha hw
for say $4,000 capital. That capital Is all paid
In gold. II Is then all sent to Washington, and
SARCOOO United States bonds purchased with II.
The Comptroller retains the bonds, gives the
banker $lso,OOO Of circulating notes, AND power
% 40 busIness as o banker by lending those
notes. But the banker must keep on hand
SIs.OOO-that Ii, he can only lend $4,000. Now
the notes are all payable on demand In goid.
The moment the bank lends one, II 10 haoie 10
be called upon At any moment TO redeem II iora
dollar. The bank. at the same time, II II can
vet businsss, receives money on deposit, 10 DC
Called for any moment the deposition pleases.
Now, II we suppose the bank has $lUO,OVO &c.
posits, that II may be called upon 10 pay m
sIoht IL may venture to lend $6i,OW. IL VIII
then have, circulation and deposits, $Ats,Ouo TO
lend. Now how IL Ii 10 lend IT, II a dozen
man with the development OF interests the
ory come along and want TO borrow $S.OOO 10
$4,000 each for q year, 70 aeSeiop = anna ~,
be loaned in . day. The bank copld NOT eau "
back in less than a year, but may DO called upon
in an hour to redeem It's notes ana pay up .no
dc Government would be compelled to AXE care
of and the depositors get what they could Out
Of the loans, II the enterprises on whlen tney
were made should turn out TO DC saccessiui:
No hank makes any such loans, however, IL
iosns ia money at short dates, on such prime
s,iis OF exchange, or notes OF hand, a. VIII ma
tnro within sixty days at fnrthest: II an insti-
,ntion such a. we have supposed should Iena us
'SSoe 0nS at the rate OF $500 per day, for sixty
S.Ss IN sixty-days notes, at the end OF the lime
.Sycsid have put all Its money out; but the
srst note would then become due, and amer that
r n wouid receive $500 per day, and have
That AMOUNT 10 put out again. Al the same time,
II any trouble should arise In the market, !. nas
lion m notes or repayment Of deposits; and II
nSther pressed, merely eeasing to loan is money
~ q comes In will restore its funds. This Is the
oensrsi operation upon a smsl scale, but me
priaslple Is the same In the most eS'enoeo
operations.