The Atlanta constitution. [volume] (Atlanta, Ga.) 1885-19??, 1892-02-16
FRANCES EXAMPLE
THROWS STRONG LIGHT ON THE SIT
UATION At TIE SOUTH.
Tho Saving Habit Redeemed the Natiou-
The Wonderful Work of the Bank OF
France-Self-he1p the Best.

France-Self-help the Best.
BY the unequal disbursements of the federal
| government, tho southern states have wrested
| from them every ten years as great sum as
Germany eXacted of France for q war in
demnity. Bismarck, at the end OF a bloody war;
| did not put upon an ancient enemy heavier
burden than the ordinary operations of our
government place upon us in time of pro-
| found peace.
| Who could have foreseen at the time of the
| commune that bruised ana bleeding France
| would,i twenty years. become money-ender
| to England and Russia and save the world
| from financial anarchy.
| The same habit of saving and selfhelp,
which redeemed France, may in short period
| restore tho southern states to financial indie
pendence. The south has begun the habit of
| saving but she needs to think a little more OF
self-help. Now let us look at the situation.
There are two things which make n heavy
| drain upon the resources of the southern states.
| One is the unequal disbursements of the fed
| eral government, and the other is the regular
and honorable demand for interest on our
| public debt and our railroad bonds By these
| causes the southern states are drained of
| nearly two hundred millions O year. and if
| interest payments on industrial and CONNER
cial loans were added, it would be found that
| the entire proceeds Of the cotton crop
| absorbed in interest or wrested from us by the
| federal government
1T is not merely that federal taxation in the
! south amounts to a hundred and twenty or
| forty milions-for larger sum is collected in
| the north and west--but it is tho fact that
! very little of what we pay the government
| ever comes back in disbursements The vast
sums paid out for pensions fall on the other side
of the Ohio and Potomac, and nearly the
| whole Of the enormous disbursements for the
| army, the navy and Indian affairs go the same
| way while $50, 600, 600 OF interest and premium
| 90 to the bondholders in the great cities Of tho
| east.
| A great deal has been said about bringing
| northern anu foreign capital south, but unless
| the capitalist comes along with his investment
| and spends the interest and dividends III the
| same vicinity, the advantage is not so great as
| some people think. He who gathers the odds
and ends Of small savings from the corners
| and the hedges and places them in one bulk,
| where they will be a power does better
thing than the man who goes outside and
| brings in some lonc-headed man to take
| a mortgage and retire with the interest and
| dividends if not eventually with the whole
| property. Millions of dollars worth Of rail-
road property built in the old-fashioned way
| by the subscriptions of local, capitalists,
| after being subsequently mortgaged have
fallen into the hands of distant owners, who
| bought the property for song and are run
| ming it for revenue only.
France helped herself, and today she has
| the strongest financial institutions in tho
| world. The Bank of France kept the discount
rate at 5 per cont in the troublouS times when
| it went up to 6 per cent in London. Consul
| Knowles, of Bordeaux, in special report on the
! Bank of France says: This institution has
| locked up within its vaults moro money
actual money than the five greatest European
| banks of issue combined. namely those Of
| England, Germany Belgium Austria-Hun-
| gary and Italy When every bank
| fearful of crash, was rapidly calling in its
loans; when the entire atmosphere
| of finance was filled with doubt,
/ misgiving and uncertainty, and the rate
of interest and discount mounted with almost
unprecedented rapidity, the Bank of
| France, calmly surveying the situation and
/ awaiting itself, at the same moment, of IA
vorable opportunity for mighty coup d'etat
| and of making an advance upon exceptionally
| advanta seous terms, unlocked its Golfers, with
| drew small portion OF its reserve fund, loaned
| the Bank of England the sum of $4,000, 600 in
| gold and so averted panic"
| Surely we may study the methods of these
! incompatible tinanciers Their great bank
has 25S branches, and with a reserve of $780,
| 1000 in gold and $3.50, 513, coo in silver, it
| has an issue of bills amounting to S612, 410602.
| This issue alone is nearly much per capita as
| all the currency of tho United States. Perhaps
| It'll partly because they work out their own
| financial SYSTEM instead OF adopting England's
! ideas, that the French are able to help them
| selves with such strong hands.
| Returning to our own country, 1T would DO
| foolish to say that investments OF outside
| capital are not an advantage, when the rate is
| low enough to let the enterprise live, but the
| investments of home capital are better. be-
| cause the interest and dividends remain at
| home and are expended reinvested in the
| same vicinity.
When a country has been devastated or inn
| povershed, and outside capitalists are good
| enough 10 offer assistance at rates which the
| resources will stand, it would be absurd to de-
| cline it, but when the country Is able to pay
| its debts it ought to do The point / make
is that the odds and ends of capital now una
| valablo because they are scattered or wasted,
| would, if collected Systematically make q
| large amount of available funds with which to
| pay off the debts due abroad.
| England, as q creditor nation, is able to keep
| the balance of trade in her favor when the
| commodities she buys would turn the scale
I against her Her large bill Of Interest must be
| deducted from our bill for cotton and wheat.
| But for this tho enormous exports OF this sea-
| son would have made the balance in our favor
! much larger. When her bill of interest is not
| large enough she sells some American securi-
| ties and reduces the balance still further. In
this way John Bull keeps grip on his gold
| and euchers as at last. AS lender. Also he
| controls the trade Of South America. For
| this reason home capita! is tho best.
| But suppose there is no homo capital to IN
vest? Now we come to the point. The largest
single body of money in the United States is
found in the deposits OF the savings banks
put there by the very class of people who are not
| supposed to have any money. The comptroller
| of the currency i'll his report, recently issued,
estimates the deposits of the savings banks of
the United States at S1,623,o79,7l9. This
amount, collected from the thousands who
have little to spare, is more than the deposits
| of the national banks, and nearly double the
| amount held by the trust companies and state
| banks combined The funds of savings banks
may be invested in first-class bonds. and If we
had savings Of this amount m the southern
| states these institutions would be able 10 take
| the best railroad and state bonds and stop
| drain of nearly 100000 900 q year. Some will
! say there is q very large "if'' in the way. Not
so large perhaps as you think. The savings
banks Of New York and Massachusetts alone
| hold half the total and half of it accumulated
in ten years.