The midland journal. (Rising Sun, Md.) 1885-1947, 1889-02-08
The Banking Business.

The Banking Business.
Of all branches of business that of bank
ing has ever been the most profitable. OF
course we do not include speculative branch
es Of business which is species of gam
bling, hazard business. But among TALL
the steady, methodical, legitimate lines Of
business, conducted on strictly business
principles, banking stands at THE head on
which tie sure inflow of profit can be based
Under the old state bank systems there was
great deal of wildcat banking done
which was nothing but swindling and moi
legitimate banking at all. Under these
state systems, the corporations or indiyid-
uals, as the case might be, issued their own
bills, and such banks when conducted hon
es,ly as possible, were liable TO wreck and
ruin when financial panics swept over the
country. This was changed when the
National Banking system superseded the old
precarious State system. The National
government guarantees The note holders
from loss and the banks are placed under
serveilance, which latter precaution, how
ever, does not afford the note holders any
additional security The anomaly of this
system is that il rests wholly on the public
debt The nation holds in custody the cyl
dences of its own debt, as security for the
bank bill that circulates as money. and
while it is paying the holders of its debts
interest on the lonls representing the
public debt, it furnishes them currency for
almost nothing to be used as the money of
the country-"currency of the realm,o to
use an ola phraseolcgy. The banker is re-
ceiving interest from the government, on
the same capital that he is using in his
banking business. This piece of legislative
jugglery re submit is both foolish and un-
just. When the banker is furnished with
bank bills by the government in exchange
for bonds, in place of holding those bonds
as collateral they should be cancelled and
interest stopped. The banker who furnishes
the bonds and receives bank bills in ex-
change is not responsible for the redemp-
ton. The government assumes their re-
demption. Then why not make the trans
action an honest business transaction, and
relieve the public from the further payment
of interest, and redeem the bankers notes
on presentation in gold and silver, without
in addition, paying interest on the bonds
which have been exchanged for the bank
bills? But in place of this honest business
transaction being carried out, the capital of
the bankers is actually drawing interest
from the national treasury while thew are
using the bank bill it stands for to discount
with This, we submit, is Discrimination
OF the government against the people and
in favor of capital which is TO the last de.
gree unfair and a rank piece of Injustice. II
is the government credit which stands bo-
hind both bonds and notes, and wbv this
dual Indebtedness heaped upon the people?
The treasurer drawing interest from them on
the bonds and the bankers drawing dis.
counts over the counter for notes his inter
est bearing bends represent? This repre-.
sents the most gigantic piece of money
shaving ever inflicted on people by gov
eminent in favor of a money class at the
expense of the industrial class. But this
unfair privilege represents but a part and
comparatively small part of the source Of
profits which fall TO the share of those On.
gagged IN banking. There are 3,l4O Nation.
al Banks in the United States according 70
the Treasurer's report, with an invested
capital, measured by the face of their bonds
held by The Treasurer, of only SI6S. 557 TT
For these bonded securities the government
has issued the banks bills amounting 10
Sl5l ,IO2, 900, and they hold or deposit
u .S5OOOo,C9o. The largest part of these
deposits are on call on which no interest ;s
paid to the owners Or depositors of The
money. The National banking law allows
all Of these deposits to be used by the banks
to discount with, except 5 per cent held in
country banks and II per cent held in citv
banks. When interest is paid on deposit by
banks i! is not over per cent but they loan
the money al per cent at least. There Is
at least Sl,2l5,000,OOO of these deposits. in
addition to bills furnished by the govern.
ment, at the disposal of the banks to use in
discoun1ing. They are not required to give