The labor world. [volume] (Duluth, Minn.) 1896-current, 1898-09-10
NhV the Bottom Fell Ont.

III uJ tHU OuttOM U11 Out' III
You want to know the reason why the
immense decrease in the value of real
estate and other properties in the past
five years. We propose to tell you.
The comptroller of the United States
treasury tells US that the deposits in
banks shrunk over four hundred millions
of dollars in the months of June and
July Of 1898. Why that immense shrink
age of deposits? Because people with
drew their money from the banks
through fear that they would lose it if
they allowed it to remain there longer.
Why this fear? Because banks were
failing. Why failing? Because people
had so lost confidence in them that de-
positors wanted their money and the
banks couldn't pay it. The inability to
pay back to the people what they had
put into the bank constituted failure:
Then when the banks began to fail in
great rapidity and millions Of dollars
were lost in them the people became
panic stricken. Through fear of some
impending calamity they hid every dol
lar they could get. People would not
pay debts; they would not part with a
cent. Then when people could not get
money they were willing to sacrifice
property in order to get it, and down,
down went prices, men being anxious to
sell at any price to get money.
What became of the four hundred
millions of dollars that the people took
out of the banks? It was simply hidden.
It was in existence of course but secreted
and out of circulation.
Thai is what is the trouble with our
finances large share of the time; in
fact all the time. The people, through
great losses in banks and sad experience
have become so suspicious Of banks that
they will not trust them; they will not
use them and consequently they hide
their money to such extent that COM
paratively very little circulates.
1t is true that after financial storm
blows over, some people forget their dan.
gers and bring their money back to the
banks. But after general business has
been killed and great loss sustained in
nearly every business by financial panic
nobody wants to borrow the money
from the bank and start enterprises
again for sometime, and idle money is
thus liable to become over abundant.
With a surplus Of idle money in the
bank the banker is anxious to have
somebody borrow it that he may get in
terest. Consequently he reports money
abundant and interest low. But let
conditions arise whereby considerable
money is wanted so that people borrow
readily and the bankers will combine
and strike" for more interest. This is
just as straight strike as when the car
penters strike for ten cents more day
and won't work unless they get that
additional ten cents. So the bankers
wont lend money unless the borrower
will pay the additional interest. A great
tirade of abuse is heaped on unions by
the newspapers, and noise made about
the carpenters strike but not a word
about the bankers strike.
The majority of people, after a series
Of bank failures, never bring their money
back to the bank. The records show
that the government has coined several
hundred millions of dollars in gold that
the government has now no knowledge
of. Where have the hundreds Of millions
gone to that is unaccounted for? After
allowing for a certain amount which
has gone into the arts it leaves several
hundred millions which are hidden in
safety deposit drawers, safes, farmers
cellars and other hiding places.
And what is true of gold is equally
true of silver and paper. They are hid
den in the same proportion. What folly
therefore to claim that more silver-free
silver would remedy financial evils when
all the silver family could get hold Of
in time Of financial panic. would be
placed in tin box and buried as sure az
the owner could get hold Of a spade and
there was hiding spot in which it could
be concealed.
Suppose we had ten times more silver
than we have; what would be the result
when banks began to fail? 1t would 60
out of sight like shot out of gun.
What became of all the silver in 1898
when banks we're failing? In 1892 there
were eight dollars per person of silver in