Clinch Valley news. [volume] (Jeffersonville, Va.) 18??-2019, 1896-08-14
AGAINST COMPETITION.

4
object to competition in their business
AT present the government furnishes
tho people with about one.third the
money necessary to trausnct the busi-
| ness of the country, aud the baults
furnish the other two thirds with their
crodit system. Tho matter of banks
loanina their credits, ana the evil re.
suits fromit nre generally understood.
as is shown by the coinage laws and
appendix of 1891, we Gud that ON II
certain dny in 1901 in banlss OF all
lsiuds the following:
Deposits. OBSERVATION-DISCLOSURES. ND Gso
Loans i,5dQ, ,sG2 s0i
Total OF NIL kinds OF money In cir
o"i"t'oh ''''''..'... ....,.....,.. i.'VdTli:S
The above proves we cannot take
bnnlt deposits as evidence of the amount
of money there Is In the country.
When we state thpt banks loan their
credit wo nre told that they loan their
deposits, and TINT banks soparntely and
rs whole have more dopo-,ts than
loans, which Is truo; but bank deposits
are ouo-third money and two tn irds In
debtedness, md thSre Is three times ns
much money subject to check and due
ON certificates of deposits ns there IL
money In the country. The method OF
depositing indebtedness In banks Is
very simple. farmer or merchant
has 81, l0J In bnnltablo notes; he sells
them toa bank for $1,000. Not wish
Ing To use tho money at TINT time he
leaves 1t In the bank. Now this mnn
did not tnko my money To or from the
| bank, In fnct there was no money used
In the transaction. Still the bnnls
books show $1,000 more in deposits and
! 81, 100 more In lonnS. One thing is
very apparent; IL NIL deposits were like
the one referred to-. banlts could not
mike my cash purchases OF notes
with deposits
lIy the above iignros we flnd the
banks nro loaning 81 III, O00, 600 more
money thnn thcro Is In tho country,
and that Ia counting that all OF tho
money In the country Ia In the bnnlss,
and thnt no money has Lccn lost or de-
stroycd which Ia not the cnac. II tho
volume of money was sufficient to
transact the busipcss of the country
wo would not neod bnnlis- The banls-
ors do not want the government to
furnish the people with II safe place TO
deposit and the necessary amount OF
money. They contend the pfosont /
amount of money, sl.I0O 701. .aid, Ia NIL
tho government should Issue. mud they
will furnish tho balance, 81. IN, ,OOO, 900,
with their credit syHtcn, nnd throw In
the pnnics II the louning OF deposits
was prohibited wo would not have
pnnics, and wo would not have TO pny
s200,ooO, 900 of interest annually "a
bankers for the use OF their credit
Banks on their credits alone every
nj ~ Z
at seven per cent. n sum cQual to the
entire amount of money In circulation.
and that only represents two-thirds OF
the total amount OF interest they col.
lcct.
Wo also find by tho coinngo laws
and appendix of iS0i the following:
Capital. national bnni;s. sSlI. 10 ,Oo1
Capital all oh0r banht........... 400 Oo7 .Oot
Ihnt between Mny nnd December
10, 1901 the nitionnl banks In
crelso thcir cash reserve. ........ 81. .tOl 900
Lost In deposits Observation-Disclosures. Ilo Ol1 oN
Contracted thoir lorGa ............. 2CQ,B W 600
Estimating NIL other banks, In pro-
portion To their capital, at the same
ratio the total amounts for nll banks
nrc as follows:
Increase their cash reserve i,.Tsl. or
Lost In dHpoats. ts..................... aI1SIIOn
Contrac'oh thoir loans. ........... .. I2D, ,33i ,OD
The banks did not ontract their
lonns, si20, 0OO, 900. in six months during
1893 because they did not want the In.
tcrcst, or because they were afraid they
would he paid with 5O-ccnt silver dol.
lars, for they were owing their depusi.
tors more than was due them on lonns,
and any monoy paid on loans could be
forced upon their depositors Tho con-
traction was To protect IA banking sys-
tenn bnsed on credits and confidence.
The banks controlling the credits and
the people the confidence.
IL should DO borne In mind that
, bnnlts are natural allies OF all monop.
olies and that stockholders In banks
are often stockholdcrs in other corpor.
ntions, trusts, railroads. etc. and they
get accommodations whom others can.
not.
In times Of business depression the
price of ofincrchandisc, produce and % Dor
decline. and interest should do the
: same, but by the use of bank credit we
have an elastic currency which onab b. es
banks TO mhinLain high and uniform
rate OF interest. AS Is shown by bank
lonns, 1t required nearly 81, 00o, 0Oo, 00t
to transact the business of the oountr,
in 1893 and about two thirds of tn,
amount was supplied by bank credit
, II the volume OF business should fal
below one-third of what IL was in / so3
the rate ofintercst will decline as ther,
will be dual money seeking invest
) ment, but the rate of interest will no
decline ms long as there is any banl
; credit in use as the supply will Jus
equal the demand. a failure in Phila
RI al .t.s Il
to market with his stock, or cause tn
merchant in Michigan TO fail for TIN
want of a small loan. In the scramble
that follows each scare, merchandise
produce and labor are thrown on tn,
market for what they will bring.
Banks have much TO lose by panics
and try to prevent them by assisting
each other, hut they will not give nj
their system of flonning credits on whici
they collect 5000 0Oo. 900 OF interest an
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