Year: 1873

From the Kentucky Yeoman.l


| We repeat, with emphasis, that the


system of banking as now practiced in


this country, is fraud upon the com


muuity, and should be checked by sal


utary legal enactments at once. If an


individual contract with another to
erect dwelling which is to protect the


occupant from the inclemencies of the


weather, and serve for all such other


purposes as are usual and as are desig-


mated in the contract, and receives his


compensation in advance upon the


good faith reposed in his engagement,


and his work turns out failure, he is


pronounced fraud. The owner, re-


posing confidence in the builder, did


not examine his materials nor his work


manship. The house looked we'll. and


so long as the weather was fair and it


was subjected to no severe test, thejob
seemed well done; but. when the storm
came, and the winds blew, and the


rains descended, the house fell because


the materials were Indifferent, the


work iii done, and the foundation


thereof was in the sand. So, with the


banks: they are not chartered to ena-


BILE the capitalists to make ten, fifteen


and twenty per cent. per annum upon


their money, but for purposes of con-


venienee to the community; q distri


button of capital upon principles of


equality and wise forecaste; a means


of security to those wishingpermanent


investment; and chiefly to prevent


that irregularity in finance which


would be likely to occur without some


organized system by which such mat


ters can be properly regulated.


Whenever bank becomes a mere


machine for the accumulation of wealth


in the hands of its stockholders, disre-
garding its higher functions and duties
as conservator of the public safetyin
times of financial pressure, itceases to
comply with its part of the compact,
which is thereby actually as well as
morally violated, and should be made
legally voidable as any other civil con-
tract Having failed in its purpose as
intended by the act which gave 1t exis-
tence, every day such an institution IS
tolerated there exists in our midst a
full fedged fraud upon the community.
If, in seasons of financial distress, the
banks but add to our troubles, 1t is
clear we had best get rid of them. In
seasons of prosperity we do not need
them to an extent which would Justify
us I'm nursing the pinion' which at
last ''impels the steel to our yitals. or
in cherishing the hand which in the
end is to deal us the death blow. Ifthe
action of the banks of this country
during the last month, and even at
this moment, be an index to the
principles upon which the system is
based, then, we say, away with such
a system and such principles of con-
duct.


There are now certain defined laws
trade, which have withstood
the long test of experience, and which
keep commerce in legitimate channel
in its relation to money. The products
of the soil and of industry generally
flow into consumption and export nat
urally; the current is steady and GER
tain, except when interrupted by an
concentration of money In
the hands of organized money -mer-
chants-whether you call them bank
ers, brokers, or by any other name
and there held idle. There is no ne
cessity for any more money in country
than amount sufficient to carry on Its
internal and external commerce. Any
more than this amount creates hctl-
tious value, and any less a correspond
ing stagnation in business. To pre-
serve a uniform equilibrium, and, by
careful study of the wants of the COM
munity, to encourage trade and restrict
speculation, is the legitimate
province of the great repositories of
the banks. Especially, under
a system of currency such as we now
have, is this duty easy and very neces-
sary. Within the limits of sound
the banks can regulate the
currency and keep the community sup
piled with enough and no more money
than is required But such n system
would also regulate the income of the
banks.


And here come the piuch. When
no crops are to be moved, and no spe
cial demand exists for money, it would
lie idle in the bank vaults, and the in
terest would be lost-therefore under
the system now in vogue, this money
must be lavishly issued on any semi
security, for the purpose of
gain or locked up in bonds, "-Or
by reckless and designing
the time arrives for the leg
itimate use of this money; then, it is
found to be all gone the banks have
penty of assets" but, alas no cur
rency.


Now, where is the currency the
banks ought to have on such occasions?
Whose duty is it to supply the eurren-
ey? Not the merchants, who has
placed all of his in the keeping of the
banks. Not the stock brokers'; for
he has no contract, express or implied,
with the people. But, plainly, the
banks; and the reason the currency
cannot be had is, that when it was not
wanted for the legitimate purposes of
trade, it was loaned by the banks to
every curbstOne broker who could
raise the collateral, for the sake of the
cent per cent; and, thus flowing into
the hands of INSCRIPTIONS schemers,
who, analyzing and taking advantage
Of the situation, locked up the cur
rency, producing scarcity and neces-
sarily depressing the value of st0cksor
other articles of commerce in which
they desired to speculate.


Thus it is that the banks play into
the hands of the brokers, and for the
sake of an extra dividend of or per
cent. per annum, recklessly abuse the
of the people in order to
enrich themselves, regardless of conse-
uuences so long as they are safe, or so
long as they believe that they are ad-
ding to their income. Causes and
reasons for a panic may here be found;
and more people are eognizant of these
causes and reasons than are willingt to
let their knowledge be known through
fear of those autoerats OF the bank
vaults. Those who have no such fears,
express their opinions BY Withdrawing
their deposits. These are the panic
but often wisest of the whole
throng.