The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1894-02-26

all classes the safe limita along theee
lines, and prudent bankers are ever
careful to keep their margins at sale
average. Such an unexpected e1d uni
versal, and in many cases entirely un'
called for, demand ION the banks for
money last year was entirely without
the experience or reckoning OF every
banker, even with 20 years OF expert
ence behind him.
After dilating upon the causes of this
extraordinary demand for money, the
extravaganza OF the age, and the Lessons
to be learned from the monetary crisis,
he concluded as follows:
There should be better understand
ing between the banker and the depos-
itors. Want of confidence aud CO.
operation between these two Glasses is
what caused most OF the trouble lset
year. After all, it lie the depositor and
not the stakeholder that furnished the
bulk OF the capital employed in the
business. There are probably 10000
banks and bankers in the United Statee.
The com ptroller of the currency has re-
ports from 1896, but some did not re-
port last year. The paid-up capital of
these banks is 1904, 1907 900. while the
amount of deposits is SO. 736, 1886 100, and
the aggregate resources 5000, 51l 800,
These figures show the important posi-
ton which depcsitors sustain to the
banking business of the country. OF
course, many of these depositors are
aso stockholders. This dual character
puts an additional responsibility upon
them to act considerably in times Of
financial strain. Any other line of con-
duct on the part of either a stakeholder
4 ~
may we'll be charged against them by
the bankers at the proper time and in a
practical way. 1t should be the aim of
all concerned to hold the business up to
O high level OF honorable dealings all
round. Bankers have it in their power
to conserve all that is good and worthy
duty to the community to tone up hon
esty and integrity along all lines.
w. @. Bush of Yolo was the next gem
tleman to address the convention. His
subject was, The Relations That Should
Exist Between City and County Banks
and the Advantages That Would Result
From Their Com bined Action During
Periods of Financial Stringency.
Frank Miller of Sacramento spoke on
the topic, Unsecured Losns--Time Yer
sus Demand. He quoted from the re-
port OF the comptroller OF the currency for
1898 and showed that in national banks
the unsecured loann payable on demand
are only one-twelfth of the unsecured
loans on time in San Francisco; the
ratio is about one to one; in other words
local bsnkers carry about half OF their
uneecured loans on time and the other
half on demand. The latter condition
he ascribed to the system of overdraits.
In conclusion Mr.. Miller offered the
following resolution, which was referred
to the proper committee:
Resolved, That this convention ap.
prove OF writing all loans on time with
the exception OF those that are occurred,
and of those which are made to borrow
ers who reside outside the limits OF the
state, and wefurther approve the custom
OF writing the loans without interest
and deducting discount.
]. B. Lanksrshim OF Los Angeles, in
brief and readable paper, advocated
lower rates of interest to depositors as
the best means to secure increased
stability to savings banks and to force
the more general investment of capital
in industrial enterprises, and so in the
development of the state.
Lowell Whites paper closed the morn
ing session and was comprehensive and
exhaustive. 1t dealt with Savings
Banks; Their Mission and Duties" He
defined the origin of savings banks and
then pointed out the very different
character of those on this coast from
those in the down.east states. Then he
defined the difference between savings
and commercial banks, showing that
there are no natural antsgcnisms be-
tween the two, and summed up that
portion of his paper with the epigram-
matte remark: Savings banks are
creative, commercial banks adminietra-
tive; when nothing is created there will
be nothing upon which to administer"
Then Mr.. White plunged into an attack
on what he considered popular errors.
He eaid
OF all wild financial delusions that
have ever obtained, the widest one is
that rates OF interest ever have or ever
will be determined by the state or by
any association of it's people; they are
determined by the law of demand and
supply, and as between lenders and bor-
rowers that law ia voiced by the borrow
ers the latter may compel q reduction
of interest at any time by collectively
abstsining from borrowing. This is the
secret in the reduction of rate from per
cent per month current in the early
fifties. Money, or perhaps 1t should be
said its use, is q commodity, and like
other commodities, has no immutable
and Interchangeable value. AT any given
time it is worth just what it is worth in
the market, and it is impossible to see
how any movement can consistently be
made to fix the price of money that does
not at the same time fix the price of
wheat, sugar, beeves, town lots and
rental of houses. Not only are the d.
rectors and officers of savings banks
under obligation to secure for the benefit
of their depositors current rates of in
terest on their loans, but their own self
respect demands that their acts shall
chow that they are not entire strangers
to the principles of finance as expounded
by Adam Smith, Ricardo, John Stewart
Mill and other authorities on the SUBJ
ject OF political economy. Farming in
California today is failure il upon it is
based the hope that fortune is realized
in or 10 years that will enable the
operator to remove to q city and live at
his ease bat it 10 not q failure when the
object is to live on th5 farm, combining
wants in the main to what the farm eau
supply and gradually accommodating the
comforts and, to some extent, the lux
uries of life.
The assertion that large capitalists