The Washington herald., 1913-09-01

The Oven-Glass banking and currency
bill, before the Democratic caucus or the
House for two weeks, is to affect the
safety Of every deposit in every BANK
no matter how great or no" sfnail.
Bankers and all other good citizens
who believe II is possible to evolve a
Inew and more responsive national bank
| ing system than we now have, are there
fore united in hoping that a good bill will
be passed, for the Legislation is vital
TO every depostor and infinitely above
party lines. 1t affects the happiness Of
millions Of people and the safety OF
many billions of values.
But in the process of public discussion
the men in every community who have
stood above all others for safety in
handling the peoples money-the bank
ers themselves-are catching slurs right
and left. Within thirty days an eminent
United States Senator has fouted the
idea that bankers should have any share
in managing the Federal reserve board.
He says, in illustration. that railroad
men should not run the Interstate Com
merce Commission, nor meat packers ad-
minister the food and drugs act.
He has overlooked the fact that the
Interstate Commerce Commission does
not run a single roalroad; railroad men
do that; nor does the food and drugs
act invade the working of a packing
establishment unless it is working
wrongly. But the Federal reserve board
will have powers of financial life and
death over the banks of the nation.
whether those banks are run we'll or run
poorly.
The Bankers Functions.
Who is this much distrusted person.
the banker? Every man may take a fling
at him without fear, for the banker
must hold steadily to his one task of
maintaining financial stability, even If
fools would fiddle while their own credit
burned. 1t is as dangerous as If passen-
gers were to throw Jumps of coal at the
hand of the man who is watching the
throttle
The banker is the man who caused a
little over S3,OOO,OOOOO0 in money in the
year 1872 to do S16S, 900, 10000 worth of
business in less than 100 clearinghouse
This huge total represents only frac-
tion OF the magical activity of the Ameri-
can dollar, for all the check transactions
Eof all the thousands of banks in small
Communities are omitted. Under the in
huence OF the banker, every dollar in
America is known to turn over more
than once a week, or ffty-three times a
year, and no statistcian can tell how
much more nimble II is
The deduction from the above figures
IS this: Without the banker and the
function he serves in a community. there
ness. If We all returned to a cash ba-
sis and could only use our money direct
~ we should be almost as badly off as
in the days of barter, for then only
those could buy and sell who actually
met each others needs. The money in
our pockets would be active only when
we saw something We wanted to buy.
and We might meet a hundred who had
things we did not want to buy, but who
were anxious TO sell. Whereas, under
banking conditions, the banker performs
second. almost magical, feat with our
He takes it. He lends II out to
they put 1t into channels of trade
q > not interest US at all. Our money
IN the world. yet never aIienated |
.. moment from rightful ownership. |
orking there to earn interest, some
IN comes back to US |
oney Values and Loans.
1uch-despised banker performs a |
agical function in our daily life |
ne gives money values to things that
could not easily be treated in terms of :
money without him. He lends on COM
mercial paped that may be based on any,
thing from bricks to boards, or from |
beef fat TO bills OF lading. Would the |
general run of depositors lend on gen /
eral merchandise? They could not dare |
the risk because the field would be new, |
But the banker knows that the chance |
for merchant to realize on many A bill |
Of goods depends altogether on the ac-
commodation he can secure, and hence !
the go and zip cf trade in every com, /
munity can be traced back to the banker |
and through him to the depositor who |
trusts him.
The banker maintains our wonderful |
credit system, making sure that for every
scrap of paper bearing the signs of money
there shall be an underlying value in
some material resource or another; or,
AS in the case of accommodation paper,
in the moral resource OF character. He
frequently lends on accommodat ton paper,
where nothing but the good name Of a
man stands between the money and loss;
yet the banker knows that goods are not
the only assets, and he counts millions
Of times on character. and wins his
money back. while the good man in a
pinch pays his little modicum of interest
for an accommodation.
The Problem of Congress.
Shut up the banks and remove their
functions Of trust and every line of busi-
ness would shrivel like Jonah's gourd.
Therefore, instead of our history proving
that the nation through its delegated
powers in Congress must step between
9O0Oo,00O people and 1900 bankers to save
the people, the problem for Congress is
the universal maintenance of confidence
in banks themselves, so that both they
and the people may be saved.
There is common phrase, They all
hook good when they are far away" Re-
verse this phrase and you have the atti-
tude toward the banker, They all look
bad when they are far away and good
when near" Look around our own COM
munity for the injustice OF all this |
doubling defaming attitude Who are its
most trusted citizens? The bankers and
their directors. It must be so. for no {