Watertown republican. [volume] (Watertown, Wis.) 1860-1906, 1879-08-27
NATIONAL BANKING is PERFECTLY FREE.

u a10nal bank and circulate notes equal In
amount to 80 per cent. of the bonds they
deposit. Thus Gen. Ewing and Gen. Sam
Cary and any number of their Democratic
friends can become national bankers to-.
morrow if they to gether raise a capital of
$50, 900 for that purpose. The national
banking system, far from being monopoly,
is, therefore, essentially a popular system
as popular 8 system as ever existed under
any government.
1t is of the banks uuder this system so
owned aud so constituted Gen. Ewing says
that they are spt to get together and agree
III d grand and dark conspiracy upon child
den and concerted measures 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
issuing m ore currency, for, as Gen. Ewing
tells us, "when the currency is increased,
values rise" and he tells us also that the
wealth of the national banks is dimin-
ished by every rise of prices" But it is 10y
contracting their currency that the national
bankers are to get enormously rich; for, az
eff 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
Gen. Ewing that the national banks
and their stockholders 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
[ have seen for long time. So far it 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.
1t 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, fall of prices, so beneficial
to the national banks, is brought about by a
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 cut. l
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
ISIS uing 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 100000 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
consummate fools these national banks
must be!
"But," Gen. Ewing may tell us, there is
a 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 inhict 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
a 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 NATIONAL BANKS.
The circulation of bank notes is not the
banks. Their main and regular business
consists, as I have stated, in taking and
holding money On deposit, in using such
deposits, together with their own capital, in
m 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
md of fho Il bo
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 debtor and creditor. It is
debtor to its depositor and creditor to those
whose notes and bills it holds. When the
depositors of a bank become embarrassed,
they will withdraw their deposits, and
thereby diminish the funds with which the
bank operates. When the debtors OF
debts, and the bank holding their discount
ed papers is one of the first creditors to
suffer loss. 1t is, therefore, the manifest
interest of bank THAI it's Gus
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 1dl unless COuuuCCoU OH LIE SOuuucSG
principles. During our late business crisis
the average earnings of national banks to
capital and surplus went down from nearly
IL per cent. to less than AZ per cent. The
aggregate losses of the national banks dur
ing the three years ending in 1873 amounted
to $64, 1874 And now comes Gen. Ewing
and tells us that the national banks, over
1900 in number, scattered all over the land,
with capital furnished by 100000 stock.
holders, a majority of whom are persons of
limited means, will be SO insane DIS 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 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.
It will not seem surprising, after all, that
this leader should have failed to mention as
the real characteristics of the national bank
ing system: G) 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, (2) that the national bank cur.
rency is the best and safest bank currency