The daily journal. (Salem, Or.) 1899-1903, 1900-01-30
ruE NATURAL FUNCTION or
BANKs--AND SOME UNNATUR--
Al FUNCTIONS.

THE NATURAL FOiNSiiON ~
BANKS--AND SOME UNNATUR--
Al FUNCTIONS
In recent speech at Orange, N. j.,
the secretary Of the treasury, Mr. Gage,
described the banking function exactly
The natural function OF the banker, he
exclaimed. Is TO deal Gin credits and IN
exchanqcs." Continuing, said Mr.:
Gage; ''fIe swaps his credit, vel
known and effective as IL ought TO be, |
for the credit obligations OF his custom
ar. which, for lack Of public knowledge,
would be ineffective in the market.
That a. indeed, the true function Of the
banker IL IL, too, in the highest de-
.,ree a useful function. And II bankers
eonfined themselves TO that function,
there would be little or no hostility tol
them. But the spirit Of monopoly seixes
them, and they lobby for Legislative
privileges. Not satisfied with dong
their own legitimate business, they want
10 do government business also. Ana
30 they make rings, which calole, ana
threaten, and bribe, TO secure and re-
tain for them the governmental Junction
OF making currency. This is no part OK
the credit swapping function. But IN
private hands II Is profitable ana pow
erfuI privilege, as all public franchises
are. The heavy burden Of that privl-
lege the people feel and ieellng u WIN
out always understanding IL, they be-
come hostile 20 banks and bankers as
such, when their true and just cause OF
complaint Is against banks and bankers
only as beneficiaries Of powerful gov
ernmental privilege. The Public.
There is point in tho above which
might well be seriously considered by
bankers who wish only 70 TO do legiti-
make banking business, but who lind
themselves held In poor esteem by
great portion Of the people who do not
make sufficiently ane distinction be-
tween them and the priyates OF the
financial world.
Many labored editorials have been
written TO show the usefulness OF legiti'
mate banking, as Secretary Gage de-
fined II, thing which is obvious ON ile
face but the confusion In the minds ol
the people has partly arisen from the
fact that the defenders OF banking and
bankers have tried 10 convince the peo-
pie that, because legitimate banking is
necessary, all sorts Of banking'are a good
thing for the people.
The business Of the world is done
through the banks. The swapping oi
its credit by the bank in exchange for
the credit OF the individual, while IL Is
expensive for the Individual, Is con-
venience for the business world.
But the trouble is that the banks
against which the popullstic accusations
hold good do not condne themselves TO
natural functions a. defined by Sec.
Gage.
The national banks are not satisfied
with loaning their own credit. They
loan the credit Of the government
Stripped Of all iog aud aophistvies the
national bank notes represent the credit
Of the government, nothing more and
nothing less. Tho credit Of the bank OF
issue cuts no figure whatever. No one
cares what Ia the name Of the bank on
national bank note. No one looks 10
see.
The bank may be burtted anu gone 70
the limbo OF financial wrecks but every
one knows that the note is good and will
be redeemed by the government
SO Gar as their currency functions are
concerned, all national bank notes
might DO printed from the same die.
The name oi tho bank and the sigma
tures Of its officers are iaercly amatter
for the convenience Of Uncle Sans
bookkeepers in keeping accounts with
the banks.
They have one other use, however.
That Is 10 throw dust ia the eyes OF the
people and make some ol them think
that the bank really issues" the cur
rcncy, thus preventing them from see-
ing that tho government really loans
this currency to the banks withoat
interest. merely charging nominal tax
On circulation.