The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-11-20
KANSAS CONNENT
NOT THE REASON.

|
| The financial expert is abroad in the
iand. The Rev. jeremiah D. Botkin
| declares now that the cause of the fin
| ancfal panic was a lack of currency.
a lack of currency has been the
| cause of many financial panics to in
| dlViduals, corporations and countries.
But suppose instead of there being $35
per capita in circulation there had
peen $40 per capita. What influence
would that have had on the panic ex-
cept to make it larger than it was? If
there had been double the amount OF
currency, there would have been dou-
BILE the amount of deposits. The
Knickerbocker Trust company, instead
OF having $60,000,000 on deposit,
would have had $12O,OO0,000. The 20
per cent reserve required for them to
hold would have been wiped out in a
shorter time when the depositors made
| their demands. The amount of cur
rency in the country has nothing to do
with the panic. The panic is caused
by the loss of confidence in the credit
of our financial institutions. Under our
banking system money is received and
loaned by the banks. The banker
serves in manner as an agent for the
man whose money he loans, and the
man who wants to borrow. He is an
intermediary. He becomes personally
responsible, however, for the funds de-
posted with him. He loans the mon
ey and the borrower becomes person
ally responsible to him. He is under
OOllSdllOh TO TGIuFn TO the OSpOSltOTS
their money when they ask for it. I'm
der normal conditions money flows in
and out at about the same rate. Now
whether there is a large or small
amount of money in the country does
not change the processes of business.
The smaller the amount the less Sc
we're would be the panic, because the
obligation of the banker would be
smaller. The larger the amount of
money, the larger the deposits and the
larger the obligation
What the bankers and the advocates
or an elastic currency are demanding
Is that when the depositors get
frightened and call upon the banks
for their money in large numbers, the
banks be authorized to issue cur
rency on their resources, and that this
currency be recognized by the govern
ment as a legal currency. A bank
may have 100000 in good security
that it can not Immediately realize on.
Those advocating a flexible currency
claim that there ought to be some pro-
vision by which the banks could issue
ity as basis and pay their frightened
depositors as fast as they come and
demand their money until they are all
paid, and then the bank could go
1T could realize upon its securities, and
then retire the emergency currency as
rapidly as possible.
Some such plan as this has been
suggested by Secretary SHAW, but the
theory that a larger circulation per
capita would in any way prevent pan
les Is ridiculous. There is plenty of
money in the country to transact its
business if the money is kept circulat-
ing, and if there was twice the amount
it would do no good unless it was in
circulation.-Salina Journal.
THE BEAUTIES OF KANSAS.
You think you'd like to see the
beauties of Central park, New York,
don't you? Say, do you know that
many of the people who stroll through
the famous park every day, never saw
a forty-1cre corn field, never enjoyed
the perfume of new mown hay, never
saw a sea of golden wheat, simmer
ing under the .beaming rays of a noon
day sun. never drank in the beauties
of a billowy. undulating ocean of dark
green alfalfa on a Kansas prairie =
Poor mortals-don't you feel sorry for
the people who have never seen Kan
sas ?-Concordia Kansan.