The independent. [volume] (Lincoln, Neb.) 1902-1907, 1903-01-08
ABSTRACT NO. 81
Mr.. Van yorhis Annlyzes the Comp ptroller'S
Abstract of the Condition Of
National Banks

National Banks
Editor Independent: The relation
which the national banks sustain to
the money volume, the assistance they
have been receiving from the treasury
department. and their present cond;-
ton calls to mind the description with
which Henry George began one Of his
books-a bull tied to stake in the
yard, eating grass round and round
and winding himself up until no room
was left for him to move.
| have frequently called attention
to the way in which government funds
have been usel to assist these banks
to expand credits, and to keep up the
stock gambling in Wall street. and to
the obvious fact that the time Is not
far off when the secretary or tie
treasury would not be able to continue
such assistance.
The comptroller's abstract of the
condition of national hanks (No. BIZ
shows conclusively that tie limit OF
ability to assist these banks. either
By buying bonds or by depositing go"-
ernment money, has been about
reached. Unless some other method Is
devised to give these institutions more
money or to release part OF the re-
serves, the expansion of loans and dis
counts must cease, to be followed
quickly by an effort to reduce the
amount of them.
This al tstract shows the expansion
Of bank credits between September Id
and November rs, to have been con.
siderably less than one-half what 1t
was between July 16 and September
Is, the time covered by abstract No.
80. During the same time, in order
to hold up the hands of the stock
gamblers in Wall street, Secretary
| Shaw deposited in national banks more
than three times as much government
| money as he had deposited during
| the time covered by any one of the
abstracts since June l, 1900, to-wit,
| 22,S74, ,616 he government deposit
| has, month by month, been increased
| until, on November 25, it had reached
| the enormous sum of $146818,41 and
| left less than $60,000,000 Of available
funds in the treasury. 1t must not be
| supposed that the deposit is available,
| for it is not Secretary Shaw dare not
draw this out of the banks. 1t would
| take $42,100,393 out of the 46 New
York city banks, and would cause q
| panic at once. The New England and
eastern states together have 1,708
banks. The 1862 of these banks out
side of New York city hold govern
ment deposit of $36,275, ,296, or only
about six-sevenths as much as held
by the 46 New York city banks.
| The entire amount of cash held on
November 25 last by the 1866 national
banks was less than 1884, 100000 This
amount is the basic support of almost
$4,000, 100000 of national bank credits.
with an individual deposit of over 3d.
$50, 100000. This is exclusive of near
ly 100000 of government deposits
and nearly $512,000,000 due state
banks, trust companies and savings
banks. The whole national bank sys-
tenn is rotten, ram-shackle structure
held up and held together by govern
ment credit and government funds 1t
would go to pieces in week except
for the money and the credit of the
nation. 1t must continue to have gov
ernment support or it will bring dis
aster. There must now be legislation
that will enable these banks to issue
their own notes at any time, and in
any quantity they please, with gov
ernment guarantee to make them good.
Any one, who has any knowledge OF
financial economics, knows that the
money that Secretary Shaw now has
on deposit in these banks is a forced
loan to them without interest, and that
he dare not withdraw it. To do so
would precipitate panic, the conse-
quences of which can hardly be i'm
agined. II .fs%
With this condition staring us in
the face, we are told by the iministra-
tion officials, by republican leaders,
and the batch of hypocritical, reor-
ganizing democratic echoes of repuh-
lican assertions that the financial
question is settled; that the money
question is a dead issue.
This abstract like many preceding
it, shows; the shortage in the reserve
required by law to be kept in these
banks to be quite general and large.
In connection with this. think of the
fact-for it is a fact-that the comp