The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1896-08-11

The consolidated statement of the ma
tional banks in Indiana, published in yes
terday's issue Of the Journal, showed that.
at the close of business July IA. 1896. they
held reserve of 34l5 per cent. The law re-
quires that the national banks of Indiana
hold where it can be available in the pay
ment Of their debtors fifteen per cent. Of
the money deposited with them. and their
outstanding notes or circulation. AT that
date the individual deposits OF those banks
aggregated 81. 1913. 30. the United States
deposits s1O0.3SS17. and their united out
standing circulation was "a. 704. 297. 50-a total
of s36.6i1, 40443 In round numbers 341k per
cent. of the amount was s12,64l.2s4. That
was the actual reserve of the banks at
that date. The lawful reserve would be
Is per cent. of the s3s 641. 404 or s.. 1876, 21O.
Deduct the lawful or required reserve from
the actual reserve and 1t appears that the
national banks OF Indiana held less than a
month ago s7.145,O74 money which they
could have loaned and would have been
glad to have loaned on good security. In
the State there is considerable number of
banks which do not do business under the
NJ tional system. but which being con-
servativcfy managed, adhere to the ma
tional requirements for reserve to re-
deem their liabilities. One of these banks
is one Of the largest in this city. and several
of them do large business. If they have
accumulated loanable funds in the same
ratio as have the national banks there cam
not be less than $1,000 600 of practically idle
money in the banks of this State which
could be In circulation If there was any
business in the country which would JUS
tify manufacturers and merchants invest
ing money in labor and merchandise.
Referring to the consolidated statements
OF the Indiana national banks in 1891 and
1892. it appears that their aggregate re-
serve was then down very near the require
ment of the law, so that the ten millions
of cash now in the vaults of the banks of
the State was in circulation. 1t was in
circulation because the weekly or monthly
pay rolls of hundreds and even thousands
of Industrial institutions called for at least
30 per cent. more money than at the
present time. The manufacturers could
get this money because they were able to
dispose of their products at a constant If
not a large profit. The s10.O0o0O0 of money
now idle and unremunerative in the banks
in active times would keep in circulation
an apparently much larger sum than these
figures represent. Paid out on Saturdays or
Mondays as wages. half of 1t would be in
the hands of grocers. marketmen and other
retailers in few hours. and the larger
part of it before another week could roll
around. Retailers would use 1t to pay
jobbers. and jobbers would deposit in the
banks to pay notes or increase deposits,
so that it would be ready to put in circu-
.ation again the next pay day. Thousands
of ii went into loan associations to pay for
shares and in turn was loaned for building
materials and labor In fact the handing
from person to person that ten millions of
dollars, now idle in the banks. settled fifty
millions of liabilities every month when
labor was employed and the merchandise
produced by labor could be sold. Locked
up in the vaults of the banks. it earns not
a cent for its owners and does nothing to
help business and industry.
1t can be added that if the money held
by the Indiana banks over the reserve
were 500, 600 instead of s10.00o.o00, money
would be just as scarce until confidence
shall return to business circles. enabling
manufacturers to place large orders and
merchants to sell large bills of goods to
retailers who can pay. The free-silver
craze has done much to destroy confidence.
and it will not return until it subsidies.