The Kinsley graphic. [volume] (Kinsley, Kan.) 1890-1940, 1894-09-07
GIVE US GOVERNMENT BANKS.

GIVE US GOVERNMENT BANKS.
A Governmental Banking System La the
True Solution Of the Money Question.
ssBest banking system in the world T"
Over and over again we hear this as
sertion.
Let us see how true it Is Examine
the law.
A national bank is liable for twice
the amount of its capital stock. 1t is
not liable to depositors, nor any body
else, for any more. Thus, if the CAPT
tai stock of the bank is $50, 900, though
the deposits are s1O,OOO,0 900, it is liable
for only 100000.
A small pamphlet lies before ps, en-
titled "Chicago Bank Reports, July Is,
1894" Among the reports is that Of
one Of the leading banks. which adj
mits an Indebtedness of S35, coo, 900
one item of its debt being s13, 600, 600 to
individual depositors-
Suppose this bank were to fail ana
be prosecuted by its creditors. How
much do you suppose the law would
compel the stockholders to pay Of this
Indebtedness? Let us see:
The capital stock of the bank is
$1,000, 900. Consequently the liability
of the bank is SO 900, 900. We subtract
Sc, 900, 900 from s35, OOO, 900 and we have
s29, 900, 900 left, for which the creditors
could never prosecute the stockhold-
ers. In other words, this one bank
can fail and cheat the patrons Of the
institution out of s29, OOO, 900.
No matter how rich may be the
stockholders of this bank. After they
have paid up an amount equal to twice
the value of their original stock, they
are held liable for no more. They may
appropriated 500, 600, 900, yet their liza
bility is only for Sc, 900, 900.
Herein lies the danger, the insecurity
of our present national bank system.
The capital of the bank may be 81, OOO,-
900; the deposits may be $4,000, 900.
Eight millions are un secured, and the
depositors have no indemnity for their
money, and no means of getting it.
Suppose the government conducted
the bank. Every official in the bank
who handled it's money would be as
much under bond for faithful perform
ance of duty as the collector in our
townships, or our county treasurers,
are to-day.
At the present time the people have
no security in their banks. If they
borrow money, they are required to
give ample security, but when they
lend their funds to the bank they do SO
without protection against loss.
While the national bank is expected
to be little more secure than the or
binary private bank, it is really inse-
cure beyond twice the amount of it's
capital stock, and if the stockholders
have no property, then the depositors
in national bank get nothing.
The people at large know this, and,
unless it is imperatively necessary to
use bank, they hide their money. So
universally is money hidden as to make
it continually scarce, and interest high.
The result is, that business is dimin-
ished or depressed; people cannot pay
their interest; their property passes in
to the hands of the money-lenders, and
borrowers become impoverished.
Under government ownership, the
depositors in the banks would be abb
solutely secured against loss; the banks
would be filled with money-good peo-
pies money; money would be abun-
dant, and, if loaned upon absolute Sc
curities, worth twice what was bor-
rowed, the interest would be low, and
prosperity would become universal.
Which do the people want, bank
ing system under which the depositors'
money is absolutely safe, or the pres
ent system, in which no certainty ex-
lists that if the depositor leaves his
money in the bank, that he will ever
handle it again? Certainty, or uncer-
tainty, in the solvency of the bank
money abundant, or money scarce
money in universal circulation at low
interest, or money withdrawn from
the avenues of business-hidden, scarce
interest high-industries suspended
tramps and idlers Astounding?
Which do the people want?-Thomas
e. Hill, in Chicago Searchlight.