The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1912-12-08
BA LALitGNLE LAtGHLlN,
Professor i'osAsissi ECONOMY In inc
tpNrsah. oil lineage

n.ct.,,, - measures tog banking
reform Ina. d o. - a. MS puOl4c pO4CS
To q! U1s bis o. nv-r iasu-o u
an institution 4O4 n3-d -. - -Fits csP'-
tai. ana %. 10 .Ou --Di over Ai"h's
always Ass DeSi. 80 a4"s.- fnvUiu
o., q function . 90 <O.ei sssu 7t4'e-
There haa betr L.-.n sss~e thinking
on this lVp.a, "i-.- 80 o-- 9sh,-S' "u'
10 its asic 4l1i -~iies. ueniahns
clo..rness, penetra.4Vl t-'l goa sease'
by their ~ i,a-...,. 1aiiAs are
institutions Tor c0iI~----s dud Ioan-
ing capital 80 lone 90 raPital u
neeosaaIy 20 prOdueeiDL. anne renoer
an unn.. taxable ser.ts- - industry
Al! production requir~a capital. as
well q la.,Dr ana t.~ prOJuccr. the
lobber and tne lcsAi--s = constantly
III need u rap.tai 10 At4c .aDor' 10
help in tue rapid eAebansc ~ GOODS
TO extend thci. business, aid TO meet
maturing oblisai IJns while collections
arc coming In. therefore. all classes
In the lnoustg1a. world are as direct
ly dependent upvn banks for loans OF
CAPITAL as the lowing crops are de-
peAasut on TA3i. and SUNSHINE nat
kim OF -anklnE system We nave
Is, tnCu, OF direct concern, not mercy
TO bankers. bat TO all borrowers. TO
lIlOCuLGg5 anu AdOO4tsos $50 49,
system which entails injury always
hurts mort The man al the bottom
who mas The least means and the
least power OF resistance Banks ano
business men who borrow are con-
verse tcruls The borrowers could not
ext, Without banks any more than
bank could eAIst without BORROWERS.
Tn. ,wu so together.
Enormous Gsin N b5uh Deposits.
As the race has prosreSSed In all
forms OF social activity. the opera
lions Of banks have responded 10 this
proxress H. the rrat haIt II the
last century Ia thss COUNTY. ex-
chsnges OF goods vtre Y-riUrmed
either by primitive barter. u ~ pass
ms come form OF money az medium
OF exchange from the buyer 10 the
seller ,n.cks were little used. and
only IN the larger cities The uses
OF credit were very little developed
What L contrast with the business
methods OF to-day.
one vast exchanges Or soods-valued
NJ billions OF doliaTs-aTc performed
manly BY checks drawn on deposit
accounts in 'csnks No hzv, che goid
standard IN which contracts and
prices OF goods are expressed. and In
which our various media OK exchange
are directly 0. Indirectly convertible,
but gold Is seldom used a. d medium
OF exchange. We have gold and silver
certificates. greenbacks and national
pank notes. but the amour, Of the
transactions In goods performed BY
them 10 Insignificant a. compared "i'h
those performed by checks drawn on
deposits
4 glance over tho totals %: the
items for al national banks from 1886
10 the present day shows thai the in
creased business OF the country has
been met. not BY any significant tn
crease OF the note issues. bu; BY an
., extraordinary increase os the deposit
CURRENCY. T.. checks drawn on bank
deposits. While notes have risen from
about Ssce 0ea 900 10 $1,000 1eo.oep, de-
posiss have risen from $500. 600 TO
81, 400, 0o0. eeo. and the hgures fo-
banks outside the national system
strengthen this showing. for they is-
sue no notes. providing only deposit
currency.
sI5s.ooe, 900 Paid With Checks
But this is not the real comparison.
with the notes should Os compared
rot actual deposits. but the amount OF
checks drawn on these deposits. The
currency as medium of e.change
gan 90 approximately SIN "a Ia
amount c. clcarings. These usu..s
disclose the fact that transactions 70
thc amount % Owe. Styt.pcv.yus.uu"
are performed annually IL ihe Uniteo
States by the deposit- tGrrvHcy as "a
medium Of exchange. an ollie! words
modern business has created method
of exchanging goods oy INST express
ing their worth IN collars. OorfOw
in on their VAIN. thus tNsst - CO.
which sccoTd!n-iy appears go d dcp@ssf
account 10 the cTcUit - tht ..ot rowe.
and on which cn-ck ssc drawn 20 bc
used IN paying maturing osii-aft'us.
Thus. goods OF the VA sr".a tie pro-
Queer 70 IN, CONSUMER 81, cosD.s into
means OF paym cui-
Obviously. ;hcu. tho service hat
banks perform for the community.
apart from leaning. g. not merely that
Of issuing notes quite the contrary.
the function of issue Is less important
than the functions % discount 3n5
dposit In fact. the function % Issue
is rot essential 20 q modern bank IN
this country. Secsuee. by use OF the
functions Of discount ana DEPOSIT 81
can create an effective and really
elastic medium Of exchange tn its
deposit-currency. This evolution out
Of business experience. without any
help from legislation. has appeared
mainly In Great Britain and the
United states mot being 81 import
sncc Of the Coutiacnp. Our various
ststc banking Institutions do All their
susiu-ss-which is greater than that
OF national banks--without issuing
notes. The fact then is known TO All
that banking can. n necessary. b.
carried on without the issue OF bank
uotcr The superstition. therefore.
that the banking and monetary duss-
ton t. primarily one OF note-tssues.
OF % . specified quantity Of so-caiied
money IN any form, is clearly based