The citizen. (Frederick City, Md.) 1895-1923, 1897-02-19
PANIC IN THE WEST.
People Compelled to Barter Com.
modities - Very Little Money
in Circulation and Banks
Fail by the Score.

The other day, says the New York
| Journal, at meeting of the Chamber
of Commerce, called 10 discuss the
Greater New York Charter and also
| the currency situation, one of the
members, himself a strong gold stand
/ ard advocate, startled those present by
saying that the South and West were
suffering from currency famine, and
that large sections of that country,
prosperous so far as productivity was
concerned, was really reduced to a
slate of barter, there being literally no
money at all in circulation.
This was no news to many of the more
observant readers of the Journal
though it was news to a great many of
the members of the Chamber of Com
merce.
The real confirmation of this news,
however, consists of the persistent and
continual failure of banks of deposit
in different parts of the United States.
These failures are caused principally
by the withdrawal of funds on the
part of depositors. and this in turn
usually means nothing more or less
than shrinkage in the volume of
money in the neighborhood; for in any
thing like healthy condition of af-
fairs the withdrawal of actual curren-
by by one man in neighborhood
merely means its return 10 bank by
another man. The trouble now-a-
days is that it is drawn off to another
section of the country or to Europe,
and much of it does not return. The
wealth is in these communities as it
was before. They could get along
with some sort of comfort outside of
paying interest and fixed charges, if
the habit of exchanging goods among
themselves only on a cash or credit
basis and not by barter were not so
firmly fixed. Doubtless if this con-
tinues for a considerable period they
will Outgr0w this uncomfortable habit
of employing money in exchange.
Charles Stewart Smith, au ex.presi-
dent of the Chamber of Commerce.
was one of the gentlemen in attendance
at the meeting. Speaking of the panic
of 1858 on another occasion Mr.. Smith
said: About everything was involved
except the building and loan associa-
lions, which pursued the even tenor of
their way almost unchanged, paying
Withdrawals promptly, accommodate
ing shareholders with short-time loans.
and, in addition, loaning heavily on
realty, making for themselves a record
UNSURPASSED, and one which should
put them in the front rank of financial
institutions. One reason why build
ing and loan associations Were not in
VolVed was that money in their hands
was considered To be an Investment
aud not deposit 1t is, therefore, sig
nificant of the straits to which the peo-
pie are being put for want of currency
that since these words were spoken
large building and loan associations
have also been following one another
into bankruptcy in different parts of
the country. They have teen driven
to il by the withdrawal of large sums
of money taken from the largest and
strongest of them simply because the
investors had no other means of COM
manding actual currency. The South
ern Mutual Building and Loan Asso-
citation, of Knoxville, which failed the
other day, was over $500, 600 behind in
the pay rent of these Withdrawals, and
another, the Southern Mutual, of At
lanta, more than Sl25, 200 behind. In
Chicago and the Middle West SINH
lar condition of affairs exists and has
existed for a long time. No matter
what the ultimate realizabIe value of
securities is, whenever too many peo-
pie demand their money from bank
or building aud loan association at one
time, it can be carried down. They are
now demanding their money simply
because they must have money aud
can command it certainly in no other
way. This means currency famine.