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

ness OF the country, and the banks
furnish the other two-thirtls with their
credit system. The matter of banks
loaning their credits. ana the evil re-
suits from IL are generally understood.
As rs shown 10y the coinage laws and
appendix of 1894, we find that on n
certain day in 1909 in banks of all
kinds the following:
'"poS'tS isissso. $50
Loans. ........... A y,a $40 "a,
l"tal OF NIL kin Is OF money Ia cir
o"soton .-...-. ...........- t.'OASli.e4S
The above proves we cannot take
bank deposits as evidence of the amount
OF money there is in the country.
When we state that banks loan their
credit wo are told that they loan their
deposits, and that banks separately and
as whole have more deposits than
loans which Is truN; but bank deposits
are oue-third money and two thirds In
debtedness, and there Is three times ns
much money subject to check and due
on certificates of deposits as there IL
money in the country. The method OF
depositiug Indebtedness In banks is
very simple. A farmer or merchant
has i,lO) in banlSable notes; he sells
them TO "A bank 70. $1,000 Not wish
leaves IL i'm the bank. Now this mnn
dad not take any money To or from the
bank, In fact there was no money used
In the transaction. Still the bank
books show $1,000 more in deposits and
81. 100 more In loans. One thing is
very apparent; IL all deposits were like
the one referred TO. banks could not
make any cash purchases Of notes
with deposits
Ry the above figures we 0nd the
banks arc loaning 81 III, 600 600 more
money than thero Is Ia the country.
and that Ia counting that all of the
money In the country Is iu the banlSs.
and that no money has Teen lost or de-
stroyed which In not the case. II the
volume OF money was sufficient TO
transact the busincss OF the country
we would not neod banks The banlt-
ers do not want the government to
furnish the people with IA safe place to
deposit and the necessary amount OF
money. They contend the present
amount of money, 81. 800. 7Ol. 2Ia. IA all
the government should issue. and they
will furnish the balance. 81. l77. 600. OOO.
with their credit systenl, and throw i'm
the panics II the loaning OF deposits
was prohibited wo would not hnve
pnnics, and we would not have To pav
5000 600 OF interest annually 10
bankers for the use OF their credit
Banks on their credits alono every
eight years are collecting ia interest
AT seven per cent n sum equal to the
entire amount of money In circulation.
and that only represents two-thirds of
the total amount OF interest they col.
lect
We also find 10y tho coinage laws
and appendix OF 1891 the following:
Capital national bani.s. .......... f6ll 10 OD1
= Capital all o hnr banss............ iOO.OO7 Oo0
That between May ana Dcccmbor
49, 1901 the nltional banks In
creisci their cash rcserVc......... o. tOi 900
Lost In deposits ................ Ias o11 on
contracted tAcir lor1s...,.......... gCgs y W 900
Estimating all other banks. In pro-
portion TO their capital. at the same
ratio the total amounts for all banks
are as follows:
Increase their cash reserve ...... Al a. ss1 O)o
Lost In deposits ...... ...... aia,pop
contractor thoir loans. ........... . I2g ass 90
The banks did not ontract their
loans, Si20, OO0 OO0. In six months during
1893 because they did not want the IA.
terest, or because they were afraid thev
/
lars, for they werc owing their deposi.
tors more than was due them on loans,
and any money paid on loans could be
forced upon their depositors The con-
traction was 10 protect IA banking svs-
tenn based on credits and condolences
The banks controlling the credits and
the people the confidence.
IL should bo borne In mind that
banks are natural allies of all monop-
oiies and that stockholders In banks
are often stockholders In other corpor.
ations, trusts, railroads, etc. aud they
get accommodations whom others can
not.
In times OF business depression the
price OF merchandise. produce and a Dor
decline. and interest should do the
same, but by the use of bank credit we
have an elastic currency which ennb. es
banks 10 inLain high and uniform
rate OF interest. AS is shown by bank
loans, 1t required nearly s.. OO0. OO0. 900
TO transact the business OF the country
in 1893 and about two thirds of the
amount was supplied by bank credi..
II the volume OF business should fall
below one-third of what il was in 1893.
the rate ofintercst will decline as there
Will be dual money seeking invest
ment, but the rate of interest will not
decline as long as there is any bank
credit in use as the supply will just
equal the demand. a failure in Phila-
delphia may start the Kansas farmer
TO market with his stock, or cause the
merchant in Michigan to fail for the
want of small loan. Ia the scramble
that follows each scare, merchandise
produce and labor are thrown on the
market for what they will bring.
Banks have much 10 lose by panics.
and try to prevent them by assisting
each other, but they will not give up
their system Of loaning credits ON which
they collect 500. .O0o, 600 of interest an
nually, as it is the greatest scheme on
earth 10 get something for nothing.
and on which they even object to paw
an income tax. This system of bank
credit and deposits is the cause of
panics, and is the endless chain that
closes the factory door, stops public
and private improvement. opens the
grannry door and leads the live stocl<
TO market by the custom of peoDlo
depositing money in banks. tho bani,s