Grant County herald. [volume] (Lancaster, Wis.) 1850-1968, 1873-10-16
Country Banks
CFrOm ths philadsIphia North Amsrloan

One OF the sources of trouble il
the late panic was caused by tht
large deposits of country banks anC
bankers both in Philadelphia anc
New York. In the business of any
commercial country the banks in tht
great cities have TO be correspond
ents or agents of the banks and
bankers II the interior. A trades
man or manufactures or miner ia
the country wants to transact bust.
ness with his metropolis through the
country banker or bank, and 10 or
der that this may be done the bank
er must keep deposit at the centre
u draw against, which must OF
cure always be larger than the in-
slant demands. When we consider
that the business of these banks and
bankers in America far exceed that
OF the metropolitans, the Importance
OF the balances referred TO will be
seen. La New York they constitu te
SO large an item 10 the current
banking resources that if they all
suddenly withdraw almost every
banking concern would be deranged.
Yet this is exae ~ what they are all
liable To in panic.
1t the country banking concerns
could Ouly be brought to understand
the danger of such a course they
would refrain from increasing a panic
by the sudden withdrawal of their
deposits, especially as the withdraw.
al takes away so much available
cash and heightens the danger.
During last week the news from
New York and Philadelphia created
panics at many places, and banks
were subjected to run. 1t may be
urged that the withdrawal is neces-
sary to supply currency. This would
imply that the country banks keep
an unnecessary large balance at tho
metropolitan city in order to make
profit by loaning it on call or 10
It interest tor what would else be
a. idle reserve. In a great city the
managers of a fiscal institution all
readily understand that in associa>
tive action there is strength. But
the concerns in the country seldom
do.
IL must be admitted, however,
that with them "a with US the inn
perative question is as to The means
on business. People can
not trade without cash of some kind,
and it seems surprising that with
nearly eight hundred millions of dol
lars Of paper money in circulation it
should suddenly become as scarce
every where as specie once did. We
hear everywhere that banks, bank
ers and brokers had abundance of
but that cash was com
modify that had suddenly disappear.
ed. What the condition Of things
would be if the circulation were re-
duced to its old volume, three hun
dred millions, we cannot imagine.
The actual scarcity has thus been
u npIeasantly brought home to us
all, though whether il results from
boarding, or from the immense area
OF country over which the currency
is di1fused, or the enormous volume
Of general business every where, is
more than we can say. That an
amount Of this currency
gorges the channels of ordinary trait
fc in the great cities seems to be
clear from the insane clamor that
few days stoppage created. The
vast wealth of these cities illustrates
itself in expenditures daily that seem
gigantic.
But if this be the condition of the
cities, what must be the state of the
interior, the volume of whose wealth
and traffic must always be so much
greater2 1t would follow that tie
interior must be at all times ana un-
der all circumstances short of circoa-
ton, aud tina. the money must be
drained from it by the tide ever
flowing to the great cities. The
common inference with fnanciers is
that if We were 10 increase the cur
rency constantly the gorge in the
great cities would incre Sc and leave
the country bare. To obviate this
to some extent the national banking
system has thirteen redeeming
cities instead of only one, and this
wise provision the New Workers
have been strenuously trying to su.
persede by making one only centre
at New York.
1t may be assumed that the vol
ume Of circulation in the United
States at any given point will be
found prOpOrtioned to the active
trade there, since business carries
money along with its current. And
thus when morey is scarce 10 New
York it is because the currents of
trade have set IN powerfully to the
producing districts To pay for wheat,
pork, -four, corn, beef, live stock.
coal, iron, cotton, rice, tobacco or
manufs cures. As rule the farm
ing population is dependent upon it's
local banking concerns for money.
There is doubtless much boarding
but what is used in trade must be
bad of the local bank. 1T we had
specie basis the specie would ali
gravitate to the great ciLies and the
currency would food the interior.
asa Danbury young man who
left on far western expedition, was
bidding his friends good bye at the
depot. when q Young girl cried out.