The Cook County herald. [volume] (Grand Marais, Minn.) 1893-1909, 1896-09-05
AGAINST COMPETITION.
An Iowa Writer Tells Why Bankers Dppos
the Free Coinage OF silyer-The Rem


At present the government furnishes
the people with about one-third the
money necessary to transact the bust
ness OF the country, and the banks
furnish the other tWo-thirds with their,
credit system. The matter Of banks
loaningg 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 a
certain day in 1893 in banks Of all
kinds the following: sssss
,84S, 879, $50
Loans 4769,s6s495
Total OF all kinds of money in Cir
cuIaelon 500, 701 245
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 as
much money subject to check and due
on certificates of deposits as there is
money in the county, The method of
depositing indebtedness in banks is
very simple. A farmer or merchant
has 81, 100 in bankable notes; he sells
them to a bank for s., 900. Not wish
ing to use the money at that time he
leaves it in the bank. i 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 loaning $3,177, 100000 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. If 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, $1,59e, 7o1, 245, is all
the government should issue, and they
will furnish the balance, So, III, 900, 600,
with their credit system, and throw in
the panics. If the loaning of deposits
was prohibited we would not have
panics, and we would not have to pay
$200,OoO,0o0 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. a 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. sss 49, at>s:ass
4 We also find by the coinage laws
and appendix of 1894 the following: -
Capital, national banks .......... 1881 300, 1000
Capital all other banks. zoe, 007, 900
That between May 4 and December
J. 49,, 1893, the national banks in
= creased their cash reserve. 91,49o 900
Lost il deposits. .............. 132, 900 900
Contracted their loans. ............. 269 300 900
=: Estimating all other banks, in pro-
portion to their capital, at the same
ratio the total amounts for all banks
are as follows: ~ s*.=. sssss,is ar:5sa! '7
Increase their cash reserve 81 45 1888 900
Lost IN deposits. 2iO,540, 600
Contracted their loans. ........... AIS, 531 900
The banks did not contract their
loans, $429, 900, 0o0, in six months during
1898 because they did not want the in
terest, or because they were afraid they
would be paid with 50-cent silver dol
lars, for they were 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 to protect a banking sys-
tenn based on credits and confidence
The banks controlling the credits and
the people the confidence. ~
It should be borne in mind that
olies and that stockholders In banks
are often stockholders in other corpor-
ations, trusts, railroads, ETC., ard they
get accommodations when others can
not. =.
In times of business depression the
price of merchandise, produce and La Dor
decline, and interest should do the
same, but by the use of bank credit we
have an elastic currency which enables
banks to maintain high and uniform
rate of interest. As is shown by bank
loans, it required nearly SIS, 900, 600, 900
to transact the business Of the country
in 1898 and about two-thirds Of the
amount was supplied by bank credit
f 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 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 a small loan. In the scramble
that follows each scare, merchandise,
produce and labor are thrown on the
market for what they will bring.
A Dog with Artificial Teeth.
Tits said that a dog in Mulliken, Mich,
possesses and uses daily a full set of
artificial teeth. The dog is very old, and
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