People's voice. [volume] (Wellington, Sumner County, Kansas) 1890-1917, 1898-02-03

doxy of whose Republicanism ba.
never been questioned, not only
rebels at the proposition to retire the
greenbacks and declares that the
people will never submit to such a
proceeding but goes on to puncture
the commissions banking scheme
as follows:
1t is proposed by the Indianapolis
money reform commissioners that I'd.
tiOGal bank notes shall be a first lien
on the assets Ut the banks issuing
them.
Those corporations owe their depOsi-
tors TWO billions Of dollars, payable Oh
demand. Their capital at this mo-
ment is 637 millions, or less than a
third Of what they owe their deposl-
tors. If they were to issue notes to
half that amount then there would be
a first lien on the assets of the banks
to the amount Of 1854 millions. The
dep0SitOrS, to whom is due two billions
would have only second lien. Out
of what fund in case Of panic or run
would they be paid?
The state banks have deDO sits
amounting to a billion Of dollars. If
they were to become national banks,
then the volume of note issues would
beincreaSed half billion perhaps. 1t
might soon exceed a billion Of dollars.
Those notes would be a first lien on
their assets which represent chiefly
the money Of their depOsitOrs. Would
the depOsitOrs feel pleased when they
saw so big lien showed in ahead of
their claims on the banks with which
they kept their spare money?
There is a liability of an adverse
balance of trade any year, which
won d make gold shipments to Europe
necessary. TO obtain this gold for
expectation bank notes would be pre-
sented perhaps by tens of millions for
redemption. When the depositOrs of
all the banks saw the gold going ont
of their vaults they would begin to
ask themselves, SIS there gold
enough left to pay US with?" To
make sure that there was tens of
thousands of them would draw out
their deposits. There would be a
general "run" which might ripen into
a panic, and the result would be as in
former CaSes-the best of the banks
would suspend specie payments of
their notes and the rest would go
into insolvency.
The banks, being subject to the dan.
ger of an attack from two directions
instead of one-both nOteholder and
depOSitOr-wOuld have to adopt pre-
cautionary measures which would
bear hard on the business community.
When there was the remOtest symp-
tom Of demand for gold they would
have to begin calling in loans and
squeeze their customers in order to
have funds on hand with which to
meet an impending double attack.
The more cautious institutions
would loan money only on call, so
that they could gather in their funds
at days notice. The result of that
would be desperate scarcity Of
money to be loaned when wanted for
liked periods, 1t would be far more
difficult to get paper discounted on
time than IL is now. The whole thing
would be bad and greyious all
around.
The national banks, with their
notes secured by government bonds
and thus source of no anxiety, have
not gone through the last thirty-four
years without mishaps. A great many
OF them have gone into 'liquidatiOn".
A few have paid all they owed to
their depositOrs. Many others have
fallen far short of doing so. And
many millions have been lost BY their
depositOrs. Dishonest or incompetent
management has ruined banks in the
past and will ruin banks in the future.
No surer plan of increasing the num-
Der OF casualties can be devised than
the one which has been elaborated by
the commission of basiDg gigantic
circulation on the assets Of the bank,
stockholders and deposit0rs, and
making these institutions carry two
loads when one burden is amply
enough for them to bear.