Iron County register. [volume] (Ironton, Iron County, Mo.) 1867-1965, 1896-05-28
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AGAINST COMPETITION.

In lows Writer Tells Why Bankers Opposs
thu Free coinage Of sllver-The Rom
cdr.
Bankers oppose the free coinage Of
silver for the same reason that all men
object to competition in their business
At present the government furnishes
the people with about one-third the
money necessary to transact the bush
ness of the country, and the banks
furnish the other two-thirds with their
credit system. The matter Of banks
loaning their credits. and the evil re-
suits from it are generally understood.
As is shown by the coinage laws and
appendix of 1894, we find that on 9
certain day in 1898 in banks OF all
kinds the following:
Deposits ,o4s so $50
Total Of all kinds OF money In cir
culaelon I.oSo,fVt.SsO
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 we are told that they loan their
deposits, and that banks separately and
as whole have more deposits than
loans, which is true; but bank deposits
are one-third money and two-thirds in
debtedness, and there is three times MS
much money subject to check and due
on certificates of deposits as there is
money in the country. The method of
depositing Indebtedness in banks is
very simple. A farmer or merchant
has 81, 100 in bankable notes; he sells
them to bank for $1,000. Not wish
ing to use the money at that time he
leaves it in the bank. Now this man
did not take any money to or from the
bank, in fact there was no money used
in the transaction. Still the bank
books show 81, 900 more in deposits and
81, 100 more in loans. One thing is
very apparent; if all deposits were like
the one referred to, banks could not
make any cash purchases of notes
with deposits.
BY the above figures we find the
banks are 1oaning So, 1T, OO0, 900 more
money than there is in the country,
and that is counting that all OF the
money in the country is in the banks,
and that no money has been lost or de-
stroyed which is not the case. II the
volume Of money was sufficient to
transact the business of the country
we would not need banks The bank
ers do not want the government to
furnish the people with a safe place to
deposit and the necessary amount Of
money. They contend the present
amount of money, 81, 500, 701, 245, is all
the government should issue, and they
will furnish the balance, IS, IT, 900, 600,
with their credit system, and throw in
the panics. If the 1oaning of deposits
was prohibited we would not have
panics, and we would not have to pay
$500, 600, 900 of interest annually to
bankers for the use of their credit
Banks on their credits alone every
eight years are collecting in interest
at seven per cent. sum equal to the
entire amount of money in circulation,
and that only represents two-thirds of
the total amount of interest they coll
lect.
We also find by the coinage laws
and appendix of 1894 the following:
Capital, national banks 1851 800 900
Capital all other banks. 408,OO7.O0O
That between May and December
10, 1893. the national banks in
creased their cash reserve. 81 .4O9 600
Lost In deposits lS2,O0OOOu
Contracted their loans. ........... 1890 ,0OO
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. ,783 .o)0
Lost in deposits. 2l0,5i0,0W
Contracted their loans 429,S3l,O N
The banks did not contract their
loans, S429, 600. 900, in six months during
1898 because they did not want the in
terest, or because they were afraid they
| would be paid with 5O-cent silver dol
lars, for they were owing their deposit
| tors more than was due them on loans,
and any money paid on loans could be
forced upon their depositors. The con
| traction was to protect banking sys
tenn based on credits and confidence.
The banks controlling the credits and
the people the confidence.
It should be borne in mind thai
banks are natural allies Of all monop
olies and that stockholders in banks
are often stockholders in other corpor
atoms, trusts, railroads, ETC., and they
get accommodations when others can
not.
In times of business depression the
price of merchandise, produce and labor
decline. and interest should do the
same. bat by the use of bank credit we
have an elastic currency which enables
banks to maintain a high and uniform
rate of interest. As is shown by bank
loans, it required nearly $1,000, 600. 0O(
to transact the business of the country
IN 1895 and about two-thirds OF the
amount was supplied by bank credit.
If the volume of business should fall
below one-third of what it was in 1898
the rate of interest will decline as there
will be dual money seeking invest
ment, but the rate of interest will no,
decline as long as there is any bank
credit in use az the supDly will just
equal the demand A failure in Phila
delphia may start the Kansas farme,
to market with his stock, or cause the
merchant in Michigan to fail for thu
want of small loan. In the scramble
that follows each scare, merchandise
produce and labor are thrown on the
market for what they will bring.
Banks have much to lose by panics
and try to prevent them by assisting
each other, but they will not give NJ
| their system of loaning credits on which
they collect $500. 900, 600 of interest an
nually, as /. is the greatest scheme OF
earth to get something for nothing
and on which they even object to pay