Little Falls herald. [volume] (Little Falls, Morrison County, Minn.) 1889-1950, 1898-01-07
! The DREAM IS FADING.

The DREAM IS FADING.
Hope Of Renewed Prosperity
Passing Away.
The EXPLANATION rs SIMPLE.
Money Il Growing More Valuable and
Other Things Depreciating "A Plain
Proposition For Bankers-TheyD Do Not
Deal In Money, but In Its Use. q
The conditions of which our local
bankers complain are not peculiar to
Detroit, says The. News of that city.
They have been compelled to lower the
interest they pay depositors for the
simple reason that they cannot lend the
stuff out again at a profit on the old
rates. It is the same all over the coun-
ry-nay, all over the world wherever
the gold standard prevails. There is an
--ooumulating of cash in all the Faults
from ocean to ocean. The tanks are
full, the government treasury is full.
In ordinary times an accumulation of
5000, 900, 900 in the government treas
ury would make dangerous stringen-
cy. It is now quite unnoticed in fnan-
cial circles. In spite Of the vast hoard
the banks, too, have more than they
can find any profitable and safe use for,
and it is constantly increasing, even coin
cidently with a diminishing interest
rate. Nobody wants to borrow it except
poor devils who can show no solid Sc
curity that they will pay it back again,
and they, of course, cannot get it.. That
is what ails the banks, and that is what
ails the money which they are piling
up in spite of themselves.
Most Of the bankers, even those who
pretend to some intelligence and read
papers at their annual meetings, make
the mistake Of imagining that they deal
in money. Nothing could be more erro-
neous What they do is to borrow and
lend it. They deal in it's use, not in the
thing itself. The two are radically diff
ferent. If they were dealing in the
thing itself, they would not lend it.
They would buy it when it was cheap
and sell it when it had advanced in val
ne. They would trade it for something
else. That would be dealing in money.
Other people deal in money; bankers
deal in it's use. This error has made the
bankers generally believe that it is to
their advantage to have.the currency of
the country enhance in value-that is
to say, increase in purchasing power.
As dealers'in it's use they have precisely
the same interest in it's value as others.
The value of it's use, within rational
limits, is in inverse ratio to the value
of the thing itself.
If bankers could only get this simple
proposition through their heads, they
would not all be goldbugs. They have
had their way thus far in this country.
They insisted on standard which
makes every dollar increase in actual
value as measured in all other commod-
tiles, and the result is now facing them
The enhanced dollar has enhanced SO
much that there is no longer any profit
able use for it, and it lies idle il their
vaults. #5I~' - =,
The explanation is simple enough for
even banker to comprehend. When
money is, in itself, growing more valu-
able, other things are growing less SO as
measured in money, and the trader. or
manufacturer has no incentive to Dor
row money to purchase them or make
them. Before he gets them on the mar
ket they will have fallen in price, and
he will net loss. This has been the
steady experience Of this country for
nearly five years running. Consequently
the cash has been piling up in the bank
vaults, the bankers themselves have
lost money on that portion Of their de-
posits on which they paid interest, and
they have been compelled to reduce
their rates. -,
This condition Of the money market,
of which there is unanimous COM
plant, is the very best contradiction of
the oft repeated boasts in certain news
papers that the country's industries and
trade are really reviving and that we
are on the eve Of big business boom.
If there were fair chances Of profit in
or manufacturing business,
the merchants and manufacturers would
be besieging the banks for capital with
which to start new enterprises, to re-
plenish old ones, and to increase their
operations generally. This demand
would soon relieve the plethora Of
which they all complain, and interest
would be rising instead Of falling. Un-
til the banks cease to complain Of lack
of responsible and profitable borrowers,
and until the interest rate advances, all
talk Of q revival Of prosperity is the
sheerest nonsense. Seq !.
The dream Of renewed prosperity is
fading. The condition Of the banks tells
the whole story in q manner that can
not be mistaken. y 5=@@
.5.s A Man Named Hobart. s5s
Rumors of contemplated cabinet
changes serve to once more remind the
country that q man named Hobart ID
vice president Of the United States. 5I It
was ever thus Just as soon as the coun-