The Louisiana Democrat. [volume] (Alexandria, La.) 1845-1918, 1882-11-01
WHY MONEY IS SCARCE.

~
money in New Orleans apply with
equal force, says the Shreveport
Times, to our little city. The trouble
has always been that so few persons
bring large capital here with which to
try on business. The usual prac-
tice is to start on comparatively moth
ing and ''build up" or ego down" as
the case may be-
1t is quite Cannon to hear at per-
iods of the year when there is strong
pressure for money various theories
expnunded az to the causes of the
stringent money market in New Or
leans. We call it "striagent" as
technical expression, but that does not
by any means express it. 1t is scram-
bic, hard fight ior means with which
to conduct business that is pressing
for ali offer.
The Bank Presidents, Of course, come
n at such times for q very large share
0 abuse, and there are charges that q
few prominent men get all the favors
while the smaller depositors can get
nothing whatever. And again it is
said we arc not supplied with sufficient
banking capital, and schemes are Of
tered from time to time to increase the
banking capital.
The truth is there is a wocful lack of
commercial capital. The merchants
themselves have not the means to con-
duct their business, and iu reality tho
banking capital, small as it is, is out
of proportion to The deposits In round
numbers we have, say $5,O0O,OOO of
bank capital. The deposits are now
about $l0,O00,00O, and seldom 20
abnve $l3,00O,0CO. The whole work
lug capital of the business community
is, therefore, at the utmost, say $I2,-
600 900 in cash available means. There
are no savings banks, trust companies,
etc., to speak of, and the insurance
companies carry comparatively very
small sums in cash or its eluivalent.--
At least the proportion of working
capital ontsido tho regular banks of
discount and deposit is less in New Or
leaes than in other cities.
The associated bank statements of
the different cities, therefore, will fur,
nish comparison that will not be-
against this city in regard to show
ing of the cash working capital Of the
commercial community,
The New York associated banks held
on October 9TH, 1886, 900, 900 deposits
on $6l 100000 capital. For each dol
lar of bank capital the business pat
rons furnish say $40 Of cash to work
with, and this proportion is smaller
than usual.
According to the last report of tho
comptroller of the currency that we
have at hand [Dec. 1881 the National
banks of New York ,ity had nearly Sc
of deposits for each dollar of capital.
When 1t is considered that the bust
ness transactions of New Orleans, re-
presenting in the main legitimate
trade, cover exchanges through tho
banks of nearly $500, 100000, it is
really wonderful how much ground the
$40, 100000 Of cash working capital
belonging to the business men of this
city is made to cover.
The sagacity and boldness of tie
merchants who handle so much bust
ness on such slender resources ought
to command the attention of capital
lists elsewhere. The limit Of business
enterprise in New Orleans is the purse
string, and any enlargement Of com
mercial relations must be preceded by
an introduction of fresh working CAPT.
tai. That is the problem that is fac
ing every merchant in New Orleans
now, as it has been for years past.
The purpose shonld therefore be to-
bring in outside capital, and the sue.
cess of the young men coming to the
front i'll commercial life depends largo.
ly upon that. The skill, energy and
foresight which accomplishes so much
with SO little means ought to command
the proper resources from abroad, and
would if the necessity, for. working
capital were more highly appreciated.
The problem is to command the ready
means from other centres where there
is surplus of wealth, to associate
with men from intersections possess
ed Of active capital. and enlarge, not
the banking shares, but the CONNER
cial financial strength to reap the ad
| vantages of the new avenues of trade
opened to US.