The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1884-07-31
RANK REFORM.

1t is said to besfolly to lock the stable door
after the horse is stolen. Yet it may be well
enough, after all, to provide locks to prevent
future larcenies Public funds must be safely
kept. If all the money paid in as taxes, or held
in trust by administrators, receivers and the
like, in this city, is locked up in vaults, it
would withdraw 100000 from circula-
ton. Throughout the State itwould aggregate
500 OO0, 600 For the time being this money
might as well be destroyed.
Then, again, every farmer, laborer, lawyer,
or mechanic must have a safe place to deposit
his surplus until such time as he needs it.
If they secrete their money, it might as well
be at the bottom of their wells. So mer-
chants, manufacturers and railroads must
have some safe deposit for their daily receipts
until their bills and pay-rolls are due If
locked up in their own safes large sums are
retired from circulation. IF every one keeps
his money hid away or locked up business is
Frustrated. The prosperity Of community
depends upon sound, safe, circulating cur
rency. Our money is as sound as the govern
ment But its free circulation can only be
secured through safe banks Of deposit.
Unless money circulates we might as well
have none at all. Idle money is dead money
This city has suffered severity in the last ten
years by the failure Of banks Of deposit. No
l:ll 80, l., ;,,,, hx, +Le fo;1,1ro f
national bank. No depositor has ever lost a
dollar in national bank in this city. The
failures have been Of State and private banks.
This is good time to seek the cause and
cure.
The cause is clear. A national bank is re-
quired to make public sworn statements Of
its condition. It is often examined. It is
required by law to keep on hand in its vaults
fixed portion Of its circulation and deposits.
It is prohibited from loaning more than one
tenth part Of its capital paid In regardless Gifts
deposits, to any person, firm or corporation. It
cannot engage as partner or stakeholder in
any other business, or deal in real estate or
stocks. In short, under penalties, it is kept
strictly to a banking business.
There is no such limitation on other banks.
They are not examined. They make no pub
lie statements. They loan without limit
even to their own members They engage in
other business. In short, they can, and too
often do, use the money of the people as they
please There is no means provided for the
public to know anything Of their solvency,
nor any penalties or provisions to secure the
safe-keeping of the money Of depositors. In
the strife for business they pay interest on
deposits. No man can hold money idle on
which he is paying interest. This incites risks
and speculation. It is the dry murrain of
our banks.
Now, the public have the right and should
so regulate the business of banks taking de-
posts from the people as to insure their safe
keeping. We should have State law pro-
hibiting bank from loaning its deposits to
its own members, or using them, directly or
AHuIecoAyt II Nuol1 oolcI alistus. AH0H0 ShOulu
be fixed limit to the sums loaned to any one
person or corporation There should be a
State bank examiner, with full power to close
a bank whenever the common deposits were
being imperiled. Courts should have authority
to designate repositories for public and trust
funds and require security, like the govern
ment exacts. Perhaps settlement with in
terest-taking depositors, in case of failure,
should be postponed until the other depositors
are paid in full These reforms are impera-
lively necessary to the public welfare. They
must be secured by the enactment of a thor
ough State banking law BY the next Legis-
lature.