Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1897-01-14
MONETARY CONFERENCE.
Chief Cities Of the United States Rep
RESI- nted at Indianapolis.


Indianapolis, Jan. 13.-At the none
,ary conference Tuesday. there was a
large gathering, with speeches by Gov
Stannard, ex-Sec. Fairchild of New
York, John p. Irish of California, and
others
The committee on credentials re-
ported 270 delegates enrolled. represent
ing among others the trade and COM
mercial organizations Of Baltimore,
Chicago, Brooklyn. N. Y, Cincinnati
Cleveland, Detroit, Louisville, Milwau-
kee. Minneapolis, New York, Philadel-
phia, Rockland, Me-, Providence, r. l.,
st. Louis. st. Paul. Washington. d. c.
The committee on permanent organi-
cation recommended c. Stuart Patter-
son Of Pennsylvania, for president, and
a vice president from each state rep
resented. Evans Wooden of Indianap-
oils was named for permanent secre-
tary.
Mr.. Patterson was escorted to the
platform and addressed the conven-
ton.
The state delegations selected vice
| presidents and members of the COM
mittee on resolutions. The latter in
cluded. Maine, c. +. Libby.
Hon. j. II. Walker of Massachusetts.
chairman OF the House committee on
banking and currency in the present
| Congress, was invited to address the
convention, which he consented to do.
He said:
Before entering into the merits of the
question IL Is best for us to examine lit
lie of its elements. The first question Is:
What is "A bank OF loan and discount"
As understand it. II is corporation hav-
ing a certain amount OF capitalof its own
| and also of capital deposited in IL oy
other persons in the community in which
! il Is located. which those persons do not
need to use on that day both OF which
, those who do need it upon that day. but
do not need 1t all the year around. In
| every kind of business some bank becomes
"A limited partner In the business me
| profit OF the business which the bank re-
| ccives is in the form of the interest
charged on the loans and discounts MADE
by the bank to the business men. Banks
! can no more be taken out OF our clViiiza-
| ton today. than the heart and blood can
! be taken out of the human body ana
have IL still live.
/ Currency notes have come to be of very
great importance in banking. What Is a
currency note? Legally, or in form. 1t is
/ nothing different from an ordinary de-
mand note given by an Individual otner
than that custom compels the bank TO
deliver coin for the note instantly upon
demand. as the law requires every per
4 son, corporate sole. to deliver coin IN
! payment of every debt II requested to DO
! SO. Whatever money banks can make in
interest on such notes while in circuia-
4 tion reduces the interest necessary Tor
them to charge their customers, in order
TO pay good dividends on their stock Be
I fore 1860 all the paper money IN clrcuia-
ton was issued by state banks. IT Is very
, curious and interesting AZ well TO see
how widely 1t varied in different sections
/ in proportion to the loans and discounts
and the deposits of banks. and also to the
, specie held by them-its capital stock and
it's deposits. Remember that a currency
note paid out by bank Is identical.to the
man who owns IT. to d certificate OF de-
post TO him or a certified check. so that
the potential deposits in a bank are al
ways its nominal deposits plus the cur
rency notes ii actually has in circulation.
Furthermore. the percentage that the
bank can loan its funds below what II
would be able to loan them. had 1t no
right to issue Its currency notes. Is eX-
actly the percentage that the currency
note bears to such notes plus its deposits.
I In the period before 1860 the clrcula-
ton in the following agricultural states
was as follows: Indiana. 65 per cent to
its loans and discounts-today Is per
cent; Vermont. "a per cent-today Is per
gnia. II per cent; North Carolina. 50 per
cent-today. II per cent: and Georgia. 10
per cent-today. 10 per cent. OF course
issue I'm in cities where 1t is Immediately
returned to them is very small, and in
large manufacturing states it is compare
|
states is done by checks. In New York
city in 1860. the circulation was only per
cent. of it's loans and discounts: today, I
per cent. In the state Of Rhode Island
state of Massachusetts. 25 per cent-to-
day. 10 per cent. The circulation per capi-
ia is also very interesting. The currency
per capita before 1860 in Vermont was
$3.50; under the national system today 1t
is sl0.S4. In Virginia the circulation before
1860 was slO.S7; In Old Virginia today it is
n
lation before 1860 was $5.7s, and today it
is but sO.44. In Georgia before the war it
York city it was sIOS2 before the war. and
today it is SIZES. In Rhode island before
the war was 31.62. and today 1t is
s2@ In MASSACHUSETTS, :, II was "a ID SIP in De-
tice was done, the currency per capita IN
agricultural states. would be as high to-
| day as before 1860
| The great and only advantage that the
people derived under the national system
originally. was in making market for
the bonds of the government to some ex-
tent, but this even is disputed by some of
our best financiers. The sure and tangible
| advantages are:
First. Making the payment of currency
notes sure in the case of insolvent banks.
| which, of course,is of very great moment
but this can be surely done in better
| way.
Second. The official examination of the
bank by competent persons. which has
| been of greater advantage than is gener-
ally realized. Whlle the examinations 40
not prevent all bank failures. 1t Is rea-
sOnable to suppose that they are few as
| compared with what they would be We're
they subjected to no official examinations
and
Third The requirement that a proper
reserve shall be kept. proportional to the
individual deposits in the bank.
Requiring all banks to invest very
large part of their capital and sometimes
the whole of it. in bonds. in order to Sc
cure circulation. works great hardship
and injustice. The high interest locali-
ties of the South and West are justified
in their complaint of the national bank
ing law. Banks in that locality have an
equitable right to make a profit on the
currency issued in their localities equal
to the interest charged on loans and dis
counts. That is to say. the profits on cir
culation in the six per cent. localities
should be one-half more than in four per
cent. localities. In eight per cent. local
tiles twice as much, and in the ten per cent
localities twice and a half as much. while
the exact reverse is the fact. Again there
is constantly and needlessly locked up in
the United States treasury millions of
currency with other millions upon mil
lions of currency needlessly congested in
the city of New York and other cities.
Panics are also arising from a currency
famine. which is wholly inexcusable and
would be impossible under proper sys-
| fem of iSSnipp PapicC the