The midland journal. (Rising Sun, Md.) 1885-1947, 1892-03-11
COVER n M EMIT
BANKS.

Philadelphia Item of Feb. 18th, plan
of government banking the caption Of
which is IA Banking Plan. Borrow
ers Of Money TO be Saved $500, 000,-
000." The following extract explains
the principle aud main advantages
claimed for the plan. Public opinion is
moving in the direction of government
control of money in its hiring value as
we'll as Its original issue.
PROTECT INDUSTRY, BUT NOT THAT
WHICH sAPs INDUsTRY's
VITALITY.
While there are grave objections
enough against the interference Of our
Government 10 the shape Of competi-
ton with the industries of the country,
banking interest for loans does not
come under that head; banking interes;
is not an industry in the sense Of devel.
oping country's resources; in truth,
it is the heaviest obstruction to indus
try, q eountry's development has to
contend against. All charges for the
use Of money above cost is hindrance
to trade, and an obstruction to manu-
facture and production. No better
illustration of this fact is needed than .
reference to the condition OF England
when the Bank Of England puts up its
rate Of discount.
Trade 10 that country can only be
carried on with ease when the rate Of
interest is at three or less per cent.
When the rate Of interest is put up to
1--WE per cent nearly one half of the
business Of England is brought to a
standstill; when the rate is put up to
six per cent nearly two-thirds Of the
total volume Of trade is stopped, be-
cause the rate of interest charged Tor
the use of money is more than the
profits Of business. Now, the same rule
holds here although our merchants are
not fully aware of it.
In our case, the loss OF business due
to the interest we have to pay for the
use Of money can only be known when
the rates for money have been put
down to cost then the enormous ex-
pansion in all branches Of trade, will
show people what it cost the industrial
Development of the country, to be
obliged as we are now, to pay over
twenty-five hundred million dollars a
year in order that We can borrow money
enough to earn our bresd and butter.
Our Government can do our banking
business a great deal better than pri-
vate banks (for oil our banks are
privately, and no panics could occur
under this new system, for plenty of
money could be had at any time, and
no occasion could occur for boarding,
which is one of the great evils Of the
present system. 1t is recommended, in
connection with this system, that sub
banks be established to replace pawn
broking establishments for right there
is q socurce Of misery which would re-
quire big volumes to describe, and this
grave trouble is robbery Of those who
can least afford it.
These sub banks could lend money
at cost upon any security which
possesses market value. The largest
banks in southern Europe we're orig
inally organized to exclusively do this
class Of business, and more or less under
Government supervision but most Of
them have forgotten their origin in the
success that has since attended their
their efforts. There are plenty Of Gov.
eminent precedents for the establish
ment Of places to lend money to the
poor at cost rates.
By ASSISTING THE FARMERS, COM
MERGE Is EXPANDED
Those banks in farming districts
could loan to farmers on proper secu-
fity and thus enable them to tide over
bad seasons. or make necessary improve
ments in their properties. This accom-
mediation, afforded the farmers at cost
would end the requests they have lately
made Of the Government, and in con-
nection with such loans the establish
ment Of Government warehouses, OF
warehouses under Government agents
supervision, where warehouse receipts
could be given and used as bank COL
lateral, would permit bank loans ii
accordance with the principles of per-
fectly sound banking.
This system of banks might, OIL
might not, be Joined to the Treasury o.
the United States; either way all it
advantages would be fulfilled. NJ
capital Is necessary for such q banking