The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1895-08-03
THE BANKS BIGGER THAN THE
GOVERNMENT.

Instead of showing to-day how the de-
pendence of the government on the
banks was brought about, we make
space for thoughtful editorial from the
Springfield Republican which emphasizes
the danger of governmental dependence
on any private syndicate. Later on we
will show that this dependence has been
brought about step by step by the very
men or their representatives who are
now being paid for their so-called spa
triotism" in protecting the Treasury.
The Springfield Republican is gold
standard paper of the best type. Its
closing paragraph admits the contention
this paper has been making, to-wit that
under gold standard stability" cannot
be maintained except by dependence
on the banks that is humiliating to every
good citizen The Republican asking,
after the syndicate, what2' says:
"Uncle Sam is in the same tender ard
considerate hands during the period of his
uldUcIdI
of the fever five months ago. A slight
indisposition caused hy the loss of 3d.
900, 600 gold has now been overcome by
deposit of an equal amount of the metal
in the treasury by the bond syndicate in
change for the legal tenders on which
the other gold was drawn out. But the
doctors and nurses have been well paid
and Uncle Sam need not feel too proud
to accept little extra help from the
present guardians of his interests. He
may not enjoy the sensation of being
stretched helpless on his back for so long
time with the sick chamber put in
charge of strangers of foreign connec-
ton, but there seems to be no help for it
at present.
After the syndicate, however, what z
These doctors and nurses quit the case
on October /. They must be re employed
at very handsome fee if Uncle is to re-
ceive continued application of their
gold cures. Judging from the rate at
which they value their present services,
$40, 900, 900 will be about the figure for
full years treatment from that date.
Your Uncle will hesitate a long time be-
fore concluding such an arrangement,
and will probably try to walk alone for
little while again.
We are glad to find the New York
Journal of Commerce disposed with us
to look ahead a few days and consider
the chances of this go-it-alone under
taking which must be assumed in about
eight weeks. This paper points to the
fact that during the past ID years the
United States has exported an average
of $45, 900, 900 Of gold and that there is
no reason to suppose we shall not con
tinue to be subject to similar drain.
Meantime the banks refuse to cash the
checks of importers in gold, SO that no
gold is paid into the treasury through
customs receipts, and they refuse to give
gold exporters any of their gold, com
polling the latter to 90 to the sub treasury
for it. In short, all the gold that comes
In and all that is mined is being absorb
ed by the banks and held there, while
all that goes out comes from the
governments reserves. The Journal of
Commerce says
There are those who imagine that now
that the syndicate has done SO much to
restore confidence and to repair the M
chinery of bus ness ''aff airs may be safely
left Co run thems Ives. . This is a very
narrow-sighted mistake. With oil it's
help, the syndicat9 hes left the main thing
undone. There Id fficulty to be remedied
lies in the inability Of the ire sury to get
ard to keep enough gold to maintain its
ress.ve and preserve gold payment. There
alone centeTs the di ease. The synd cete
has loaned the government enough gold to
satisfy its w n 8 for a few mon hs, but II
has done n 5thing t ,wavd either stopping
the future export drain or b inginZ BAG x
to the government its Wonted gold income
through the ban IS In payment for Gu stoms
duties 1t follows, therefore, that all the
recovery OF confidence and OF business is
b sed upon transi Mt operation when,
when withdrawn, will leave us where We
were before last February; unless the
banks, the only possible source o. lasting
remedy, come to the rescue by resuming
gold payments TO the governm ut.
This is precisely the situation as we de-
scribed it few days ago. All that the
syndicate has done has been to give the
country breathing spell and help it for
the time being to forget our financial
difficulties, even supposing that sale
Of securities to Europe is effected large
enough to overcome the outward current
of foreign charges above balanced ex-
port and import merchandise movement,
and turn the flow of gold this way. The
banks are seeing to it that none of this
gold shall find way into the Federal
Treasury; and the additional obligations
to Europe thereby created only 60 to in
crease the burden of annual foreign in
debtedness to be- settled by shipments of
the yellow metal
1t is thus only too plain that Uncle
must keep to his bed and re-employ the
present corps of doctors at rates calcu-
lated to cause him to writhe in pain, as
well as humiliation, or the banks must
resume their proper Office of supplying
gold on demand. Otherwise, the next
season of adverse trade balance, and
every such season thereafter, will
bring on an attack of the old com
plant in way not calculated to
promote financial stability and conf
dence. The best service the syndicate