The enterprise. [volume] (Wellington, Ohio) 188?-1899, 1891-07-01
BANKS AND BANKING.
FOUNDATION AND PRINCIPLES
OF OUR NATIONAL BANKS.
Address by the Hon. Myron T. Herrick
Delivered before the Grange Of We'll
lington, Saturday Evening, June 10.


politics, finances or religion, for the sim
pie reason that it was our fathers and
grandfathers'. We see the gray dawn and
hear the murmers of the life in the new
century. We are living in. a glorious age.
We have had wonderful experience,
We desire to leave an imprint of progress
as indellble as did the beginners Of this
century. We demand progress in COM
merce and manufacturing, IN all the arts
an6 sciences; we demand progress Of our
banker, we even demand progress Of our
preacher.
II Is our aim and purpose to furnish
the best that the land will produce and to
aid In this vast enterprise Of feeding and
clothing the worlds people, money, banks
and bankers become necessary.
"Bank" Is an Italian word for bench.
The Lombard Jews, in Italy, kept benches
in the market places, where they exchang-
ed money and bills. When a banker
failed, his bench was broken up by the
popuiace, and be was, therefore, termed
'bench-rupt" or bankrupt.
The first mention Of banking is made
in Exodus xxi. 20, where it says: III thou
lend money to any of my people that is
poor by thee, thou shalt not be to him a
usurer, neither shalt thou lay upon him
usury."
The earliest modern bank was that OF
Venice, in iii, which was closed by the
conquest of the French in 1897, after a
useful course OF 626 years. Several Of the
earlier banks began at the following
dates: Venice, I'LL; Geneva, 1345; st,
Petersburg, 1850; Bank OF England, 1904
Scotland, 1906; France, 1900; Hamburg,
1919; United States, 1880.
The national banking system Of the
United States was established by acts Of
congress Feb. 25, 1868, and June 8, 1854.
Banking was first established in Europe
by the Lombard Jews In sos. The essen
tial features Of early banks were that 3
number Of people placed their money in
them and received in exchange for It
credit, or promise TO pay, which credit
they might transfer TO someone else. The
bank OF England was formed In similar
manner, Of company of person who ad-
vanced sum Of money 10 the government
and received In exchange an annuity for
il. This was the foundation OF the nation.
al debt Of Great Britain, and the funds are
now legally called "bank annuities.' The
bank cannot issue more than 1000
paper money. Any additional amounts
are covered by actual gold in hand all be-
ing secured by government securities or
gold In the vaults. Prior TO this the na.
tion's spare funds were deposited with
goldsmiths, and the receipts issued by
them were In circulation as bank notes
are now.
A national bank became necessary TO
Great Britain for the support Of the na-
tons credit and for the security Of paper
currency. II promised to be the means
Of reducing the rate Of interest and OF re.
storing coinage.
In 1913, sixteen years previous to the
establishment Of the bank OF England,
proposals were made for the establish
ment of a "model" hank and in 1858 a
national bank Of credit" was projected.
Neither were what was wanted and were
not carried out The substantial scheme
upon which the bank Of England was
formed attracted the attention of moneyed
men and many were anxious TO follow In
Its footsteps. A bank was proposed, 10
advance on the security OF landed proper
ty, similar to Senator Leland Stanford's
scheme. A company was formed and the
project seemed on the eve Of consumma-
tion. Unable 10 inspire confidence and
get money, the scheme fell through.
Many others sprung up that promised
we'll. but they all faded away.
/ refer to the bank Of England, since
our national treasury plan is in many re-
spects patterned after this wonderful In
stitution Through the centuries that
followed It's establishment, II has ever
been the sustaining strength Of the nation
In times Of financial trouble and disaster,
from the bursting Of the South Sea bubble
In 1921, TO the collapse Of the Argentine
Republic boom In 1900.
1t Is believed by mapy that by It's
prompt action and power II saved panic
throughout the world In 1890. Genera
'ions OF fiat money cranks have lived,
died, and, like their wild schemes, have
passed into oblivion, since Il began lis ca.
reer Of usefulness.
The bank Of France has had similar
history. | express an automatic truth
when ! sny that the founding OF q success
ful financial policy In government
means the successful establishment of thai
government. demonstrate this when
say that for 100 years we have found
our financial policy as II now exists TO be
equal to all emergencies. The founda-
tion was good, and II has grown with The
people and will he equal td'ihe demands
Of the one hundred millions of people TO
come 10 the new century. II was founded
by the great intellect Of Alexander llom-
ilion and Il commands the homage Of
men: aplan approved by George Wash
ington and bis great chiefjusllee, John
Marshall. Administrations md n.rties