El Paso herald. (El Paso, Tex.) 1901-1931, 1910-02-19
4 COUNTRY Of
CHECKS; NOT
CASH
National Monetary Commits
sion Gathers Statistics of
How We Pay Our Bills.
AN ELEMENT OF
DANGER IN 1T

Washington, D c., Feb. 19.-The ire
mendous extent 10 which checks and
! other credit instruments take the
place of cash in the ordinary business of
this country, and the financial questions
and problems growing out of the phe-
nomenon ara discussed interesting
| fashion in tho latest of the monographs
/ of the national montary commission, TO
| be issued in a day or two. This mono
graph was prepared for the commission
by DR.. David Kinley, of the university of
illinois, and appears under the title. THE
use of credit instruments in payments
in the United States"
The fact that the use of checks
against deposits renders unnecessary a
large amount of money, or currency"
says the author at the OutSe;, attracted
attention early in the history OF deposit
banking, and efforts have peen made
from time 20 time TO determine the pro-
portion OF money, or currency, replaced
with checks and credit documents of
similar character" He describes the pur-
pose of his inquiry as having been two
fold: First, Ito find a pasis for esti-
mating the proportion of business done
by means of credit paper, or the volume
OF exchanges settled without the direct
use of money or currency-fn other
NVAASs the bO4uElS OF money WHICH CEeOIl
2strumentS enable the country to dis
ense with, and, therefore, indirectly, the
olume of money which the country
needs" and, second, ito shea light on
the effect of credit exchanges on the
value of money, or the price level
DR.. Kinley in sending out series OF
interrogatories. extended the list of
tate banks. loan and trust companies,
private banks. and savings oanks- The
date on which these banks were request
ed TO report their retail deposits was
March 16, 1909. Replies We're received
from 1876 institutions, of which 1851
were national banks, 1850 s:ate banks.
759 private banks, 432 loan and trust
companies, and 794 savings banks.
The aggregate retail deposits reported
for all the institutions where the blanks
were made out properly were S60.446, 1872. !
OF this amount, S44,79,29z, or 1872 per-
cent, were in credit documents, as against
67-4 percent IN 1895; sI5,3Ii.55O. or %
percent were in currency; ana 81, 1852. 7SO,
or rs percent were in specie, pretty even
" divided between gold and silver. The
largest volume of deposits was IN the
returns Of the national banks. where the
percentage Of checks was 74.7, the high
est shown by any class or banks
The aggregate amount deposited by
retail dealers in national banks on the
day in question was S2S,6z3, leg. Of this
total, $2S,s46.I02 or 74.7 perceny, was in
currency; and s1,710,3sS, or ~ percent.
in coin.
The retail deposits of the state banks |
aggregated s15.527. 047 from 1888 banks. |
The checks amounted to s1U.SSS, 663, or
20 percent, as compared with 74.7 per- !
cent of the national banks. The currency |
amounted TO S3.67S.5TS, or 25.S percent; |
fhQ cnoNia u SQEQ S06 oil 4
most equally divided between gold and |
silver.
Taking up the table of aggregate re- |
tail deposits for all classes OF banks, it |
appears that the average of 1872 percent !
for checks deposited by retail dealers is |
not far from the average in most of the |
states.
In a concise summary of results and |
conclusions, DR.. Kinley says IN part:
"A large proportion of the business |
Of the country. including che retail trade, |
is done by means of credit Instruments. |
We are justified in concluding |
that so or so percent of the retail .trade |
Of the country is settled In this way.
Over 80 percent of the wholesale trade |
is done with checks and other credit in
struments.
1.-THE use of checks is promoted in a !
measure by the payment Or wages in
checks. OF weekly payroHs reported by
the banks, aggregating S134, 100000 Tor
the week ending March Is, 1903, 10 per-
cent was in checks.
1.-The transaction of so large a volume !
of our business by checks in an element
of danger in times of stringency and /
crisis. In such times che uncanceled
balances of credit transactions creates /
larger demand for money. but the habit |
Of settling by cheek has meantime Kept
the available amount of money at
minimum.
Consequently there ough; 20 be some
means of supplying additional currency
when credit as a means IF payment d.
minishes.- This currency ought 70 be as
safe and as uniform as the ordinary
currency, and it should oe capable or |
being quickly emitted and recalled