New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-12-07

I'm Of
II Of Choice and not in obedience 20 any power e Oh
coercion the banker exercise Ot an tne ma. da
6 6eTs on 'H In the degree that his funa
lion to that degree he becomes qeoto'; raer the
HE ia bltes Immediately payable lie Is u'' ut,saiS
highest bonds OF selfnterest to so canEHdnnce Of
as win and retain the respect, amre on his part
I in this respect means disaster 10 ms ~, Inc com
munity the value and solvency OF w n,cn and in
large degree upon S SEhI interest TO promote.
best he can the conditions favorable 10 '"e ''''
perry oil ! an1oar then that the banker as prI
vate person might be safely leit 10 opp U because
calling without Interference rom If wisely CON
sidered will guide him in those direc 6irec him TO
would be the policy OF goou I""' ~
Win the growth of society the Increase ~ fnr
tai and the Increased demand upon 'he v,droi be-
r. snrIces he alone can render, the NIu nts of
came noweress to meet fully the Tequl,s,n,onts ~
I,f the strength Of the individual was no
bv association with his fellows ~" lin the large
responsbiiltlcs and many hazards wnich ,hnse co.
experience had shown to exist maui frliy and
oonnaraiing individuals reluctant TO stahd lu'S an"
pcrson1HIi ,haip individual risks they sought au
charity from the law making power 10 me-, H. Gned
! with the limit OF personal aointy sxamnIe SET hy
In This respect they followed the ~ enter-
aaeocioted Efforts in many other forms ~, the
/ prise and industry. IN UPS rwtiniized Now when
the banker was thus given partial e ne law to
responsibility, it became me ,,ou nHi ,pon the exer
nut proper and just limitations ul %yxemnted 10 a
else OF his natural prerogauyes; ,bc limitation OF
degree from the perils or rum ~ t This exemption
PeeIId he accompanied by such limitations HI r re
p0,%erS Win limited responsibility, he was proPerS
limited in the risks and hazaLds I'VE Io denied The
me Tor examination Is not whether ,h tPev
and prohibitions should be Ia,u, S"'
al" am goyernment where the imperial eu,u. Int in
be questioned explanations are ast desirable that
II, rho people should understand the mG n and he
which govern the m9STrG P scope and
oi IKE anG Condemn that which IS wrong 49, HIM,
is right ana imporant that the legislator MN
S sboutd have clear conceptions or inc Iu,I tereI
since th arm banking has come largely unIr p
10y isintive control it is douhy important tiar rcv.
bs we Should know intimately how works works henc
details and comprehend the di'eJ h,tb MAJ give lib
| AIS or evils of the measures winch MAJ e
| ertv or impose repression ,-, % our money
Important is the esta9nsnlnEh osis important
~ t The rliardng OF the National demand Tpe Eli
tions by adequate r cStryo oxposed TO evils which
ought TO be cured. These eVlls arlse O"' -
slIWaiio" a. biitv in the currency should be safety
guarded Aexbility-the power OF xercise Of this
nower with proper limit atoms ana resi-, other
must be intrusted to the bank imtre exncue it,
In fact the banks do exercise that powrt H1 Witch
regard to The larger d P1y Constitutes or the currency
II il a popular delusion that inc t.. u' Healings-an
money none GjncIdent no doubtful truly speakinR,
an Incident only The bank deals in credits + OF pa
gtarca e. gives TO the public with whom II
deals its debt obligations III ,e,oncrs The
obligations OF the bank thus created are deaieT
evidenced by credit upon us poohs ~ Me checks
U,bo has the right TO draw upon II by ms ~
W. drafts as his convenience may be served me
constant Interchange OF credits between vonme OF
| checks and drafts constantly passing ~, W. use
buyer and seller 6G tnHbfSv 1t Is these nsru
ments which trade uses In much t1e laas'i poid ar
ali It's operations Money-real money sG III, 80
siIver-piays but a small part in the ACKNOWLEDGEMENTS
exchanges The total money OF me 0n ghiin the
! "deposts'' OF the commercial banks state ana Ma
tional aggregate more than 20 80 "a coo an de-
post? 1t represents as indeed. does the whI ore
deposit fund the unused credits peong 5 ia nkers
/ hands But the period Of such rest IS extremely
short Through the clearing houses OF the county,
his great fund il each month invaded by chec c
and drafts to the total OF more than 5000 Co 90 90
Whole deposit FUND would be exhausted, and SO It
would were It not that the non f,er bank
checks themselves prefer credit upon III md
ers' books. Thus II comes that these cnechS nv
drafts are rather nSruen 1r if fbe Teazation Of
money They. however perform IN our u S! 10
dollar note Of the Government or the fractional ma
silver coin performsIthat IS 10 say } 1,[ one 70 an
other and by which trade accounts are oi
Thus it would appear b t4' checks and drafts and
bank credits constitute the rea t,r.ciipn il now
governed by the mutual action OF the banks ana
. the business public -. -o,,,,-
II what is above written IS true It must be recGg
nized that I'm the larger affairs OF our CONNIE
life the currency" supply Is. as RUE eGua ai ~
the demand In other words. when TIE 9P'tal djt
with the accessories Of checks ana dIaLtS LUZ
all the mechanism OF exchange that trace &
/ With a periodical regularity. however cir'iL!S
marked occurring year aiySi Of exchangS are
proved TO be inefficient for the service then required
Then the crops are be harvested, the labor cost
paid The grain and the cattle are TO be marketed.
! The Western bankers and merchants VINO nay th
rest Wit
/ financial centres find that checks and drafts are
suited to the PURPOSES now Int b FORM G
/ which that credit Is evidenced Is not convenient
Instrument easily recognized by the people one
convenient to denomination, ana one whlc t VII
In short, their need is for paper money or nara
Now subject to one limitation-that Of safety
TO the holder, qualification never TO De as
is S fGr any one the banker
in this field Of the exchanges should not be eN-
Size as in one consolidated entry TO the credit of
his dealer upon his books Of account 1t Is pre- pr,
and loss are occasoned. What would be tural,
Economical and effective operation is by the in
millions and restrictions Of law made impos-
sibe. In a state OF freedom the eXtraorCinafy
wants Of the country at harvest time would be be
bank balances not available for these general pur-
poses, into bank notes or paper money These per
forming their funeGn would again retITn
i hd aance was in bank where through the
medium Of checks and drafts, the larger CONNER
cial uses would be the better served.
UNREASONABLE RESTRICTIONS.
I have said that the presen; iuhbtOns and re-
strctions OF the law make this natural course I'M
possible The prohibitiVe tax OF 10 per cent upon
The notes OF State banks. and the unreasonable re-
strctions and conditions imposed upon National
banks as condition of note issues by them are
pointed TO I'm Justification Of this statement. can
not do better. perhaps. than mere to Illustrate the
argument by recent financial history take the facts
from New-YCrk records. They are the most com
plete and the most instructive, although any other
/ commercial centre might be selected for example.
on August 70 last the banks OF New oTk held in
deposits II unliquidated debts to the public
ne large amount OF S5SO0O.0OO. They held claims
against the public Outstanding loans) amounting TO
S7fSOO.OO0 They hcl in cash-that Is TO say, Var-
Gus forms OF money legal tender by aw-upward OF
1927 The relation Of things to each other was
apparently normal and satisfactory. The merchant
the manufacturer or the general dealer could cX
change his obligations with the bank for the bank =
obHehoh 10 MN 'Hiou6i d N''4l' upon ~ DoONs ~