St. Landry democrat. (Opelousas, La.) 1878-1894, 1885-02-21
A Financial Article.

Banks, as they are allowed to
run, in many parts Of the country,
are not much safer than q stocking
leg to put money in, and the Gov
eminent can not take action to make
them safe a minute too soon, and
while about it make all banks safe,
whether national or otherwise. The
national banks are compelled to
make their circulation good by de-
posting Government bonds, but
they may have a millien dollars on
deposit and have the Cashier steal
it, and the depositors can whistle
for their money. What the country
wants is banks where money is safe,
and where it can be got when the
owner wants it. The way it is now
parties who are supposed to be
good, start a bank, with $4,000
capital. Five good men subscribe
$4,000 apiece, and the bank opens
for business. Nobody knows
whether the $4,000 capital is paid
in, or if it is it may be taken out the
same day by the stockholders. De
positors fall over each other to get
in the bank to deposit money, and
before the bank has a chance to
loan a dollar, thousands Of dollars
have been deposited, which they
loan. IF Tom wants to borrow a
thousand dollars, he goes to the
bank and borrows Dicks money
and pays to the bank 10 per cent.
What does Dick get? Well, very
likely Dick gets left The bank
may be lending Dicks money for
years, and making fortune out Of
Dick just by the handling of his
money. If he let's it remain three
months, he may get 3 per cen. in
terest on it. FINAL ", Dick needs
his money in his business, and
draws it out, and after q while The
wants to borrow thousand dollars.
Does the bank accommodate Dick ?
You would think that after the bank
had made a heap Of money lending
Dicks cash, that it would be no
more than right to help Dick a lit
tie. Dick can have a thousand
dollars if he will get two good in
dorsers. He didn't ask any indors-
ers from the bank for his money,
but he gets the indorsers, and the
bank kindly lends him Toms
money, which Tom has deposited.
If Tom wants his money, the bank
pays him with money that Harry
has Just deposited, and everything
is lovely. But when all the boys
want their money at once, the bank
closes up and hangs out a sign that
the bank is temporarily embarrass-
ed, but will pay a hundred cents on
a dollar as quick as the President
gets back from Europe and they
find the cashier. Depositors are
allowed to send an attorney into
the bank, and he finds everything
there all right except the money.
The stock of the bank has been
hypothecated that is, the stock
holders have placed it in the bank
and borrowed Tom and Dicks
money on it, and the stock is put
i'm as assets. Tom and Dick can
have some of it if they want it, but
it is not worth the paper it is print
ed OIL. The affairs of the bank are
wound up, the old notes that have
been taken for the money of deposi-
tors are sold for o song, and deposi-
tors get fifteen cents on the dollar
and consider themselves i'll luck.
A depositor meets the President a
year after, riding in his carriage,
and says "Say, l thought a na
tional bank was good. | thought
YOU said the Government was at
the back Of a national bank" The
President says: IF you have any
of our currency that we issued. you
can have it redeemed at Washing
TOM But the depositor never saw
dollar of the currency. If Con
gress passes law that nobody can
/ run bank without putting up a
dollars worth of real estate for
every dollar the bank receives in
deposits, so that any bank is good
that is allowed to do business,
there will not be so many times in
the history Of the country when
everybody is out of money, with
plenty due, and unable to collect a