Phillipsburg herald. [volume] (Phillipsburg, Kan.) 1882-1905, 1899-01-26
THE HERALD.
PHILLIPSBURG, KANSAS.
A Country Banker Sees the Danger OF
the Gold Standard to Ills Class.

uby WIZ hNVo III I'll
5000 people, and who, for business
reasons, does not wish his name made
public.
II do not believe in the gold stand
ard" he said, as we sat down to a
lunch at cafe.
"You are an exception to your Glass;
/ remarked, and he proceeded;
"My class, as a rule, have been
short sighted on the subject 1t is
very natural for ones opinion to go
with what IS apparently bis interest
---aud seemingly, temporarily at least,
il is 10 the interest OF the banker to
enhance the value of his money and
securities. When he found that mon-
ey and his money due him on securi-
ties we're rising in exchaDRable value
for other property, it was but natural
for him to fall in with the cry Of
sound money Just as it would be
natural for the farmers TO defy wheat
should 1t rise in value continuously
over q long period, and to find all
kinds Of excuses for justifying high
priced wheat"
But" I broke in, your people
claim that money is cheap"
"A low interest you mean," he re-
piled. THAT is the hiring value Of
money. The exchange value Of mon
ey is a very different thing" Pauslng
Q moment he continued: "The rise Of
money with general fall of prices
weakena, il it does not destroy, the
ability of our customers to meet their
loans, and instead Of the bank getting
it's money back it is compelled to take
Che security after paying out cash in
costs of foreclosure proceedings, 1t
also results in our surplus money ly.
ing idle. 10 my section you cannot
got price on real estate, as there few
or 40 sales except for debt. When a
piece OF real estate is thrown on the
market there seems to be no one will
ing to buy it at anything like what we
call o fair value, and the creditor
must as a rule, take it. Hence this
general fall of prices, unquestionably
due TO the god standard will ulti-
mstely catch the country banker"
"Why not the city banker" asked.
THAT depends on what you call
city banker" he said. "That you
may understand what 1 mean 1 will
divide ban Iers into three classes. One
Is the banker WHO loans on bonds Sc"
cured by taxation. 10 this class are
the Rothschilds and limit ed number
Of money lenders in the east. The
second class are those who loan on
corporation bonds. The third class
are those who loan on the mortgsged
property and personal security of IN
dIviduals. The latter, or third class,
ia what l call the country bankers.
While as bsnke they cannot loan on
real estate mortgages, yet 1t is done
through their directors acting indi-
Ndually. In the fall of prices the
bankers of the third class must 20
down first. In the order of possible
insolvency those of the second class
come next, and the first class can only
fail by the overturning of govern
mente."
"You mean," I said, that the first
class are practically safe so long as
they can put the screws to the tax
psyersg"
"Yes Their security is the entire
property Of the municipality, state or
nation that has issued the bonds, and
the interest must be forthcoming by
including that amount in the tax levy.
The second class stands next IN order
as to the safety Of its loans. But the
third class, what l call the country
banker, takes, at the best, a mortgage
on improved, unincumbered real es-
tate. In his case he takes his lien
subject to taxes, and If the taxes
should pass by for two or three years,
it IS no uncomfortable lien on the
property, and is prior lien to the
mortgage. If in such a case my bank
is the creditor and l buy in the prop
erty, must pay the taxes and cost of
the legal proceedings and continue to
pay the current taxes. 1 know of
several instances of this kind where
the houses are vacant, thus giving no
income in return. And if not vacant,
there is SO much competition between
property owners to rent their houses,
that rents are low, with repairs ex-
acted nv kananta. which ia n chapOo