The sun. [volume] (New York [N.Y.]) 1833-1916, 1899-12-07


and the cattle are to be marketed. The Western
bankers and mel, han,s who have funds or credit
nt rest with the bankers In the financial centres
pGrpSses now in question The bank "red, is ali
rig rer 50. but the form in which that credit
Is eMdencrd /, not convenient What they need
Tor These uses Is form oi credit instrument easily
% denomination. and one which will pass from
their need is for paper money. Of hard cash
now subject 10 one limitaton--thSt II safety
regarded 1t is imroSsitlc for anyone TO name
good reason why the Indebtedness Of the banker
in Wis ,cid q NE exchanges should not be ex.
size as IN one consolidated entry 10 the credit Of
his dealer upon his books Of account II is pre-
and loss are occasiIn.d Mia, would be nat.
ural, economical ard effective operation is by
impossible In a state Of freedom. the extraor.
binary wants Of the country at harvest time would
be largely, II not wholly. met by the conversion
OF bank balances, not available for these general
purposes, into bank notes or paper money These,
performing their function: would again return
formed into balances in bank" where. through
the medium Of checks and drafts. the larger COM
meTC.hl uses would he the better served
! have said that the present inhibltions and ne
srctlnns oi the law make this natural course i'm
possible ,S r The Fy2h'6iiSr tax q 10 per cent
llc restrictions and conditions Imposed upon
national banks as condition 81 note issues by
them are pointed 10 in justification OF this state
mrni. can not do better. perhaps, than hero
10 illustrate the argument by Iecen, financial his
They are the most complete and the most nstruc-
tive, although any other commercial centre might
, tie tSe h, ,cs fGT sNSm5" IN AGsus, e. last
Of $s5s 900, 900 They held claims against the
they hSd n IN soT ih", is 70 to say say,
y9q i .s Of %n'y ,sa tender BY
each oller was apparently normal and satisfnc-
tory The merchant OF the man ufaciuter or the
with the bank for the banks obligation 10 him
through rredi, upun its books az tie low cost
Of e.. $. or pct cent per annum. The reserves"
limits their power 10 expand credit operations,
we're ample About this time new influence
in tho interior or the further West, who owned
or controlled portion Of the credit balances stand
% The books q the New lew HsS,k banks needed
OF credit obligation which would be convenient
for the payment Of harvest hands and the other
ihcsden'als 81 crop gathering
These conditions Were known TO my disin-
gushcd predecessor, Secretary Window lie
indr centres. no less than he was with tho
needs of his own State famous for its agriculture
| aud weight should be given to his authoritative
declaration, which Is 10 be found in his annual
report for the year 1890:
In my IudgmcGt, the gIavtsl defect in our presen
dem nd TO- non"y IN MS ronnify' Is so irregusf
ina! IN amount OF circulation "Ach will be amp,e
50 deficient duilns the othe tgo months as 10 cause
st'in stncy and commercial disaster. Tae
mense that Their mo ement 10 market, IN August
aud Scp'ember. annually causes u dangerous alb
10 meet TIC increased demands during those months
may entail heivy losses upon the agricultural as
well a. ~ on otGtT business Interests"
Ii the NcW York hanks could have issued their
notes IN the form OF paper money they would
credits standing upon their books, and this would
have entirely satisfied interior aud Western needs.
Sal n moi wRTs mad hxT
So much book credits would have been Cancelled.
Tho bank statement would have been expressed
Deposits would have diminished, circulating
notes" by so much, would have been increased,
serve rcanag I unss S nS"S wod n "SsN cIS S
nnnrd to be sntiicicn, guard I" liabilities and
have had no shock, But az before stated this
course was not open Nevertheless the inter or
and Western demands had 10 be met in Mo form
= which that demand was expressed. In The
absence n alternative resort WAS uf necessity had
to The cash reserves Bctncrn August 20 and
October H. twenty-five millions OF this fund
which limits and restricts the grnrrnl credit opera
honS o! the banks, were sent 10 perform funcuon
y Esn r'4d h"y9 been Is Gry"E Performed
slider now The effect this produced "A stated, !
S23 600 900 were sent Oh from the reserves. This
by law Tor So, 900 900 81 Deposits The hanks
Were nolongcr able to continue heir main junction,
credit ui the individual On the contrary, ! be. |
came imperatiN', under IN rcdGc,N holdings |
on chSl, III order 10 BRING Ia llilr' down, col
lee, their claims from thu p, nc, sLd by tins pro.
cess reduce their credit Obligations tderosits) |
10 the public
Interest or, more truly 'i"dhing, the banks |
ehoTEc for exchanging IT. rcd, against private
Clrdil--Iusc from %, 3, or IcT cent Ia 10 49,
% 40 pc. cent That clcu,'n OF the currency
which bank credits furni-acd was contracted
within period Of nine W IS TO the extent VI |
reduced 10 that extent P,' he shortest form: |
In order 10 supply the intctlt with the Use Of a |
medium "t CNchanSr foF lew weeks, 10 tho !
amount ri S2', "OOO0O hay "&H wrought IN the |
reg uiar ung,IH; Of our com" rrciai life
II is pertinent Ia inquire 'r,h,r tins is the brH,
Of which Ac are capable ,rhrT Caul' lies offer |
us modcls which II may pf ~ us 10 study! Ger |
tain II IS theI pttturbaiions ~ our finances oitn
trade and industry Equhy certain II is that |
in other countries such pcr lr atoms do not re-
suit In similar general disaster IL u not an