Omaha daily bee., 1898-01-07
"A PROPHET OF GOOD.
The Significance of the Surplus Money
in Banks.
Louisville Courler-Journal.


Secretary Gage is rot ut all disposed to
be II pessimist. and he Is always able to give
q good reason for the faith he has in better
times. In the following extract from the IN
terview with him which was published yes
terday he takes a position with reference
to the present ccngeston of oapital which is
so at variance with she general opinion that
it deserves attention and study:
Some people are, / believe, disposed to
be pessimistic because great sums OF money
accumulate in our banks They urge this as
a sign of national business unhealthfulness;
merchants and manufacturers, chey say, hck
confidence, are unwilling to assume normal
responsibilities, AMI thus the countrys Sen-
eral trade has shrinkage threatening 1t. This
is a superficial view. After yolrs that nave
been practically panic times, exceptional ele-
ments enter into the business situation. And
the unparalleled volume of idle money in the
banks signifies, l think, something very dit-
ferent from what the pessimists harp upon.
More largely than yet can be appreciated
these great totals OF bank deposits reflect the
liquidation of western Indebtedness.
What the western people have accom-
Dl!shed duTiug the year past as payers OF
debts will, when we can come fully 20 com
preheud it, seem flirly to be chapter from
the days of romance. The good prices Tor
this years crops went not to middlemen
and speculators; 81 wheat came while
wneat was yet on the farm, and for the first
fimo in many harvest the markets prohts
were the farmers own. What the western
farmer did, what he is still doing, accounts
far beyCnd what yet is understood for the
mcney which piles up in our banks. That
money largely is the crop money of 1897; and
it has done magnificent service In tne eX-
Finguishment of liens upon homesteads IN
every state in every community OF our great
west. And is this unhealthful? Is there Guy
reason for replning in it?
Mr.. Gage is right, because the congestion
of money comes Immediately after the panic
and not after q period OF prosperity, when
ample employment Is found Tor capital.
When business has been good and enterprises
flourshng a stagnatiOn Of money argues
loss of confidence in securities and CONNER
ca undertakings. 1t is a grave symptom.
But when na.ion or n community has been
struggling along with insufficient means for
years and then finds its difficulties relieved,
its debts paid and a surplus left over, what
more natural than that ths surplus should
be allowed to lie idle for a breathing spell
upil there is opportunity for its safe and
profitable investment? When such time
Genes business will be greatly stimulated
and will be much better than at present, but
that there should be waiting stage should
occasion no uneasiness, least of all alarm.
People are too impatient 1t was prom
ised in the last presidential campaign that
the upholding of sound monetary standard
would restore confidence and revive business
The first effect was felt Immediately; the last
could not be perceived until six months had
elapsed, though the chief reason it was so
slow in manifesting itself was because of the
tariff agitation. When this was over, rail-
road earnings began to swell and bank clear
ings to mount upward by millions Of dollars
weekly. The railroads were not alone haul
ing crops, but also goods, and streams of de-
posits began to flow into the banks. The
volume of trade was immensely increased,
but still nobody cared to speculate unduly
upon tho promises of the future. The recol-
lection of 1895 was too fresh in mind Busi-
ness had been forced down to a cash basis,
and it was advisable to let it rest there for
awhile.
Tho new year will witness a continuation
OF the improvement begun in the latter half
of 1897, unless new and unforeseen conditions
arise. The present situation is one to inspire
every hope. The accumulation OF money is
the best of all signs that the nation is fnan
cially recuperatlng. Mr. Gage has called at
tention to it with admirable clcarness and
common sense