The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1935-03-14

An rights Of republication Of all other
matter herein are also reserved.
Cracking the Banks
Attacked on all sides as they have
been in tho last few years, the ma
tion5 banks apparently have not yet
felt the full effects Of the nut cracker
n which they have placed them
selves.
Two widely separated actions serve
. Illustrate the fact. One was the
Seoent action Of the treasury In call
Ing IN $675, 100000 In federal bonds to
b redeemed with the profit" made
1tum devaluing the dollar. The other
was the action Of the North Dakota
legislature in reducing the legal In
teEest rate to seven PER cent.
The governments action has been
vaxiously interpreted and may mean
much o. nothing - 70 future policy,
but Of one thing there can b. no
doubt That = the fact that It was
responsive to attacks now being made
a the national banking system.
Enemies Of the present set-up point
WIN great clamoe 70 the fact that
ths national banks can deposit bonds
With tho treasury and obtain IN re-
turn for them currency IN an amount
equal TO the honda The bank has
~ uDs Of the mousy and also draws
1utseest on the bondA A very neat
ax1angement-Soe the banks-and the
long-sought answer 10 the problem Of
how can one ct his cake and have It,
TOO
What the propagandists fan TO
mention. however, = that not III out
standing United States bonds can be
20 deposited. The law permitting
this action has limitations, else We
should have Millions more currency In
circulation than = tho case today.
The privilege = not % widely used O.
the uniuitiated aro asked 10 suppose.
Nevertheless. ths principle involved
has taken hold Of tho imagination Of
many people. They go IN the ar.
Sansement IN unfair advantage Tor
the banks and there has been very
vocal objection 70 the system, par
ticularly during tho hast month q %
when tho argument over the various
types q bonus payment bills has
wsxed hot eo-called preferences
granted the bankers have had . very
nal part Ia that debate and has made
taae country conscious Of the alleged
ebuGo.
Add to this the claim that the gov
sEument Is trying to set up within
H. framework Of the treasury and
ts,e present federal reserve system q
bank q the United States, as de-
aaAnded Ia numerous bills now pend
mg In congress, and It Is plain to be
seen that the banks are not 5aring
Wou nationally. It Is probable that
further events win see their peivi-
lGees restricted rather than increased.
Ths drop IN the North Dakota legal
interest rate = Just as significant.
Were # . strictly local affair It would
not mean much, for we play . very
small part In the nations financial
drama, but It Is more than that. It
= IN indication Of q trend which, ex-
tended to other states. has the effect
ef reducing tho banks income on the
money loaned By It.
Thus the banks are caught between
~ governments upper millstone and
H. lower ons controlled By the bor-
SoWee.
The national financial situation IS
~ n which even siEilled finauciers
md themselves lost In . fog Of 5is-
wes ana conflicting policies, but
nearly everyone can understand the
condition created BY our local action.
~ reducing the opportunity for
profit, The banks ays forced into even
moro conservative practices than they
have been pursuing these past years.
When interest sates are high they can
afford 70 take . wee chance now aud
then. but when they ere low there Is
no point to Il.
Hence the man who fesls that he
Vim b ah1e % borrow more claeaply
b reason q the lsgislstsres actiou
may msroly ind that hs cannot bor-
row q "a. Even - Il =, the claim
= being made that The only persons
VINO can poerow money now ore those
W1,o % not nsed % borrow Il. Undes
- nsw statute thu situation may h
uogDe.
Whsss aae whole basinsas Win snd
- - man en- ~, 5er H. outcome
IN = q thu 1na1ring. Only . return
Dl nj prosperity Vim eliminate ths
ot-Ga1ooting q the financial system
~ o. thing = esftain. and that
RI Int IL bankefs axe aslEing 40
upatlu and expect mona. They
- H. habdt q taking care q
1neslvaS. Thass vho would Ghaaes
skA