The representative. [volume] (St. Paul, Minn.) 1893-1901, 1896-05-27
F9LLqCYauSWERED
SAVINGS FUNDS AND THEIR
DEPOSITORS.
Bimetallism Will Not Endanger
Savings or lnjure the Saw
ings Depositor.
Free Coinage and Good Times are
Good For Workmen and
Savings.
PHILADELPHIA American)

WI 61CdC otOCh anu lIdue arguments
of the gold contractionists which they are
using in and out Of season, are 1, that the
opening Of our mints to silver would rob
every wage Garner by obliging him to ac-
cept 50cent dollar in payment for his
labor; and 2, that the Saving of the
poor, as represented by deposits in the
savings funds, and for the safety of
which the gold contractionists have sud-
denly shown so much concern, would be
cut in half, should we return to bimetal-
lism. We have referred, at length, in
former editorial, to the first and alb
surd contention of the gold-monometal-
lists that the free coinage of silver would
reduce the purchasing power of the wage
Garner.
But how about the savings of the wage
earning classes. Would they be cut in
half by opening our mintS to silver?
We answer assuredly they would not
The deposits in the saving funds of the
United States amount to upwards of ST.
800,O00,00O, divided among over four and
three-Quarter million Of depositors.
Would these deposits be jeopardized by
return to bimetallism? Not in the least
On the contrary. the appreciating gold
standard which is sapping the prosperity
of the country, must, if persisted in inev-
itably result in entailing great losses on
the depositors of savings funds, for as
profits are reduced and those to whom
the savings funds have loaned the mon
ey entrusted to their care, fail to earn
and are unable to pay the interest on
or to pay the loans the ability of the saw
ings funds to pay interest to their de-
positors will be curtailed and the value
of the securities on which they must de-
pend to repay depositors destroyed.
Yet fe,l days since we fri an officer
of one of Philadelphia's leading savings
funds and an ardent advocate of the gold
standard, Mr.. G. Stuart Patterson, ad-
dressing the students Of the Lehigh Uni
versity in these words: Here and every
where. now and at all times, | shall
raise my voice in protest against any pol
icy which will tend to diminish the just
wages of workingmen or to lessen the
value of securities in which their saw
ings are invested" On these grounds he
urged the maintenance Of the gold STAN
dard, but what can more certainly re-
suit in diminishing the value of the Sc
curities in which the savings funds have
invested the savings Of wage earners en-
trusted to their care than an approaching
dollar, and what will more certainly re-
suit in reducing the rate of interest that
savings funds can earn for and therefore
afford to pay such depositors?
The value of the securities which the
savings funds hold, whether railroad
bonds, or farm mortgages, or mortgages
on improved city real estate, depends up
on the ability of the railroads issuing the
bonds, of the farmer or builder execut
ing a mortgage, to earn and pay the in
terest thereon. The greater the earnings
of railroad or farmer and the greater the
excess Of earnings in excess of interest
charges, the more secure is the payment
of such interest and consequently the
more valuable and the more readily sala-
BILE the security, whether 1t be railroad
bond or other mortgage. Nothing cuts
into the profits of industry so much as
falling prices, and consequently nothing
so impairs values so reduces the ability
of producers mortgaging their property
to earn and pay interest, SO rapidly alb
serbs the margin of profit over and above
interest charges, and thus so certainly
impairs the value of securities and mort
cages as falling prices.
Falling prices have so eaten into the
profits of farming, that farmers who
have mortgaged their farms, have found
it impossible to earn and pay the inter-
est, and the savings funds that have in
vested large part of the funds entrusted
to them in such mortgages, have found
by bitter experience, and to the cost Of
their depOSitors, that an appreciating dol
lar does not, in the long rum rebound to
their advantage or add to the value of
their securities In such cases the saw
ings funds have foreclosed the mortgages
on the farms, they have come into pos
session of the property, but farming be-
ing improbable. they have been unable
to sell the farms and thus realize on the
security, they have been unable to make
the farms yield them any return, and
they have been, in many cases, obliged to
make an outlay 70 pay the taxes and
thus keep the title clear on a property
that was once valuable, but which, as
money has appreciated and prices have
fallen. has since become valueless.
And as falling prices make production
improbable and thus bring about cur
tailed production, the demand for trans
portation services falls off with falling
prices, and thus we find that falling
prices eat in to the profits Of railroads,
eat into their ability to earn and pay in
terest, and thus impair the value Of their
securities. So it is not surprising that
we find that of the capital stock of our
railroads amounting to $4,S34 ,075, $50 on
June 80, 1894, as stated in the report of
the interstate commerce commission for
1895, $3,O66, ,150,094 or over GO per cent
received no return, no dividend whatso-
ever, and that of the $4,593 ,931,754 of
mortgage bonds issued, interest was in
default ON $3.50. .573.789. or nearly Is per