Western Kansas world. [volume] (WaKeeney, Kan.) 1885-current, 1907-11-16
THE REASON WHY.

every farmer to stand by the
banks in their effort to check the
panic which started in New York
as the result of gambling in
stocks and threatened to sweep
over the country and create
more ruin and desolation than
fire, flood, hail. and diseases of
livestock combined. The article
was written in haste just as we
were going to press, and we now
take time to tell our readers
why we consider it of the utmost
Importance that they stand by
the banks in this crisis
The first impulse of the man
who was prohibited from draw
ing out in the form of cash more
than a mere pittance of his bal
ance in the bank would be to say:
| Can't I do what / please with
my own? 1t is my money and I
am entitled to it when / want it
and as I want it, whether in the
form of gold, silver, paper, or
| drafts. What business has the
banker or any other man to say
to me how I shall manage either
my business or my earnings?"
From one point of view the
answer would be yes; a man has
an absolute right to do as he
pleases with his own, but every
other depositor necessarily has
the same right. Inv other words
one man has just the same rights
and no more that has every other
depositor. A moments consid-
GRAFTON, however, will convince
any man that no bank ever has
or ever can have money enough
on hand to pay all it's depositors
the same day or even the same
week. If it had that power it
| would not be bank at all, but a
safety deposit company; and in
stead of caring for your deposits
gratuitously or paying you
interest on time deposits. it
would be compelled to charge
you for it's services as safekeep-
er of your cash. The theory on
which banking is done is that all
the depositors will not want
their money at the same time
The law recognizes this by pro-
viding that banks must keep a
certain reserve fund in cash, Is
per cent in one class of banks
and 25 per cent in another, it
having been found by experience
that under ordinary conditions
this is ample and that the major
ity of the depositors do not want
their money at the same time. A
bank could not exist unless it
could loan it's deposits.
The banking business is also
based on the theory that the de-
positor will not want his deposits
all in cash but will use checks
and drafts. In fact, from 90 to
90 per cent of the business of
the country is done not with
cash, but with checks and drafts
which take the place of cash. IF,
therefore. through panic the de-
positors demand all cash and all
at the same time or within a few
days, they simply rendered
banking impossible. If allowed
to have it they would put the
business of the country back
two hundred years. and would
not only break the banks, but, if
the policy was general, would
bankrupt the business of the en-
tire country, their own included.
| Furthermore, there are always
more deposits in the banks of
the country than there is money.
We pointed out some time ago
/ the Righteousness of the state
ment made by the daily press as
to the amount of money deposit
ed in the banks of Iowa, giving
it, as we recollect. as some two
hundred dollars per capita. We
have no doubt there was the
amount of deposits stated, but
that did not represent cash paid
in, but credit, and subject to
check the same as deposits of
cash.
1t should be borne in mind
that banks do not primarily deal
in money but in credits. To IL
lustrate: If a farmer goes to a
bank, borrows 81 900 for ninety
days at per cent interest from
maturity, and places it to his ac-
count, the deposits of the bank
have increased $1,000 and so
have the bills payable, but there
is not cent more money in the
bank than there was before