Telegram-herald., 1891-02-07

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Thomas y Hill a. Hllts Manunl
Aas bssn for e,ms yeeRs engaged -
Hrming - Pronpect Park. Ill. ADD,
ihom fannsvs standpoint hs gives
the falzo~ing ss19ysssipas On banking
In an interview With . representative
of the Chicago in1pr oesen;
Why ocsssaonAl Nancy stringency,
beesnss through pamerous bank and
other failures peopxs become frightened
and hi4ia their mooney. Two causes have
senhined 10 produce recent failures.
oas has been the late era of real CO..
tate speculation In the vicinity Of large
eiiieA Initiating values 10 point that il
had to stop The other has been the
steaiy elimination of money through the
contraction Of National bank currency
Ten years ago ths National bank eircu-
latioa was S5sz. COO. .0oo. one year ago
IL was seeo. ooo. 900. To-day IL l. about
$50. .eoo. coo.
Why do National Banks contract their
eireulAtsnn7 The National bank law
enacted In 1898 and 1854 made il obliga-
tory upon the bank company u loan
on~third OF its capital to the Govern
ment. upon which IL was granted a
sharter 10 do business for twenty years
and issue bank notes 70 the extent OF
90 per cent Of ipan 20 Government As
Government bonds Ia the beginning OF
this system paid per cent. interest in
gold, and gold yielded 40 per cent. pre-
Iai0n. banking was very profitable
LatseFly. as the Government VIII pay
no more than 3 per cent. interest, banks
are unwilling 20 loan il money. They
prefer not TO Issue National bank cur
rency, but would rather take other peo-
plies money on deposit. get fall interest
for all they loan. and be free from tha
annoyance Of Government bank inspec-
tion; consequently they arc gradually
Withdrawing the currency they have is
sued from circulation.
But, IL may be said. IL the Government
could give encouragement why should
not the present bank system be contin-
ucd? Because cur National debt Is be-
ing too rapidly extinguished TO allow
the present system 10 be perpetuated-
Banks that have proven the most relia-
bic, and have been OF tho greatest serv-
ice 70 the people. have been those inti-
nlately connected with the Government;
have been founded on Government ne
cessities, when the Government had
large debt and had to borrow Thus
the Bank of Venice, founded in 1tsx,
owed it's existence 20 the imperative
necessity that the government borrow
money. This bank. under government
control, was the admiration of sll Eu-
rope for 600 years, and only ceased its
existence on tho overthrow of the re-
public in 179T by the revolutionary army
OF France.
The Bank OF England, established in
1894. was organized Is 4 means through
which To borrow money from the peo-
pie. The government had been paying
from 90 to 40 per cent. on money. which
was difficult To get at that. William
Paterson. London merchant, con-
eeived the idea of organizing a COM
pany TO furnish sS.0oo.oo0 to the gov
eleven years, nt s per cent. interest.
Subscriptions to the entire stock were
taken in ten days after the books were
opened. and from that day TO this the
loan TO. the government has been about
equal to it's capital, the bank company
obtaining their profit from their bank
notes in circulation and their deposits.
The government supervision over the
bank has been such as To give entire
confidence, so much so that the bank is
allowed TO issue SIS, 000. 900 in excess of
its gold deposits. This bank should be
maintained, and will be. as the peoples
guardian of the public debt of England,
which is So, soo. .ooo, 900.
In contrast with the benefcent serv-
Zee rendered the people. through the
Bank OF England. was the disastrous
consequences to the people through the
failure OF the Bank of Glasgow, which
went down in 1878 owing the peor'c
&3, 0oo. 600; bank officials, free from
government control, having sGuan-
dered its funds and misrepresented its
condition for years before its failure.
The unrsliable condition OF banks in
the fuctuating values of paper money
from 1890 Co 1s6o-banks without Gov
crnment control. The war came on;
the Government found it necessary "a
borrow, and then was inaugurated our
National bank system, which, under
Government supervision and inspection,
has served its purpose with comparative
safety to the people With the extin-
guishment Of the public debt. however.
which Is down to $50, ,O00, eco, the pres
ent National bank system must be
changed
The defects in our present system are
the following:
4. Even perfect ss our National hank
system is the failures had been so nu.
merous as to cause loss 90 depositorS
In National banks of s50o.00 annually
for tweuty-seven years prior 20 1879,
while the loss 70 depositors in other
banks was over sIo. 1000. 600 per year dur
ing the same time. The great number
OF hank failures Of late is. not ouly
taking the hundreds Of thousands from
suffering bank depositors aud putting
the same into few hands. but money
strinCency cou1Peis macy millions Of an.
nuaI loss 70 the people from beina
obliged 70 sell property ss sacrifice
while the enormous interest which
borrowers are compelled - pay
in the money crisis Is snother
loss Of many millions 70 the people
y The present system is one of favor
ftisrn. The man so fortunate as 10 Dc
business at hank ean have accommo