The times. [volume] (Richmond, Va.) 1890-1903, 1899-02-23


an his locality Tho banker has some
o,nital lie has good credit. Inc
sanctions of the law are over M anu
the inhibitions Of the law arc cNicu,aosu
:. l,sep him I'm n path ~ SAFETY. WIN
I'm the lines Of these proper a'ihih' 'ons'
he-liiye all other men-ought 10 ha 'e
ncrfect liberty visited. os / have JUST
said. by some member ~ the community
who desires . loan the banker mas Two
WAYS by which the needs IL MS customer
can be met. the one IL by loanihs MN
money that Is 60 say, actual capilai
I'm the form Of money; the other is by
leaning 10 the customer the use OF his,
the bankers. credit and ~ | have al
ready xrlained this Is the more I'M
portant field Of the bankers operation
MAY EXTEND CREDIT.
If the banker has money In hand he can
supply his customers need. II his sup
plv Of money on ID be only adequate
To form a proper reserve against MS own
outstanding liabilities, money he cannot
lend. His credit. however. he may eX-
tend. lie can give 10 the proposed Dor
rover credit upon his books asaiis.
which the borrower might check pu'
unfortunately. the borrower must nahe
use Of the credit at outside points "heI ~,
biz credit Is not known. and where Ms
received. lie desires 10 buy wheat OF
cattle. or lumber. or employ lator' so
that. I'm the case | have Just supposed
as he Cannot borrow the money or 'he
banker, who has not the money 70 spare
and as he cannot avail himself OF the
bankers credit because Of the disability
Just pointed out. his purpose ~ defeated
aud his enterprise 10 the community -.
bv so much. lost There was one form
Mt or
the law. could have extended 20 him.
namely the bankers own notes IN de-
nominations Of convenient size. which
would be acceptable In exchange 20 deal
ers and laborers. even at points quite
remote. Do YOU ask why does not tho
banker lend him greenbacks since there
are plenty OF greenbacks I'm circulationt
GREENBACKS NOT AVAILABLE.
The answer IS that the greenbacks are
no more available 10 the banker for such
purpose than silver or gold. since he
can acquire neither except through buy
Ing them IN the market or borrowing
them nc the market price. II perchance
there be any place in the market where
he could borrow them TO reloan again
TO his own customer. % you ask why
he could not obtain. II he were 4 ma
tional banker. his own notes under the
posed borrower? The answer is plain
enough. II IS because. II he sought 10 do
this. he would have 10 invest about one
hundred and twenty dollars Of his cap
ital in the bonds Of the United States
and put them up as security TO his own
notes for only one hundred dollars. This
kind of impoverishment he could not
endure. Every dollar he thus invested
would tend TO weaken his ability TO
serve the public need whore he lived.
Besides il would be- an empty and use
less performance. II he was possessed
Of one hundred and twenty dollars In
capital. with that he could buy In the
market. one hundred and twenty dol
lars IN silver or gold or greenbacks. and
thus have one hundred and twenty dol
lars 20 lend, while as We have seen. II
he took the only route by which he
can now issue his own notes. he would
only have one hundred dollars to lend.
IL Is At this point that the money ques-
ton. as IL relates 10 the currency, Is to
be considered
PARALYZEs CREDIT.
The present system paralyzes one OF
the instruments Of credit--the most USE
full in those regions OF country where
the meChanisms Of exchange. such as
checks anu drafts and bills Of exchange,
are not available for the current uses
OF productivity and commerce. il Is
urged IN behalf OF the Government Is
sues OF paper money. that II is a saw
ing of interest 10 the people. That is 10
say. that the Government, having y3i6.
00900o of it's notes outstanding drawing
no interest. against which il carries on
~ q reserve balance of slOo000.OO in gold
thus saves the interest on the difference,
- fnfau.sf ON xIlt
at 9 per cent. IS S1.3s0O0 and II no other
considerations We're 10 be taken into
view. this saving 20 the people is 10 be
desired. bur it must not be forgotten that
the Government, o. it's broadcast defni-
ton Us the people. and II we save on
one hand the interest on S2iC.00o00o by
the repression OF a natural instrument OF
credit like the bank note. We may lose,
through the destruction of this better
instrument economical values and ad-
yantages far in excess Of the seven mil
lions or more supposed 90 be economical
Congressman Walker, chairman Of the
Committee on Banking and Currency IN
the House Of Representatives. whose
power Of analysis on these important
questions IS Of the first order, figures up
that by reason OF higher rate Of in
tarest under our present system. coca
stoned By the repression Of bank-nota
issues. the people arc taxed. in the pay
ment OF such higher interest, a sum
equal 20 more than seventy millions per
annum. and ] have not get seen any
body able 10 refute his proposition.
A DIRECT INJURY.
There is another side 10 this question
which. II time permitted. / would like
10 follow up. The Government note, iu
addition TO the evils just pointed out
works a positive and direct injury IN ln-
other direction. Being IN itself a legal
tender. it becomes effective the great
centers as stimulant to speculations IN
securities. Under the law a dollar OF
gold becomes lawful reserve for -four
dollars of deposits. Under the law also
fho greenback being "a legal tender as
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