The evening times., 1899-12-05
BANKING AND CURRENCY.
Faults In the National System Point
ed Out.

ed Out.
In the beginning law took no coguizance
of banking. 1t grew into being as. in a
free condition, the arts and trades and di-
visions in labor have grown. When society
reached stage where man could put con-
fidence in man. credit was born. The pro-
ducer or owner of property became willing
to pass its ownership to another, against
the buyers promise to pay its equivalent
value at a future time. Thus an enor-
nous step forward was made. Brain and
Drawn. united to character, could then
gain the use of the tools OF production. and
with their aid could win from the reluctant
soil the value for the repayment Of their
cost. Ability, borrowing capital. could
create capital. Thus the accumulations OF
society advanced from the rule of addition
to that OF multiplication. The men who
desired the power which credit gave in
creased In number, and under the same
law which developed the division Of labor
and the specialization Of industry, the
dealer in credit became specialized from
the dealer in goods.
Functions of the Banker.
The man thus distinctively separated be-
came known as the banker. OF necessity,
he was a man of property and Of acknowl-
edged responsible character. His obliga-
ton was effective for the exchange of
goods, and those Of lesser repute or stand
ing found it to their advantage to borrow
his credit in exchange for their own. Pos
sessed Of financial resources OF his own.
represented largely in cash or money, 1t
became natural for him and advantageous
to the community that he should pay for
local products at the point where they were
produced, to take his reimbursement at
some distant point to which they might be
shipped and sold. He further became
natural temporary repository Of the idle
money of others, and this aided him to
perform in a larger way his particular
function. The above describes all he did
then. 1t describes. all he does now.
To this list Of operations carried on by
the banker nothing can be added. 1t COM
prehends all his functions. 1t will be OBJ
served by the thoughtful that in no one
of these is he able to operate, except in
whom he deals. He is powerless to take
the initiative in any OF them. Whoever
deals with him does it of choice. and not
in obedience to any power of coercion the
banker can exercise. OF all the members
of the community, he Is the one the most
dependent. In the degree that he operates
his function, to that degree he becomes a
debtor, with all his liabilities Immediately
payable. He is under the highest bonds Of
elf-interest to so carry himself as to win
and retain the respect and confidence of
his constituents and dealers. A failure On
his part in this respect means disaster to
his business and ruin to himself Holding
claims against the community, the value
and solvency Of which depend to large
degree upon continued activity and indus
try in trade it Is his interest to promote,
as best he can, the conditions favorable to
the prosperity Of the community.
The Need for Flexibilfty.
Important as is the establishing OF our
money standard upon a safe and endur-
ing basis, important as is the guarding Of
the national demand obligations by ade-
quate reserves these alone will still leave
our financial system exposed to evils which
ought to be cured. These evils arise out