Barbour County index. [volume] (Medicine Lodge, Kan.) 1880-current, 1892-02-03

BANKS AND INTEREST.
The People, Through their Governments,
should Perform the Functions of Bank

Inc feople, Through their Government,
should Perform the Functions of Bank
ing.
In the American Banker of October
"a, 1891, l noticed series of clippings
taken from an article from the pen of
Mr.. Edward Atl1iasou and first pub
lished In the Manufacturers Record, of
Baltimore, under the caption Banks
and Banking"
From su clippings / select the fol-
loving matter upon which to offer a
few comments. Mr.. Atkinson SAYS:
1t may finally be held that the utility and
service of any system of banking in any state OF
section depends wholly upon the character and
credit OF the people of that particular section.
II there is anything settled about financial mat
tiers II is thiS-that the requirements for given
community for coins, notes or other forms OF
lawful money or of circulating medium is in in.
verse proportion to their intelligence and to
the credit 10 which they are entitled by virtue
or their Character. The greater the intelligence
and the higher the character, the less actual
money, the more credit. No section can be
safely trusted and no bank can be safely estab-
Hshed where the mass of the people look upon
the bank and banker money sharks a term
sometimes applied or as ''usurers," or ssgold.
bugs, or as anything but agents or agencies
working with the people of community for
mutual service. As l have repeatedly stated,
and as all writer's who know ANYTHING of the
subject have repeatedly proved, the function of
actual coined money or notes convertible into
any kind of lawful money or coin is very limited
in comparison TO the function of credit That
community which condemns or damns the bank
and banker is not tit to be trusted, and in that
community no kind of money will ever be
abundant, because it is not entitled to credit
1t would be verv interesting to know
just whose credit Mr.. Atkinson is
talking abont and who it is that fur
nishes any given community with anv
species of credit" that is any better
than the ''credit" of the community it.
self Mr.. Atkinson saws, and he says
truly, that 1.-The function of actual
coined money or notes convertible into
any kind of lawful money or coin is
very limited in comparison to the func-
ton of credit But is it not barely
possible that the reason this is true is
because money, being limited in its
supply by law, is not sufficiently plenti-
full with which to do business upon a
cash basis? There can be no success
full denial offered to the statement
that as all real wealth is produced by
labor, all real credit" must rest upon
the productive capacity of any given
community. Banks produce nothing
Moreover, as money is simply the legal
representative of produced and ac-
quired wealth, all forms of wealth
should be legally entitled to be repre-
sented in money. But because of a
law that discriminates in favor of cer-
tain forms of acquired wealth-gold
and silver-the amount that these
metals lack of furnishing sufficient
money to transact business with has
to be furnished by credit as a sub
stitute. But whose credit? Mr.. At
kinson writes as if he thought it were
the banks that furnished this credit.
l assert that it is the people who really
furnish the credit and the banks sim
ply make enormous profit by hand
ling it
Let us see. From the Workers Her.
aid clip the following artic e:
The business of banking is ancient and honor
able because it is profitable but the people don t
seem TO uI1 - tand the fundamental principle
OF banking, although every person must know
that banks loan money to business people
who go and pay their debts with that ''bor-
rowed" money, which in turn is almost certain
to be deposited in that or some other bank
''before sundown.''
The following illustration is based upon the
experience of business men in every city on this
Cdl III anu II Srtn uC easily UuuCESIOOU Dy
twenty-one persons whose initial letters begin
| with the letters of the alphabet, stopping with
| the letter U
| The national government having Called its
bonds for payment, under section ,693 of the re-
vised statutes as well as under the act of March
! B. 1881, Mr.. A goes to the treasury department
| at Washington, ID. c., and lays down his bonds
| to the amount of S1OOOO0 and takes up his money
and goes around TO his bank where he leaves it
and gets a certificate of deposit" which he
puts in his pocket and goes on about his private
| business, having unbounded confidence in the
honesty and ability of the bank to redeem his
| certificate of deposit, at any time.
The bank, being required by law to set aside
! twenty-five per cent of all deposits as "a reserve
for the redemption ofits certificates of deposit
| does so, and al once loans the remaining sew
! enty-five per cent. of Mr.. A s deposit TO Mr. q
| who pays it TO Mr. C. on account, who in turn
| takes il back TO the bank and gets certificate
! of deposit for it, just like Mr.. A
! This process is continued on down the alpha
| bet by twos until the transaction finally stands
| rs follows.