The independent., 1903-03-26
GOVERNMENT BANKING
Government Engaged in Baaking Bnsf-
ness aad the Bssks Engaged In Gov
srniag--Abstract Ne. 81

eSnin8-ADesraCs No. %
Editor independent: No. SO SO off the the
comptroller's abstract OF Reports OF
National Bankers has been sent out.
This shows that, on February 6, the
secretary Of the treasury had made
deposit loans to the banks amount
ing, exclusive of $7,341 ,226 Of disburs-
ing officers deposits, to $140,493,4 ,423.
The 81 central reserve city banks,
all of which are In New York, Chica-
fgo and st. Louis. held $46, 6,276,910 OF
these deposit loans.
The 279 reserve city banks, In 81
reserve cities, held $4l, ,213,6S8. So that
the reserve city banks Of both classes
held $87,490,59S. The remainder OF
these loans, $33, 3,002,825, was distri-
buted among the APPS country banks.
So far as the public knows anything
about it, these loans are wholly with
out interest. At least, the govern
ment gets no interest.
In calculating the deposits to deter
mine the amount of reserves required
by law to be held, this entire sum of
$140 ,493,4 ,423 Is left out. The abstract
does not state this, and there Is no
way from it's face that 1t could be
known, but | have letter from the
comptroller dated March 13, 1903 in
answer to an inquiry, that says this Is
the fact
That this is clear violation of the
law by Mr.. Shaw there can be no
doubt. 1t relieves the banks from
holding reserve against this large
deposit loan. There can be but one
reason for doing 1t; and that that reason
ought to subject Mr.. Shaw to Inn
peachment. 1t is an attempt on tha
part of Secretary Shaw and the adj
ministration to cover up the reserve
shortages Of the banks. A large per
cent of these banks, more than half,
possibly three-fourths, particularly in
the reserve cities, have been for
months and years reporting short re-
serves. So far as the public has been
informed, no action has been taken
concerning this fragrant violation Of
the bank law. If this deposit loan had
/ not been excluded from the calcula-
| tion, there would have been 20 out Of
| the "a reserve cities that would have
been shown to be short in their re-
quired reserves, and in a number of
others the bankers surplus would
have been reduced to practically moth
| ing. AS 1t Is, the exclusion of this
large sum could not prevent short
age appearing in the aggregate of each
of twelve reserve cities.
There was not, at the expiration Of
the time covered by this abstract,
single dollar of the aggregate bank
er's surplus held by the 4,766 national
banks that was not covered by these
deposit loans of the government IL
MI. Shaw were to take out of these
banks the $140.493,423, it would take
every dollar Of the aggregate bank
ers surplus, and take SCI ,876,803 OF
the aggregate reserves. If he were to
draw out Of the 279 reserve city banks
the S41,2l3,688 Of deposit loans. Il
would take every dollar of their ag-
gregate bankers surplus, and take
S32, ,566,494 Of their aggregate reserves.
II he were to draw out of the 62
central reserve city banks the s46,-
276,9le of government deposit loans,
| it would take every dollar of their
aggregate bankers surplus, and take
in addition $20,60S,470 Of their aggre-
gate reserves, as shown by this alb
|stract
1t is shown by this abstract that. In
the face Of this condition, the national
banks have, during the 73 DAYS coy-
cred by it, increased their loans and
discounts $47,749,6 ,653, or an increase of
over $654,OO0 per day not excluding
Sundays. 1t is important not to over
look the fact that over S32, 600, 900 OF
this amount is an increase by the As
New York banks alone
The reckless disregard Of public in
terest and of possible consequences
manifested by the crowd of New York
stock gamblers is astounding.
Our administrative and legislative
departments of government have. in
blind ignorance or dishonesty, listened
to the selfish advice and demands of
the aggregations of financial manip-
.ulators, until the situation has be-
come alarming even to them. No
wonder these New York stock gam
bling bankers were anxious about leg
islation during the closing DAYS Of
congress. No wonder, when they found
they could not secure the passage Of