Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1908-07-03

pansion that ultimately became dan
4 gerous.' While this situation of the
national banks is bad enough, it is
made infinitely worse by the unpar-
alleled increase in the number of
banks and trust companies organized
under state laws, and with lax re-
serve requirements. These institu-
tions by offering big inducements to
depositors steal the business Of the
national banks. As evidence of this
fact, compare the banking institu-
tions Of New York and Brooklyn,
and see where the business is going.
Individual deposits In New York
and Brooklyn. In millions of dol
lars)
National banks, 1906 65s.3;; 1907,
COOS Decrease 52.5.
State banks, 1906, 1923; 1907, 1868.
Increase, 1872.
Savings banks, 1906, 921.1; 1907,
962.6. Increase, 37.5.
Loan and Trust, 1906, 1908; 1907,
y o4U.4.z increase, 0S.6.
Total 1906, 1929.
Total increase 1903.
Total decrease 525.
And yet, while stealing the bust
ness Of the national banks, the bur
den of two-thirds Of the entire money
reserves is carried by the material
banks.
Money reserves. Millions Of dol
lars. 7fs5
Bank 1906 1907
National &. !. y. 1890. 2275 234.6
State !. !. ,f4. !. 54.6 $50
Savings /. I. 3. q. ga GA
Loan and trust 4. . !. SO. 4 56.S
ss AS mentioned before, the period
1960-1907, state banks and trust com
panies expanded their total liabili-
ties by by 5000, 0OO, 900. AT the
same time they increased their cash
resolves $171 600, 900, or less than
3 IL per cent. And during this time
the national banks expanded $440,-
600, 900 with not much gold back Of
4 them. Yet gold Is the test Of solr-
ency in the world IS markets. Hence
i we see that colossal house OF cards
we have been building. And, as Co
nant well says, we had no central
refuge" as our neighbors all have.
Compare ourselves with foreign
countries and see where we stand as
regards the coin reserves held.
On or about June 80, 1906:
Imperial Bank of Germany, circula-
tion outstanding, $412, Oo0, 900; De
posits $40, 900, 900; coin reserve held,
$211, loo, 600.
Bank of France, circulation out
standing, s9Os, 800 600; deposits, 1885,
100000; coin reserve held, $8O3. 400
600.
Imperial Bank Of Russia, circula-
ton outstanding, 1891 900, 600; depos-
its, s1O9, 300, 600; coin in reserve, $455,
SOC, 600
Bank of Englan, circulation out
standing, S146, 800 900; deposits, $3.50,
300, COG: coin reserve held, $1s7, $780,
900.
Twenty European banks, circula-
ton outstanding, 1885,, GOO, 600; de.
posts, 81 100, 4o0, 600; coin reserve
held, s.. 525, 900 900, i. g. 81 per cent
of demand liabilities.
1877 u. S. National banks, circula-
ton outstanding s517 300, 600; depos-
Its. $5,s9S 100000; coin reserve held,
1854 400, 900, i. e. Z per cent Of dea
mand liabilities.
Enough has been said to indicate
clearly our tremendous expansion OF
y credit in the last few years. When
the crop moving demands OF last
October came on, the system broke
down and the periodic smash.up hap
pened.
Lessons of the Panic.
81 There are three lessons to be learn
ed from this panic.
4, Reserves. Our national bank
legal reserves from wonderful sys-
i tenn OF mutual props. And as a
/ system It is truly one OF the greatest
banking absurdities Of the civilized
world Take typical case. Here is
national bank in Fargo, say. It
must have reserve Of is per cent.
But 1t may keep 8 per cent In its
vaults and deposit per cent In the
reserve cities. Accordingly IL depos-
Its most Of It's reserve in St Paul.
So Paul must have 25 per cent re-
serve, counting Of ccure your Fargo
deposit, but ST Paul may keep IL AZ