The Southern Mercury. (Dallas, Tex.), Vol. 10, No. 42, Ed. 1 Thursday, October 15, 1891 Page: 3 of 16
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Oct 15,1891.
SOUTHERN MERCURY.
3
TOE NATIONAL BANKS.
Their 8olvenoy Depends Upon
Their Ability to Collect Money
Secured by Personal Notes
and Chattel Mortgages.
GEORGE C. WARD.
Below please fina a state-
ment which, while worthy of pub-
lication as a matter of interest to
the public, is also an appropriate
text from which to preach a ser-
mon in relation to "The best bank-
ing system the world ever saw."
It gives the condition of the na-
tional banks of the United States:
Treasury Department, )
office of V
Comptroller of the Currency. )
Abstract reports made to the comptroller of
the currency, showing the condition of the
national banks of the United States at the
close of business on Monday, the 14th day of
May, 1891.
Number of Banks 3,633
resources.
* Loans and discounts $1,956,632,539 34
^Overdrafts 13,213,840 83
«•U. S. bonds to sccure circula-
tion 140,498,40) 00
U. 8. bonds to secure deposits.. • 27,954.500 00
U. 8. bonds on hand 3,768,850 00
«Stocks, securities, judgments,
claims, etc 122,333,707 66
«Due from approved reserve
agents 180,004.721 68
«■Due from other national banks 112,500,098 73
Due from state banks and bank-
ers 28,172,651 23
«Banking house furniture and
fixtures. 68,011,015 13
«Other real estate and mort-
gages owned 12,863,908 45
«Current expenses and taxes
paid 11,405,934 04
Premium! on U. S. bonds 14,960,592 48
«Checks and other cash items... 17,602,4V7 69
«Exchange for clearing house.. 1:6,447,384 31
«Clearing house loan certificates 120,000 00
«Bills of other national banks.. 20,456,257 GO
Fractional paper currency,
nickels and cents 830,198 62
Specie viz:
Gold coin $82,891,098 98
Goldtreas. cevt's... 75,314,460 00
Gold cl. hs. cert* s... 6,424,000 00
Silver coin, dollars. 7,448,417 00
Silver treas. cert's.. 18,272,781 00
Silver coin, fractn'l. 4,588,654 33
184,939,411 31
Legal tender treasury notes 96,375,247 00
U. S. certificates of deposit for
legal tender notes 11,515,000 00
Five per cent redemption fund
With treasurer 6,158,960 87
Due from treasurer other than re-
demption fund 729,226 36
Aggregate $3,167,194,901 17
liabilities.
Capital stock paid in $667,787,406 15
Surplus fund 222,49t,"&83 46
Other undivided profits 101,ft >2,654 66
| National bank
notes issued $125,646,865 00
Amonnt on hand. • ,2,198,232 0)
Amount outstanding 123,447,633 00
State b*nk notes outstanding.... 74,117 50
Dividends unnaid 2,104,185 #8
Individual deposits 1,575,506,099 18
U.S. deposits 24,411,6-6 10
Deposits of U. S. disbursing offi-
cers 4,781/45 79
Dne to other national banks 277,560,322 78
liue to state bank and bankers.. 142,455,768 77
Notes and bills redlscounted.... 16,604,735 21
Bills payable 8,482,342 68
Clearing house loan certificates. 285,000 00
Aggregate $3,167,494,901 17
fThe amount of circulation outstanding at
the date named, as shown by the books of this
office, was 170,079,790, which amount includes
the notes of insolvent banks, of those in volun-
tary liquidation, and of those which deposited
legal tender under the act of June 20, 1874, and
July 12, 1882, for the purpose of retiring their
circulation. E. S. Lacey, Comptroller.
The first task in hand is to ascer-
tain from the above bewildering
and intricate array of figures just
how much cash and cash items the
banks really had on hand on May
4th, 1891. In order to arrive at
the facts in the case we must cast
out from the items under the head
of resources all duplications of
figures which do not represent re-
liable assets. As for instance,
what the banks owe to, or have
due from,each other are irrelevant,
as these items must be paid out of
cash in hand. The items marked
with an asterisk, thus *, are dis-
pensed with as irrelevant items.
The items not thus marked, which
may be considered 'as cash items,
foot up the sum of $385,404,639.
Of the items marked tus *, "Unit-
ed States bonds to secure circula-
tion" is all absorbed but $3,040,-
927, by ' 'outstanding notes in cir-
culation." Stocks, securities, etc.,
are not in any sense cash. "Due
from approved reserve agents," is
included iu the cash held by such
national banks as act as reserve
agents, as is also the case with the
item, "due from other national
banks." So far as the item "due
from state bank and jjankers," is
concerned, the national banks
owed state banks and bankers
$114,283,115 more than such banks
owed them, which almost absorbs
the item, "stocks, securities, etc."
The other items under the head of
resources are simply representive
of business transactions among
banks themselves, carried on al-
most altogether in ckecks, and in
no sense stand for cash in hand."
Summed up, we may say that
the banks had on hand, in round
numbers, as "available cash as-
sets," the sum of $400,000,000, or
about 25 per cent of the amount
dtie to individual depositors.
Now take a glance at the other
side. The banks owed to the
United,States and to individual de-
positors,the sum of$1,604,698,751,
or $1,204,698,751 more than the
whole of their available cash as-
sets. Included in the item
"loans and discounts" are the
items "surplus funds" and "undi-
vided profits," as well as the $667,-
787,406 "capital stock paid in,"
the whole amounting to $991,781,-
943. Now what I want to arrive
at, or the question I propound is
this: Where is the balance of $1,-
204,698,751 due depositors, and
the $991,781,943 to come from? Of
course the answer, and obviously
correct answer, is this: "Out ot
of the item 'loans and discounts'
amounting to $1,956;632,539."
Ab, there! You who ridicule and
belittle the monetary demand of
the Cincinnati platform, who spout
so grandiloquently about "correct
principles of finance"—See here.
Do you not perceive that the only
security that depositors and stock-
holders in national banks have for
the vast sum of $2,186,480,694 is
personal notes and chattel mort-
gages upon personal property?
You who frantically howl thatsub-
treasuryites want to convert the
United States treasury into one
vast pawnbroker's shop, go you
ever realize that your eulogized
banking system consists of a choice
selection of pawnbroker's pledges?
There is absolutely no cash behind
our national banks—nothing but
personal notes and chattel mort-
gages. It is indeed a shrewdly
conceived and infernally adjusted
system of spoliation and robbery.
There is, perhaps, in the hands of
the people,the sum of $550,000,000
not including bank reserv s. This
amount the national banks
have loaned out to the tune of $3.65
for each dollar in existence. In
addition to this, savings, state and
and other banking institutions have
loaned the same money t>ut to the
tune of $5.60 for each dollar in ex-
istence. That is to say, upon each
dollar in the hands of the people
the banking institutions have
based $8.25 of their own credit,
and are loaning such credit to the
people at an exhorbitant rate of in-
terest. Is it any wonder times are
hard, when $9.25 of debt must be
paid with one dollar in money?
Now note this fact: If the 3633
banks making the above statement
were United States banks—nation-
al in fact as well as in name, with
each official a bonded employe of
the people—depositors would have
not only personal notes and chat-
tel mortgages as security, but $60,-
000,000,000 of national wealth,
and the nation's soverign preroga-
tive to coin, stamp and issue mon-
ey. God speed the day.
Just Our^Position, Exactly.
The following from that staunch
advocate of the people's rights,
the Atlanta (Ga.) Alliance Farmer,
has the true ring about it, and
states our views exactly of the
line and limit of other Alliance
journals:
"The Alliance is a non-partisan
organization—a band of farmers
taken from both the old political
parties, and their mission is to
right grave and long standing
wrongs, to which their class has
been subjected, and that are grind-
ing them into poverty. It is also
an accepted fact that these wrongs
can only be righted through con-
gress, which forces Alliancemen
into politics. For more than a
quarter of a century the people
have been begging the old parties
for relief, but their appeals were
unheeded. The democrats always
placed the blame on the repub-
licans; but when Grover Cleveland
was elected president, he refused
the only measure of financial relief
tever passed by both houses.
Now suppose that southern Alli-
ancemen waive their demands and
vote the democratic ticket, while
our northern and western brethren
proclaim that they will stand by
the republican party with which
they have so long affiliated? Could
the Alliance then hope to accom-
plish any great measure of reform?
and would they not as well disband
their organization, confess that
their platform was an unreasonable
scheme, and be content to remain
the hewers of wood and drawers of
water for the favored classes? Would
they not as well trample under
foot our great principles of "equal
rights to all and special privileges
to none," and inscribe on their
banner in itE stead, "a government
of the masses for the benefit of
the classes."
We are an Allianceman, and
have been honored by our organi-
zation with the responsible posi-
tion of editor of their state organ.
We were not elected as a democrat
or to defeny democratic principles;
but were chosen as an Alliance
man, with the Ocala platform as
our sole guide. We endorse every
syllable line and letter of that doc-
ument; and until the national Al-
liance convention convenes and re-
pudiates these demands, we pro-
pose to stand by them and fight for
them. We would be a traitor to
the cause that we espouse, and re-
creant to the trust reposed in us,
did we fail to do this, or waver in
the fight we are making.
We are placed at the helm of
this paper to battle for the Ocala
platform, and this we intend to do,
though the heavens fall. All the
persuasion and the arguments that
the outside world may bring to
bear will not change us one iot or
tittle.
It would be highly gratifying to
us if a coalition could be formed
between the democrats and the
Alliance and the old party restored
to its pristine purity, which is
genuine Alliance doctrine. But un-
til that coalition is formed, we
know no party and no platform ex-
cept the one formulated at St. Louis
and re-endorsed at Ocala.
What right or authority have we,
as editor of the organ of the State
Alliance, to repudiate their plat-
form, and say that we will abide
by the democratic nomination,
even if our plans are ignored?
With such a declaration from an
official Alliance paper, *ould it
not be discouraging to our brethren
in the West, who have already
shown their faith by their work?
No, so long as we are at the
helm of this paper, our compass
will point straight to the Ocala
platform, and it shall not deviate
to the right or to the left until the
Farmer's Alliance, in convention
assembled, direct us to change
it."
....
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Park, Milton. The Southern Mercury. (Dallas, Tex.), Vol. 10, No. 42, Ed. 1 Thursday, October 15, 1891, newspaper, October 15, 1891; Dallas, Texas. (https://texashistory.unt.edu/ark:/67531/metapth185434/m1/3/?q=%22Business%2C+Economics+and+Finance+-+Journalism%22: accessed July 17, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; .