The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1899-02-02
THREE PER CENT RATE
PRESIDENT STICKNEY THINKS
THAT SHOULD BE THE IN
TEREST LIMIT
TALK BEFORE A COMMITTEE
age of Mr.. McGilps Bill for Allow
ing Banks With a Capital of
100000 to Establish Branches
Throughout the State-PoInts of
the Address.

the AO0reSB.
The joint legislative committees on
banks and banking held a public ses-
sion last evening at the capitol to con-
slider 8. F. Lis, introduced by Mr.. Nc
Gill (Rep.), Of Ramsey. The bill pro-
v1des for an amendment to the bank
Ing law Of the state by allowing any
corporation that has been or may
hereafter be formed, with a capital
stock of $1,OOO,0O0, to establish a bank
and branches throughout the state.
The feature Of the session of the
by A. B. Stickney president of the
Chicago Great Western railroad, on
the subject 1.-THE Three Per Cent In
terest Rate as Relating to Banking"
In addition to the members Of the
committees present were President
Lusk, of the National German-Ameri-
can bank; w. B. Dean, City Comptrol-
Ter j. ]. McCardy, Gen. M D. Flower
ana Mr. Alness, of the Scandinavian
American bank.
Senator McGill stated that the bill
had been introduced by him and was
In the interests Of system rather
than in the interests of any organiza-
ton. He introduced Mr.. Stickney. who
stated that he was not banker and
never intended to be one. He believed
that system of banks such as men
toned in the bill would be Of benefit.
and this reason alone had brought him
before the committee. Mr.. Sticknev
said in part
In a public speech about year ago I made
me prediction that the basis Of the next bust
ness boom in the United States would be the
with the year 1885, which has 1ust closed
The basis Of the boom is the per cent rate.
me per cent rate has not yet reached the
producing masses.
IMPORTANT TO FARMERS.
The problem which confronts the farmer
Is not how to produce wheat and other cereals
and domestic animals. but how to produce
them at cost which shall be less, or. at any
rate. shall not exceed their value 1t is a
problem of cost. The interest rate "a an
important factor of cost
Wnen we come to consider the case of the
FARMER who has to borrow the major part
OF his capital, the interest is still larger
laws of the state forbidding a higher rate
OF interest than 10 per cent, everybody
knows that an impecunious farmer cannot
tH capital for the purpose of buying and
improving land at a fat 10 per cent rate.
The most important effect upon the profits
or the farm would result from the reduced
interest rate.
The Importance of the interest rate can
hardly be overstated can see no reasonable
basis for expectation of increased values
OF the city real estate and of the forms for
establishing new manufacturing enterprises in
the cities or larger profits in farming or an
increased population by immigration In Min
nesota except dollar a bushel wheat rate
or
THREE PER CENT
interest rate. In my Judgment the long talked
of dollar a bushel wheat rate is q dream
Wheat finds its market in the open markets
of the world, and its value is fixed by the
natural laws of supply and demand. Can
the legislature or the individual suspend the
operations of this natural law? Occasionally
there arises a man who thinks he can. Jo-
seph Letter thought he could. do not think
the natural law can be suspended.
I believe that the conditions already exist
which render the per cent rate or it's equiv
alent for small loans, attainable to the peonle
of Minnesota. do not think it is necessary
to wait a further increase of capital 1 be-
ieve that the per cent rate is only ques-
ton Of the proper organization of the bus-
ness Of banking.
THE SYSTEM OF BANKING
in the United States and under the laws of
Minnesota consists of a large number of
Isolated, independent banks, and the national
law requires a mixture containing at least
one-quarter of money, and the Minnesota law
requires mixture containing at least one
fifth of money, and this high percentage
seems none too much for the safety of such
The banking laws of Minnesota permit the
organization of state banks in towns of
population Of 1000 or less, with a capital Of
only $4,000, and In towns of 15OO popula-
ton, with $4,000 capital, and In towns of
1000 population, with $40 900 capital, and In
towns of over 10000 population, with $25, 900
capital.
If the per cent bank rate is to be- CARRIED
to the farmers under the present law it must
be through the fundamentally of such insti-
tuticns. And 1t is demonstrable by mathe-
hor 1Io l,,-a
manufacturing loanable credits except at a
cost exceeding per cent.
1t is therefore evident that the FER cent
bank rate is impossible under system of
isolated banks, and the banking laws of the
state permit others.
The first step. therefore, towards the per
cent bank rate is to amend the banking law
so as to permit the organization of systems
OF branch banks. Such banks carry banking
facilities to remote and sparsely settled dis
tr.cts by means of an agency and can loan
all that the business of the location demands
be 1t $780, 600 100000, instead Of $40 600; and
thus only can the per cent bank rate be
carried to the farmers.
MR.. STICKNEY's CONCLUSION.
In concluding his address Mr.. stickney
said:
Il advocate the measure because I am
Observation-Disclosures 1 want the people of
Minnesota to prosper-because I want farm
Ing more profitable and manufacturing pos
sible-because I believe that the partner who
plans and slaves and risks Is entitled to a
larger percentage Of profits than the partner
who only lends and does not plan or slave or
risk-because the per cent rate would save
more each year than the entire freight from
the farms to the markets of Minneapolis and
Duluth amounts to-because the saving in
interest In carrying grain over the winter
would be more than the cost of transporta-
ton from Duluth to Buffalo-because | want
system Of banks which will permit of keep
ing the actual money amounting to about
SIS, 900, 900, which is owned in Minnesota,
kept in Minnesota instead of being sent to re-
serve banks in New York and Chicago to be
loaned there at to per cent, while the Dor
rowers Of Minnesota compelled to pay
people Of Minnesota to own the property free
of interest tribute-beeause I want the people
OF Minnesota to own the railroads which
would conduce to better railway management
and better railway observation-disclosures / want
the water works, the gas and electric light
ing plants and the street railways owned by
the people of Minnesota-because I want the
farms and the city real estate more valu-
able, and bankrupts to become solvent-be-
culture, more and better live stock, more
books, magazines newspapers, more pictures
more music, more flowers, more bath tubs
and other comforts which would rake rural
life more attractive, and elevate and ennoble
the pursuits of agriculture, so that young
men and women will be more willing to lead
lives of independence ON the farms rather
than lives of servitude in the cities. But
why go further? Who can foresee, or, fore
seeing, who can paint the possibilities which
Turk in the per cent interest rate?"
MATED DnApn CAIRDIro