Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1879-10-16

that they are apt TO get together and agree
in grand and dark conspiracy upon "hid-
den and concerted measures y to rob and
break down their business customers for
their own benefit. And how are they going
to do it? That is very simple. 1t is not by
issuin gmore currency for, as IN. Ewing
tells us, when the currency is increased
values rise;'' and ne tells US also that the
90 wealth of the national banks is dimin-
ished by every rise of prices" But it is by
contracting their currency that the national
bankers are to get enormously rich; for, az
Gen. Ewing teaches US, "when the volume
of the currency diminishes, prices conse.
quently fall" and also that the
wealth of the national banks is Gin
creased by every fall of prices" From
this it appears, then, according to
cen. Ewing, that the national banks
and their stock holders will necessarily
conspire for elimination of the currency,
for thereby they will enormously increase
their wealth. This, with due respect be it
said, is one of the richest gems of nonsense
I have seen for long time. So far 1t has
been one of the leudest Democratic cries
against the national banks that they were
deriving large profits from their circulation
by getting interest on it and also on the
bonds on which the circulation is founded
It would be manifestly for the benefit of the
national banks, therefore, to issue as much
circulation as possible so as to get as much
as possible of that increased interest. But
here Gen. Ewing steps in and says: By no
means! The national banks represent the
holders of public and private Indebtedness
whose wealth is increased by every fall of
prices, and diminished by every
RISE" and inasmuch, as he also
states, a fall of prices, so beneficial
to the national banks, is brought about by
diminution of the currency, the national
banks will increase their wealth, not by
issuing more currency, but by issuing less
or, better still, 10y speedily withdrawing all
their currency which is already out.
wonder whether it has never occurred to
Gen. Ewing, who must have pondered
deeply on this subject, that, if his view of
the national banks be correct their conspir-
acy to increase their wealth by fall of
prices would have best succeeded, and they
would have made the most money, by not
| issuing any currency at all How In the
world did it come to pass that the 1929, 69l,-
! 697 of national bank currency, an increase
| of over 81 10000 since last January, ever
saw the light of day if the bankers would
make money by keeping the currency, and
! thereby prices, as low as possible? What
! ccnsummate fools these national banks
must be
"But," Gen. Ewing may tell us, "there is
deep and dark plot at the bottom of this.
| They only act the fools to put us off our
guard. First they run out the currency to
make us all feel lively, and then, suddenly,
they withdraw it all; and thus they will
catch us when we least expect it, break us
all down and make themselves enormously
rich" That seems to be Gen. Ewing's
meaning when he speaks of the "injury
without limit" which the national banks
may infict upon the people, and of "the
wealth they may themselves accumulate by
| hidden and concerted measures of expan-
sion and contraction of values" All, what
profound and wonderful conception the
! leader of the Ohio Democracy has of the
relation of banks to the business commun-
! ity! Look at it single moment.
THE BUSINESS OF N -ATIoNAL BANKS.
the circulation of bank notes is not the
| only nor the principal business of those
| banks. Their main and regular business
consists, as / have stated, in taking and
holding money on deposit in using such
deposits, together with their own capital in
N aking loans to business men, in discount
| ing notes and bills, in buying and selling
| exchange, and SO on. The more extensive
and safe this kind of business is, the greater
will be the prosperity of the banks; and
! this business will be the more extensive
and safe the more active and prosperous the
| business of the community is with which
the banks deal. A bank stands to the bust
ness community in the relation at the same
time of a debtor and a creditor. It is a
| debtor to its depositor and creditor to those
whose notes and bills it holds. When the
depositors of q bank become embarrassed,
they will withdraw their deposits, and
thereby diminish the funds with which the
| bank operates. When the debtors of a
bank are ruined, they cannot pay their
! debts, and the bank holding their discount
ed papers is one of the first creditors to
suffer loss. It is, therefore, the manifest
| int of hot rs
toners, both debtors and creditors,
be in as solvent and prosperous
condition as possible. AS everybody knows,
in times of prosperous business the banks
make money, and in times of business de-
preston banks are heavy losers, and are apt
TO fall unless conducted on the soundest
principles. During our late business crisis
the average earnings of national banks to
capital and surplus went down from nearly
II per cent to less than AZ per cent The
aggregate losses of the national banks dur
ing the three years ending in 1878 amounted
to $64, 119, Ais. And now comes Gen. Ewing
and tells US that the national banks, over
1000 in number, scattered all over the land,
with a capital furnished by 10000 stock.
holders, majority of whom are persons of
limited means, will be so insane as to think
that they can increase their wealth by ruin
ing the business community, and that they
will conspire to that end! Surely, no man
who has the faintest conception of the nat
ural relation of banks to the business in
terests of the country would for a moment
entertain, much less express, so utterly wild
and preposterous an idea. But such is the
financial craftsmanship of the leader of the
Ohio Democracy.
REAL VIRTUES IGNORED.
1t will not seem surprising, after all, that
this leader should have failed to mention as
the real characteristics of the national bank
ing system: ~ that, as to the regular
services which banks render to the business
community, the national banks, on the
whole, are the best and safest banks we ever
had; and, ~ that the national bank cur
rency is the best and safest bank currency
this &C 7ntry has ever seen.
While, as l stated, it is the natural inter-
est of banks that their customers, creditors
as well as debtors, be in a solvent and pros