St. Tammany farmer. [volume] (Covington, La.) 1874-current, 1891-03-28
A BANKING SCHEME,

| A BANKING SCHEME.
a Proposition 70 Aholish th'
Present System.
IAsoo Thouoana 0oveEnQHeatal BANKS q
. Suhcsitsts-They 20 Lean Aeasy
- Borrower ae the Rate Of
Pear Per Csat.
Thomas E. HUI. Of Hills Manual
has been for some years engaged b
farming at Prospect Park. M. and
from . farmers standpoint he give
the following suggestions on banking
IN IN interview with . representativ,
of the Chicago Inter Ocean:
Why occasional money stringcncy,
Because through numerous bank and
other failures people become frightened
end hide their money. Two causes have
combined TO produce recent failures
One has been the late era Of real e.
tate speculation In the vicinity Of large
cities, inAating values to point that II
had to stop. The other has been the
steady diminution ofmoney through the
contraction of National bank currency.
Ten years ago the National hank circu-
lation was $So2, 900, 900. One year ago
Il was s9oo, ,ooo. 600 To-day it Is about
$50. Cox. 900.
Why do National banks contract their
circulation? Tho National bank law
enacted In 1858 and 1854 made il obliga-
tory upon the bank company to loan
one-tllird Of its capital to tho Govern
ment, upon which it was granted .
charter to do business for twenty years
and issue bank notes to tho extent Of
% per cent Of loan to Government. Al
Government bonds in the beginning Of
this system paid 8 per cent interest in
gold, and gold yielded 10 per cent. pre-
mium. banking was very profitable.
Latterly, - the Government will pay
no more than . per cent interest, banks
azo unwilling to loan it money. They
prefer not to issue National bank cur
Fency. but would rather take other peo-
PIES money on deposit, get full interest
for al they loan. and be free from the
annoyance of Government bank inspec-
ton; consequently they arc gradually
Withdrawing the currency they have is
sued from circulation.
But, It may be said, II the Government
could give encouragement why should
hot the present bank system be contin-
ued? Because our National debt is be-
ing too rapidly extinguished to allow
tho present system to be perpetuated.
Banks that have proven the most relia-
Bile, and have been Of the greatest serv.
leo TO tho people, have been those inti-
mately connected with the Government;
have been founded ON Government nc.
when the Government had .
large debt and had to borrow. Thus
The Bank Of Venice, founded In III,
owed IT. existence to the imperative
necessity that the government borrow
money. This bank, under government
control. was the admiration of all Eu-
rope for 600 years, and only ceased its
existence on the overthrow Of the re-
public IN 17o7 BY the revolutionary army
n France.
The Bank Of England, established in
1904. was organized as . means through
which to borrow money from the peo-
Ple. Tho government had been paying
fom 70 to 40 per cent. on money, which
vas difficult to get at that. William
Paterson, . London merchant, con-
'eived the idea Of organizing com
any to furnish $1,000. 900 TO the gov.
'Fnment - . permanent loan, for
'leven years. ct 8 per cent interest.
subscriptions to the entire stock wcrc
AIKEN In ten days after the books were
'peued, and from that day to this tho
oan to the government has been about
quail to it, capital. the bank company
their profit from their bank
lOtes In circulation and their deposits.
The government supervision over the
'ank has been such - to give entire |
% much 90 Chat the bank Il
llowed to issue 81. .000, 900 in excess Of
= gold deposits. This bank should b
and win Be. q tho peoples
Of the public debt Of England,
vhich Is q. .l0o, ,0oo. 900.
In contrast with the beneAcent serv-
- rendered the people, through the |
|ank Of England, was tho disastrous
TO the people through the
allure Of tho Bank Of Glasgow, which
rent down In 1873 owing the people |
s, ,0o0, 900; bank officials, free from
control. having squan-
cred its funds and miHepresentsd its
ondition for yeaEs before its failure.
The unreliable condition Of banks In I
b United States Il well illustrated in I
b Auctuating values Of paper money
iom 1870 to 1060-banlrs without COY
lnment control. The war came on;
10 Government found Il necessary to
onow. and then was inaugurated our
iational bank system, which, under
supervision and inspection,
- served its purpose with comparative
afcty TO the people. With the extin-
uishment Of tho public debt, however.
'hich Is down to 1eSo. .ooo. .ooo. the pres
at National bank system must be
hanged.
The defects In our present system arc
" following:
l. Even perfect - our National hank
vstem II the failures had been 90 nu-
'erous - to cause loss TO depositms
J Natioual banks Of 15o0. 900 annually
" tweuty-seven years prior to 1879,
lille the loss TO depositoss h other
anks WAS over Slo. .ooo, 900 peryeae dur.
9 the same time. Tia great number
bank failures Of late Il not only
king the hundreds Of thousands from
aifering bank depositoss and putting
,e same into few hands, bat money
eompels many millions Of an I
nal loes to the people from being
bliged 20 sell property at . sacrifice,
hile the e0oEmous mtesest which
ngroweFs are compelled 20 nav