The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1902-02-15
NORTHWESTERN BUSINESS GOSSIP
The Small National Bank-Queston of Emergency Cur
rency Indications From Figures of the Trade of
the Month of January Prominence of Flax as a
Factor in the Commerce of the Northwest.

No business Institution has proved more
OF success in the northwest than .ie
small national bank The law permitting
l-the organization OF national banks of
$4,000 capital is generally Endorsed. 1t
has resulted in better banking facilities
for many communities. and supplied
money to new sections OF the northwest
at the exact time those sections needed
additional financial steam to push them
ahead. In many of the new towns OF the
| northwest, national banks have been
ready for business by the time the set
tier has came upon the ground and the
stakes marking the limits of town lots
have been driven. The small national
bank has proved popular with men who
had money to invest in bank stocks. 1t
has proved a blessing to the new settler
| looking for money accommodation. .
| Present banking laws are such that the
| average new town is not forced to beg
| hard to secure a bank. The law allowing
| the organization of national banks OF
| $4,000 capital has contributed to this re-
suit. TO be sure, there arc cases where
too much Of the good thing is in evil
| dence, but this is an evil readily cor
rected. What North Dakota philosopher
refers to as the "unfttest" will in these
cases pull out. Communities are at
| least assured of adequate banking facili-
ties from the start. Northwestern de-
velopment in the past three years has re-
suited in the building of many new towns
The bank has usually been on the ground
first, partly for the reason that there is
much money seeking investment, but
| principally because of the fact that an
association of bushes men could secure
prestige by owning the first national bank
OF the town by paying in $4,000, instead
| of $4,000.
Following the unsatisfactory crop Of
l no l,n, 1yc, 80 - 80 Ivy lad
| lions of the northwest did much to place
! the settlers on their feet financially. Many
| OF them were without seed with which to
! sow the land ploWed the fall before. In
| some instances these people were aided by
| the railroads and elevator companies.
| But in the majority of cases help had to
come from the banks. At this juncture
the fact that every new town of any size
had been supplied with banking facilities
was appreciated. In many sections of the
northwest, Iowa men owned and Ofhcered
| these small banks. They had seen sec
! tions of Iowa go through the same ex-
perience. The rate of interest was not
always such as the bankers cared to see
| in plain figures on paper, but they took
much risk and the farmer borrower appre-
ciated the accommodation. The big crop
| Of last year permitted the liquidation of
! these obligations. The numerous small
banks made money, and the northwestern
farmer proved again what many had done
before him THAI he could make good
money after paying a rate of interest
| strong enough to stand alone.
Since the passage of the law, the. ma
jority of national banks organized have
been organized with less than $50, 900 cap
ital. From March IA, 1900 to January 81,
1902 total of $50 national banks were
organized with an aggregate capital of
S47, 1853, 900. OF this number SGT were
/ han Of 1occ thar nil 81
1 the month of January 40 national bank
ing associations, we're organized with an
aggregate capital Of 1880, 900. Twenty
! five of these have}less than $4,000 capital
The proportion Of banks of less than
$4,000 capital to banks Of $4,000 or more
is even greater in the northwest than in
the country as "a whole. The railroad
enanger, the, town site man, and the set
tier apprectatethe small national bank.
An Eine.aen Currency.
Northwestern financial men are LOSING
little sleep over heYsloW progress which
congress is making in currency legis1a-
ton. The majority Of northwestern bank
ers fear the mistakes possible in hasty
legislation as much as they realize that
the present conditions can be very much
improved. There is a unanimity of opin-
ion that the country, the northwest in
Discussion of the ways and means OF
creating this currency brings out various
opinions. Since several western bankers
yelled rats" at James H. Eckels, the for
mer controller Of the currency when he
read his paper on "assets currency at
the bankers convention at Milwaukee
there has been much discussion Of assets
currency and many converts to that theory
have been made. The Gilman bill, now
in congress, which provides for the or
ganization of clearing house associations
4 and the issuing by those. associations OF
clearinghouse currency to the value OF
| rs per cent of the bank securities ap-
proved by the loan committees Of the as
sociations: is receiving some attention
in the northwest. There are bankers OF
prominence in Minneapolis and st. Paul
who favor this plan. The twin cities are
on easy street, comparatively speaking,
and will be until the, time comes to move
next fall grain crop. Then local discus
sion on emergency currency may be ex-
pected to take brace. Sentiment among
! financial men in the northwest appears
to favor more thorough campaign OF
education on currency reform before ask
ing congress to take action. Since the
rats" episode at the Milwaukee conven-
ton the west has been agitating currency
reform more vigorously than in all the
years previous. President Stickney of the
Chicago Great Western with his idea OF
a central bank and a more closely allied
banking system, gave the entire subject