Grant County herald. [volume] (Lancaster, Wis.) 1850-1968, 1907-11-30
CITY BANKS TO BLAME.


paying out currency freely and
manufacturing and constructive
operations, which had been curtail-
ed or entirely stopped during the
period of shortage IN ready cash,
resumiEg business all over the
country, it is we'll to take look at
the causes which brought about so
suddenly and unexpectedly the con-
dltions which we have been facing
for the past four or FIVE weeks.
The great city banks are very
largely to blame for the suits that
have come TO the Northwest and
the country at large III this matter.
In most of the large centers, parti-
cularIy in Chicago, it would seem
that the very things which tended
to weaken the confidence of the
public IN their own stability, TO
withdraw money from circulation
and to incite boarding, they have
done. Further than this they
practically abdicated their functions
as banking institutions. Such banks
had no more right. if solvent, to re-
fuse to honor the checks of their
customers or to pay out currency
thereon, than the cashier OLA
private business would have to
walk off with his employers money
in his pocket and refuse to give it
up. Moreover, money is just as
much boarded when it is kept in
the strong box in bank as when it
il secreted under a floor and kept
IN a stocking. The function of a
bank is not simply that of a safety
deposit vault. One of the chies
services 1t renders is In providing
the machinery by which the circula-
ton Of money is accelerated, and
through which. by the use of a
comparatively small amount of
currency q great volume of bust
ness can be transacted. This work
the city banks declined without any
apparent warrant OF law or justice
C. do when it was most important
that it should be done and done
promptly aad without hesitation.
Instead of maintaining confidence
they took a most effective method
Of undermining it.
For there could be but one lesson
taught TO the bank depositOr whose
bank refused to honor his check.
II. was warning to him that If he
had any use for the currency TO hold
on 10 it. The action created dis
trust in the minds of many people
who otherwise would have given
No thought to financial matters at
all. The surprising thing is, and
one that speaks volumes for the
good sense of the people, that it did
not result in a run upon the banks
which adopted so extraordinary
course.
The result of the action OF the
city banks has not been merely local
to the cities, either. The refusal of
the banks to honor demands for
currency made by country banks
which maintained standing credits
there, caused much EN- barrassment
to business in many parts of the
northwest. Because of it farmers
In many sections were unable to
get real money for their grain or
stock, to pay their bills or to pur
chase their supplies. The result has
been that some merchants have had
difficulty IN meeting their obliga-
tiOns and the money which would
have other wise flowed INTO the cities
has been shut off.
Country banks, being unable TO
get currency from the city banks,
where they were up against the
same conditions as the local deposit
tor, we're forced, for their own
safety and protection TO use the
utmost care in the cashing of checks,
so as TO keep on hand sufficient
amount OF cash to take care of their
own depositors and meet the local
demand for currency. To their
credit be it said that they met the
situation with great discretion and
strengthened the confidence Of the
public ia their stability and their
desire to meet the requirements OF
their customers with SIS little in
convenience - the circumstances
would permit.