Barbour County index. [volume] (Medicine Lodge, Kan.) 1880-current, 1900-02-07
MONEY AND BANK CREDITS.
Deposits and Loans VIII Always Rear
Ab6ut the Same Proportion to the
Volume of Money. 3

We first find that all the money in ex-
istence in the United States at the pres
ent time, outside of the national treas
ury, is about $1,000. .oOO, 900. page 26o
Here We find, by the report of the
comptroller of the currency, just issued,
that our business men, in order to get,
sufficient money to perform the ex-
changes, have borrowed $5,751, ,467, ,610. or
about three times as much money as
there is in existence-have borrowed 1t
from the bankers. page 27) What all
this means is that experience shows that
1t takes as much as S., $50. 900, added to
the $3.50, ,000, 600, the probable amount in
the pockets of the people, or in all about
Sc, 900 600 600, to perform the exchanges Of
the people of the United States. and to
get that much-a normal supply of
money-the people are paying to the
bankers, in interest, as much as $350, ,000,-
600 annually. page 3D. If there was a
normal supply of money in existence
there would not be that enforced borrow
ing. page 32.)
/ cannot indorse the conclusions
reached by Mr.. Harvey, nor do 1 be-
ieve that they can be successfully
maintained in. public discussion.
L take square issue with all those
who assert that an increase in the
volume of money in circulation will
prevent panics, or reduce the ratio
of bank credits. First: because an
| increase in the volume of money SIM
ply increases prices, without increas-
| ing the number of distinct exchanges,
or business transactions, or their rel
| ative ratio to the volume of money.
| Second: because savings and COM
| mercial deposits and time and call
| loans will ever bear about the same
| relative proportion to the volume of
money; that is, provided the banking
| system of country is fully developed
| and systemized. The modern bank
ing system is probably as excellent
and perfect a medium and method for
and OF the distribution and transmits
sion of money and credits, as will
ever be invented. So elaborately and
| completely have all the details, COM
| plex and simple, been perfected and
arranged, that the banking business
has been reduced to an exact science,
governed by infexible laws, so that
a knowledge of it's workings in the
past enables one to predict with GER
tainty just what it will do in the fu-
turc.
An examination of banking stats.
tics will reveal the fact that there is
always in the banks of the country
close approximation to one-half OF
all the active money in the hands o1
the people, while the cash in the
banks always bears about the same
proportionate ratio to deposits and
loans. An examination of bank
statistics for a period of years, dur
ing normal times, will show that de
posits will average slightly more than
eight times the amount of money in
the banks and about four times the
amount of money in circulation
while loans will average about one.
fourteenth less than deposits.
| 1t is conceded by government of
ficials that the statement of money in
the country includes $30O,00O,O00 OF
gold that cannot be located, or ac.
counted for. The loss in paper money
of various kinds and minor coins will
further reduce the estimate, so thatii
is safe to assert that not more than
| 81 100000, 900 is in the hands of the
| people, outside of the United States
treasury. a..y i r, o.e -.
| Savings and commercials banks are
the most vital portion of the body
social and polite, and have the most
Important functions to preform
Banks have fifty been compared to the
heart of the social community, or ma
ton; and the several various channels
of commercial, productive and dis
tributive activities, to the arteries and
veins. Money is the 1ife-hood of a ma.
ton; and even as, in the human body
the blood is pumped into the arteries
and veins by the heart, to return to
the heart again and again be pumped
out, so also money is loaned out by
the heart (banks) and returns again
to the heart Cbanks) in the shape OF
deposits, to be again loaned out But
even as heart disease is one of the
most dreaded and fatal diseases. Sc
also, when the heart of the nation
(the banking system) refuses to pre-.
form its functions, the life-blood OF
the nation (money) becomes stagnant
and ceases to flow and circulate in the
| arteries and veins, and the nation. OF
body polite, becomes sick unto death:
so that, if circulation is not speedily
restored, all (business) life, activity
and energy must cease and the nation
die, or relapse into barbarism.
The power that controls the issue OF
a nations money has, to great ex-
tent, all productive and distributive
industry at its mercy. But if the
power conferred by the control of is.
sue is great, greater by far is the
power inhering in the control of dis
tribution. If any power, other than
the nation itself, has the control OF
both the issue and the distribution
of the nations life-blood-credit-
money, then that power has the ma.
tion by the throat. There is no other
mode of distributing nations token
credit (money) than by loaning such
credit owned by those who do not
wish to use it, to those who do wish
to use it in the productive and dis
tributive industries of the countr.
and in the development of its re-
sources. This function-power-th
banks now possess in their system o1
deposits, loans and discounts. An un
secured pledge is given by the banks
for the safe return of this token
credit (money deposit) at such time
as those owning it may demand it
The banks are secured by the actua
. wealth-credit of those who borrow ths