Marshall County Republican. (Plymouth, Ind.) 1856-1878, 1870-06-30

Perhaps no part OF the complex machin
cry of business society is less understood
by the mass OF people than Banking
Thousands even who make daily use oil
the banks have never thought of their
general bearing on the laws OF trade-ol
the philosophy wh.Ga lea below the sur
face facts. 1t Is not strange, therefore,
that banks should encounter the lealously
and often the active eumity, of the large
class who are naturally suspicious of all
concentrations Of capital and see an infant
monopoly in every new corporation
things, among others:
Through the system Of deposits and
loans they gather up the surplus capital
OF individuals OF community and direct
this otherwise idle wealth inta the chan
nels, business, thus benefiting depositors
borrowers, and the general pubic. in all
business communities nearly every trader
and prod ucer has at times more money
than bis Immediate necessities require.
Were there no banks these temporary bal
ances on haLd would lie idle In the drawer
or each dealer kn own to have such bal
lance world be importuned for short loans,
and forced to turn banker himself at in
finite risk and annoyance. Al it 10, each
man carries his daily or weekly balance
to the near est bank, which keeps it busy
and Us eful by loaning II on short time to
these whose commercial necessities re-
quire it. The bank can do this without
risk because II 10 its business TO keep
posted regarding the solvency OF borrowers
and to avoid danger OF loss by exacting
ample security. On the other hand most
business men, manufacturers, etc, find
il necessary or very desirable at
some time In the year, TO use more
capital than they possess. Banks enable
them to do this, and thus TO carry on q
far larger and more profitable business
than would he ossibie without banking
facilities. To illustrate: A is lumber
dealer, and during the last half of the
year Is flush " OF funds, owing TO bis
having cash sales during the summer, or
building season. He has $4,000 for
which he has no immediate use and so
leves it in bank from August to January.
B is grain dealer, and during the autumn
months when the new crop Is TO be bought
and moved to market he needs $4,000
more than he has at hand. He goes to
the bank and borrows the money that A
deposited. Thus each Is accommodated,
the demand for. the trade In, grain aug
mented, and the general volume OF bust
ness increased. Were bank loans to
business men 10 be discontinued. trade
and manufactures would shrink at least
one half. and producers WON'T go begging
for q market. Tie banks of the United
States now and almost constantly, have
outstanding loans TO the business COM
mrinity Of more than five hundred million
doll ars. This shows bow large part OF
the b usiness Of the country is always
and necessar lily done on capital Dor
rowed Temporarily from banking instItu
tions.
As means effecting monetary ex-
changes d banking system is nearly ne
necessary Id these days a. railroads arc
to the transportation and exchange OF
commodities.
The special bearing Of banks upon the
farming and other productiv interests,
we have already alluded IN. They en-
able manufacturers 70 carry an extended
business through dun season, when, but
for bank loans, they would be forced To
suspend operations temporarily and dis.
charge employees. They help all sorts Of
industries 10 bridge over season Of deprcs
sion, and avoid disasters which would bf
slso disastrous to the whole community
As the prosperity Of agriculturists depend
absolutely on the general business pros
perity, ~ well - vice versa, the farmerl
have vital interest in the question of tha
maintenance Of . sound, permanent and
just system of banking. II We have suct
syssem)slready IL should be perpetuate(
aud defended; Il sye have not, the soouel
Ne establish one the better for all con
ccrned.- Chicago Adeance.