Hutchinson gazette. [volume] (Hutchinson, Kan.) 1895-1902, 1897-03-18
A PROBLEM In BANKING.
BANK DEPOSITS GREATER THAN
TOTAL CIRCULATION.
The. Establishment Of Government BAnkA
in Every County sOAt and City Would
Abolish this Gigantlc tswIndlIng Scheme
and Confidence Game, IntSrSSt ter
$4,000 ON $4,000 ~

4; FlDENCE,"
Such is the constant and vociferous
quawk of the every nation bank parrot
and paroquite. Let us study out the
wherefore. Thirty-one years ago the
people had $65. so per head of money
in circulation among them. Prices Of
property and labor were higher, or, in
other words, money was cheap. Money
sought opportunity for Investment.
Business was done for the cash.
There was a less per cent of credit
business than ever known before.
Confidence was never thought of in
business transactions. Having plenty
of cash, people had no need of conf
dence.
Today we have aboutSSl per capita
counting national bank bills as money
and the volume so reduced sea tcely
circulates at all.
Now only per cent Of our business
exchanges is made with cash; the
other 81 per cent is done with bank
checks, drafts and other forms of
credit that pass well enough as long
as there is confidence currency.
1t is aromatic that given amount
of business exchanges requires a given
amount of money, or something to take
the place OF money, therefore the less
actual money the more room for the
banker with his confidence stuff.
Hence they demand the retirement of
the greenbacks and silver to give room
for their bank script, and they ask us
to have confidence that they will fur
nish us with a proper amount OF
money.
But It is as custodians of other peo-
ple's money that they are now calling
for confidence most imploringly.
A few months ago noticed state
ment of deposits and loans of other
peoples money on given day as
shown by the books of all the'-banks,
and they were in round numbers as
follows;
Deposits subject to check and draft,
IS, $50, 100000 loans. $3,95O,O 900, 900.
But we know that an the money in the
United States including national
bank bills, does not exceed $1,000, 00O,-
600, and that if the banks had every
dollar of this in their vaults they could
not pay their depositors 80 cents on the
dollar. >.
How is it possible that people can
hold certificates showing deposits in
the banks of more than three times as
much money as there is in the United
States? 1t occurs in this way; A
sells piece of property for $4,000,
and having no immediate use for the
money, he deposits it in the bank and
takes certificate OF deposite. b is
about to make u trade in which hewili
need $4,000 ready cash. In order to
have that amount where he can lay
his hands on it when he wants it, he
borrows from the bank this $4,000
tLat A has deposited, and gives the
bank his note bearing 10 per cent in
terest, and leaves the money in tho
bank, taking certificate showing
that he has $40, 900 on deposite in that
bank.
In like manner c, ID, Z and +, in
turn borrow of the bank this sameSlO,-
900 and leave it there subject to their
checks. The result is that this $4,000
is made to show on the bank books as
follows:
Deposits, SIC, 600; loans, $4,000. And
the bank is drawing interest at the
rate of 10 per cent per annum on the
notes Of Il, c, o, E and f, for $4,000
each, making in aggregate of so per
cent interest on AS 500 thus loaned
out again.
AS long as the public have "conh-
dence" enough suckers will be making
deposits in the bank to meet the with
drawals, and the banker floats on the
currant like man jumping from one
piece of floating ice to another. But
IL lack of confidence comes, the suck
ers cease to put in their deposits, there
are no more floating pieces Of ice to
Jump to, and the banker goes under,
as they are now loing at the rate Of
five per day. Hence this vociferous
''confidence" hawk of the trained
birds.
Freeman Of America. Let us abol-
ish this swindling confidence game as
we have outlawed other swindling de-
vices. Let us again provide ourselves
with the nations money of ample
amount to make our exchanges in cash
as we did 81 years ago. Let us also
establish Uncle Sans bank in every
county seat and city to securely keep
onrdeposits and furnish our exchanges;
q bank that shall at all times keep
every depositors money subject to his
order and to other wise appropriate or
dispose of.-JOhn II. Cherry in Chicago
Express.