The representative. [volume] (St. Paul, Minn.) 1893-1901, 1896-05-13
STRONG POINTS WELL PUT.
E. Gerry Browns Discussion Of
Money at New England
Town Meeting.
A REMARKABLE LITTLE BOOK.
CONTINUED from last week.l
CHAPTER VIII.

CONTINUED from last week.
CHAPTER VIII.
statistics are dry at the BEST" said the
editor, .and in the limited tine this eve
ming it would be impossible to present the
full enormity of the offence Bank credit is
cheap to those who make it; but expensive
to those who use it, and productive industry
pays the bill. 1t is the productive power
of the people that has paid for the stately
banking edifices, and contributed the vast
fortunes which have been accumulated in
the banking business. have already shown
that the bank loans credit-not money. The
use Of money and the use Of credit are COM
pletely COMPOUNDED in banking operations;
but the loan Of credit Is the main source OF
profit, and the dangerous concentration of
wealth and power is effected by its USE A
bank loan is an exchange Of the credit Of
the merchant and his indorser for the credit
of the bank. The Loans apd Discounts
represent the amount which the banks owe
to the business men. The Loans are paya-
BILE at the banks at certain stated times; the
Deposits are payable by the banks on de-
mand. This swapping of Credits in the
absence of sufficient volume of legal ten
der money is the instrument which necessi-
ty has invented to effect the exchange, or
distribution, of labor's product With this
preliminary explanation, examine the rec
ord of national banks, and trace the rapidity
with which their credit absorbed the actual
money
I'm 1864, the Loans were $93, 238 ,657.92;
deposits, S122, 166 ,536.4O. The difference
this year is in favor of the business end;
which has $28,926, S78.47 more than it's debt
to the banks
1856. Loans, s4S7, ITO, 1876. 40; deposits,
$500, $40, 873.22; the difference in favor of
the business end has decreased to $13, 74O,-
1864. The credit or wind absorbed over
fifteen million this year. 1t is the last year
that the banks owed the business men more
than the business men owed the banks
1855. Loans, 5000 ,314, 7O4.S3; deposits,
1854 SIG, 777.64. The difference is now in
favor Of the banks, $38,697 ,927.19. The
wind drawing interest rises to over three
hundred millions.
1857. Loans, $6O9, 675 ,214.61; dis
counts, $40, 797, S37.51. Difference in favor
of the banks increases another thirty NIL
lion. A great financial crash in England
came in 1866; but our instrument for do
nestle exchange was paper; and some thirty
million gold went to the Bank of England,
with no other effect than to impose slight
check on the expansion of credit.
1853. Loans, 1857 1858, S47.83; deposits,
$3.50, $40, 82O.S5; difference, $76,728, O269S.
1859. Loans, 1852 1888, 1861; deposits,
$511 400, 1868; difference $171, 482, 910.-
"a. The wind drawing interest has
grown fat on itself and risen to over four
hundred millions.
1870. Loans, $725, 515, 1898. 40; deposits,
$507 1868, ,618.67; difference, $218 148 3D.
h1v,, - Sxr,s,, n
drew interest this year.. The business
it's debt with additional debt.
1871. Loans, 1913 1896, 31194; deposits,
1896, 5S6, 1874; difference, 1922, 400, S242O.
1872. Loans, 885 ,653, 1852; deposits
$568, ia, 679.26. The contraction of the
volume of legal money and the expansion
of bank credit commence to yield their
legitimate results. Business failures
this year. 4,069 in number, and $121 1885,
900 in volume. This want of confidence
reduces the bank loans by about eighty
eight million between September, 1873,
and December, which is the month of the
year in which all my figures are taken.
'1S73. Loans, 1856, 816, 555 05; deposits,
$540, 511 ,6O2.78; difference $316305, 953-
II. This contraction Of eighty eight mil
lion, or about one-tenth, in the volume Of
instruments, serving as money tools, pro-
duces in 1873 crop Of failures. With an
additional want of confidence appears
the symptoms of the disease known as
'panic;;' which is a case of financial collie
produced by diarrhoea of credit and a
superabundance of wind 5,183 failures
figure $228, 499, 900 in volume. Merchants
were paying IL, Is, Is, and "a per cent
per annum for money with which to meet
their obligations. Bank credit had
hurled them into debt; and money only
could get them out of it. Sept. 10, 1873,
Jay Cooke suspended; and, in few days,
the national banks closed their doors in
their inability to pay the checks of their
depOs.tors. There was not money to
meet every check that was drawn about
that time. Clearing House Loan Certificates
were brought into existence to increase
the volume of instruments that could I'm
wind the debt tangle that had been Gre
ated by credit
1874. Loans, $685., 1862, 5S0.21; deposits,
$685., SAG, 607.45. The increase in loans
checks failures, which are $3.50 in num-
Der, and s155,239, 900 in volume
''1S75. Loans, 1862, ,SO7 80; deposits,
$61S, 517 ,245.45; difference ,$343,954 ,562.-
45. Failures, 7,740; amount, $2O1 ,OOO,-
600.
"1S76.Loans, $929,O66, 40s.42; deposits,
$619, 1850, 22306; contraction in loans and
business failures continue; labor troubles
prevail; wages are falling, and men out
of work. Failures, 1902 in number. and
$191, III, 900 in volume.
1877. Loans, 1881, 1856, 744.S7; deposits
$500, 3D. 14.52. Failures, 8,872; volume.
$3.50, $685. 1876. The people discuss the
money question, and talk more money.
1873. Further increase in loans to
1926, ASST; deposits, $598, 8O5, 775. So:
difference in favor of the banks, $227. 211,-
676.31. Failures increase to 1O.478 in
number, and 1924, 383, 132 In volume. The
Bland-Allison Silver Act passes, and Gre
ates an additional source Of money which
shows an immediate effect. Government
buys silver to the amount of not less than
two million dollars per month, and not
more than four million dollars per
month, and coins in. into dollars 412h
grains $40 fine, which are made full legal
tender for everything unless otherwise
stipulated in contract. Holders of these
silver dollars may deposit them in the
treasury, and obtain silver certificates.
1879. Business revives. Loans jump to
1898 ,543, 661.9 and deposits $755, 459 .966 OF.
Failures decrease in number and amount.
Difference between deposits and loans.
$178 ,O83, 1854. More money relps the
business men to cancel their indebted
ness to the banks. Rising prices, caused
by the increase in the money volume, at
tract foreign investments. Gold COM
mences to flow into the country.