The diamond drill. (Crystal Falls, Iron County, Mich.) 1887-1996, 1912-11-16
The Money Trust"

Trust not in the technical sense of
the term, but in a community of inter
est among few powerful financiers.
Ii is natural and inevitable outcome
of our detective banking system. The
way 20 smash the trust IL by reform
ing the system
Thirteen banks in Chicago and New
York, at recent date, carried in their
vaults $50 millions of dollars in cash
80 millions being in three Chicago
banks. and 800 millions in ten New
York banks All the rest of the %, 600
banks in the United States carried only
little more than a billion Of dollars
The thirteen big banks, in other words.
held one fourth of the banking reserves
of the nation.
The figures are even more startling.
when you consider the concentration of
reserves in New York alone. The
banks there have more than half bill
lion of dollars in their vaults-one-
third OF all the money in all the banks
OF the country.
This condition has given rise to the
popular belief in Money Trust
IL NAV be maintained 10y some that the
few hnanciers who exercise the greater
part OF the vast power this money con
fers have for the most part, manifested
prudence and justice. But their power
has not always been wisely exercised.
They are answerable only to themselves
as TO the use they MAKE of it, They
are under no Governmental restraint
nor supervision.
The explanation for this huge piling
up OF cash in New York is TO be fond
in our reserve system. Each bank is
required to keep a certain proportion
OF cash to it's liabilities. But it need
not keep all this cash on hand The
law provides that country banks -
those not in reserve or central reserve
citiesm may redeposit three. iifths of
their reserves with city banks and
that reserve city banks may redeposit
one. half their reserves with central re.
serve tanks in New YORK. Chicago
and ST. Louis. The money 40 rede-
posted is payable on demand. The
provision is that the country bank, for
instance. may get it's reserves back
promptly wnen it asks for them.
Now, New York banks pay two per
cent on such deposits. The country
banks send their money, either directly
or through city correspondents. to New
York. in order that 1t may earn this
two per cent instead of lying idle in
their vaults
But the New York banks cannot put
this money out In time loans, because
they do not know when demand Will
be made for IL. The only market
where they can utilize ID. 40 az 10 MAKE
It earn the two per cent they are pay.
ing for IL and margin of profit for
them. Is the call loan market And
the only class who customarily borrow
money ION call are Stock Exchange
spectators.
0o NhnN Aht itlt VI our
flow naturally into Wall Street, to be
used there in speculation. The "Mon-
ey Trust has it's lair IN Wall Street.
II Will continue TO exist, and to use It's
vast power mot always wisely Just 50
long as we ontinue our present bank
ing system.
Il may as we'll be said here that the
Money Trust is rot a product of the
twentieth century. 10 is almost as old
ms time. History shows that nations
have talked about money trusts al
most ever since we began 10 use money
In exchanging our commodities, in.
stead Of bartering them. Apparently
the Money Trusts" mouth is no big.
ger it's teeth no sharper, it's appetite
no hercer and its blood Sucking ten