The Bismarck Tribune Newspaper, March 24, 1923, Page 6

PAGE SIX ee ene 8.4) BANKING POWER , A modest paragraph: that appeared in the annual report ot the Comptroller of the Currency, just issued, puts the “banking power” of the United States in 1922 at $50,175,000,000 against $24,- 341,000,000 at the beginning of the war, $10,685,000,000 in 1900, $5,700,000,000 in 1890, and yin $2,141,000,- 000 in 1870, Our share of world bank- ing power is now estimated at approxi- mately 50 per cent, against 27% per cent in 1870. Our banking power in 1922 is more than double that at the beginning of the World War, What Banking Power Is What is this mysterious something which we call “banking power” and the equally mysterious and even less | tangible economic factor which we call “credits” which ate closely re- lated to banking power? “Banking power” is usually defined as the sum of paid up capital, reserves and sur- View of Wall Street Reading from the right, Trinity Church, | may with safety to their depositors as well as. to themselves loan out a certain percentage of the deposits placed with them, and it is this coms bination of capital, surplus, circula- tion, and deposits which the business world recognizes as “banking power.” Just what proportion of this grand total of “banking power” is actually loaned out by the banks cannot be stated in exact terms, though the fact tflat the loans and discounts of all banks in the United States in 1921 approximated $30,000,000,000 at a fixed date, June 30, as against $48,- 000,000,000 of “banking power” at the same date, at least suggests that ap- proximately two-thirds of the actual “banking power” is in the form of loans and discounts which form the “life blood” of the actively moving industry of the country, New Stock Exchange extension, J. P. Morgan & Co., directly in front of Stock Exchange. Extreme left, National City Bank plus, note circulation, and deposits of This assertion that the loans and THE BISMARCK TRIBUNE \ ‘ : > j How the United States has ane to control fifty per cent of the Banking power ’* of the world, and what this extraordinary expansion means. Credit Currency. Upper left, a promissory note. Upper right, a bank check. Lower left, a bill of exchange. Lower right, a bank draft. seasons and it is far more convenient and inexpensive for him to borrow this money at interest when he needs it than to keep it in hand for the few comparatively brief periods of the year in which he needs it for cur- rent operations. Other producers of domestic materials, the mines, the forests, the fisheries, find it necessary to borrow at certain seasons of the year when the demands upon them are above normal; the railroad and other transportation facilities must borrow at times to meet the unusual demands upon them in traffic activi- ties, needs for new rolling stock, and increased compensation for employees. In manufactures, however, perhaps more than in any single industry bor- rowing, the use of money obtained by temporary loans, is an absolute _re- quirement of successful business, Raw materials, which are largely, the prod- uct of the farm and mine, must be bought, chiefly at home but consider- able quantities abroad, workmen must be paid with promptness and regu- larity, manufactures turned out must Banking Power and Industry : With the life blood which loans have given to these industries, the United States has become the greatest manufacturer and greatest éxporter of the world. The people who habitu- ally borrow such proportion of their financial requirements as circum- stances may suggest, know the pro- cesses by which louns can be made from the banking power, on stocks, bonds, or other similar securities, notes, “acceptances,” etc., and so the flow of money into and out of the banks keeps the wheels of industry and business moving. Even this vast “banking power” of $48,000,000,000 and actual loans and discounts of something more than ,000,000 does not by any means measure the total value of all the cir- culating media of various sorts con- stantly passing from hand to hand among the people of the United States, This real circulating medium includes the checks, drafts and other pieces of paper by which business men transfer from ‘hand to hand _ their cash but informs him that the sum in question. stands to his credit in the bank and he may check against it as he may desire. He draws checks in peyment of the various sums which e desires to pay, sends them through the mails, and the recipient at his con- venience passes thm into the hands of his own bank or utilizes them in mak- ing payments in his own business transactions, and when they get back to the bank on which they were drawn several days later they are charged against the balance created by the loan and represent just that amount of business transacted. In very recent years in which banks have multiplied and the use of the telephone and auto- mobile has put the farmer in close touch with those with whom he does business, the use of the check in the agricultural regions has greatly in- creased, Importance of Credit Currency The bigger the transaction the more certain it is that it will be temno- rarily represented by acheck or other STATES originally drawn, and the there dif- ference supplied in cash, * 2 So it turns: out that an extremely large percentage of the actual day- to-day business of the country is transacted by the use of checks, drafts, bills of exchange and other forms of “credit currency” and a very small per cent in actual cash. Studies made by the United States Comp- troller of the Currency, twenty-five years ago indicated that apparently 90 per cent of the transactions in the cities and larger towns then occurred in the form oi credit currency and it is probable that the proportion is now much larger, perhaps 95 per cent. Since the outbreak of the war there has been an enormous increase in the use of credit which has resulted in more or less inflation throughout the entire world. It has not increased “wealth,” but has lent itself. to the increase of banking power. Through all of this, the position of the United States has. been sound, and today we represent approximately 50 per cent of the banking power of the world, as against 27 per cent in 1870. The use of this “credit currency” consisting of checks and other pieces of paper utilized in the payment of day-to-day transactions of the coun- try, forms an extremely “liquid” cur- rency which readily adjusts itself to the daily activities of business, and as the life of the check is at the best but brief and its place taken by oth- ers representing other similar trans- actions, the total of the sum thus rep- resented may be not improperly des- ignated as a huge “revolving fund” fluctuating in size and speed of move- ment from day to day and season to seasbn but representing in these days | of big business perhaps as much as 95 per cent ot the total business transac- tions of the country. “Credit,” says 4 modern writer on SATURDAY, MARCH 24, 1923 | tens this wealth i9 Girectea DY into channels of usefulness. brought together in small and quantities from all classes of persons, who,do not immediately need it’ and who do not have the facilities to loan it directly.” 4 America’s Banking Fower The “banking. power” whose use fulness is thu$ multiplied by the credit instruments above referred to is far greater in the United States than in any other country. Muthalt, ts the banking-power of the United tates in 1870 at $2,141,000,000, out of am estimated world total of $7,786- 000,000, our total at that time being slightly less than that of the United Kingdom but vastly more tah eae of any other single country. By 1890 ou, total was, according to the same au- thority, $5,012,000,000, and slightly ex- ceeded that of Great Britain; while Webb, in his Dictionary of Statistics, ts the world’s total in 1908 at $45,- $00,000,000, of which $17,519,000,000 existed in the United States, $11,192,- 000,000 in the “British Empire,” and $5,500,000,000 in Central Europe. No estimate of world banking power Las been made since the beginning of the war period, since the fluctuations in the values of the respective currencies, especially in recent years, render an estimate for the world extremely dif- ficult. Our own total, which has grown from $3,000,000, in 1880, $10,685,000,000 in 1900, $20,000,000,000 in_ 1910, $24,341,000,000 in 1914, and $50, 175,000,000 in 1922, now apparent] forms about 50 per cent of the world’s total. The London Stock Exchange Gazette in its issue of May 25, 1922, remarks that the resources of the banks of the United States are now “approxi- mately equal to those of all other states combined.” The relative growth of the “bank- ing power” of the United States as Joan It is, large The United States Treasury, Washington, D. C. which i ies back of the enormous banking power of the United States compared with the world is illustrated: by the table which follows showing: the banking power at intervals since 1870 of the world as a whole and of the banks of the country. The paid | discounts made by the banking power | be warehoused and await opportunity | claims on the wealth deposited in the | “credit instrument” Even these | this subject, “rests ultimately upon | the United States. up capital belongs to the bank to uti- | of the country form the “life blood” | to sell at favorable rates, and all these | banks of the country, for only an | checks when they finally reach the the fact that many persons possess | Wortp BANKING Power, 1870 To 1922 lize as it may see fit, so does the sur- | of many active industries and lines | features in the activities of the manu- | extremely small part of the actual | bank on which they were drawn are } funds who have no present use for World® United States plus and other profits which have not | of trade is quite justified. The farmer | facturing industries require large | business transactions in the United lot usually paid in cash but prssed to | it, and are willing that it shall be | 1870 — $7,786,000,000 — $2,140,000,000 been distributed to the stockholders, | must have at certain seasons of the | sums of capital and ei deuait by | States are represented by actual cash. | the “clearing house” in which the | employed by others. The banks are | 1g90 — 15,500,000,000 _5,680,000,000 so does its own bank notes which are | year, especially at seed time, harvest, | still larger sums in the form of loans Tf a bank makes a loan to an indi- | Claims of the various banks at which ae of credit. In these are | 1908 45,500.000,000 —17,520,000,000 put in circulation, while long experi- | and the marketing period, a much | at certain periods of the year's activi- | vidaul based on his note or other se- | they were deposited are offset by | sat ered claims upon the unemployed | 1922 | No Data 50,175,000,000 We ence in banking lines shows that banks | larger sum of ready cash than at other | ties. curity it seldom hands him the actual | those of the bank on which they were | Wealth of the country and through * Mulhall to,1890; Webb for 1908, : a =o fo ie . we y 1 ere ke ee oat a i | «6 39 G “J ? jury has been ordered to reconvene | yesterday by Max Greenburg and Co. IDENTIFY THE COUNTIES, TOWNSHIPS ARE CUTTING |1J.(, T. INSTALLS “ROBBERY” SAYS SIKI OF DECISION liu tite 'itct Pas etic hus Sh | ’ eVUs ke : : \tampering during the trial, For the|alleged to have suggested use of the MYSTE Hl 4 \first time it becime knéwn that the ne and is drawing a royalty for ; H “ _jcharges now under consideration re-|each dress sold. Defendant is Abra- MR MARSHALL” \ ferred only to jury tampering of chief] ham Morgan. ! 1 veniremen, ee : scant til dee Be aac | guaiw SOLE Riau Byeiai aah elanem deere as poses being 3, or 6.92 per| 15 Candidates to be Initiated! | New York, Mar, 24-~-The sole right} W Offer to our trade. For York, Mar. 24,—Assistant announced by Lyman A, Ba-| cent as compared with the previous i ' to King Tutenkahmen’s name prices, Phone 684. Capital Attorney Pecora today an- ‘ker of the state tax department to-| year. City tax levies show a very at Meeting : trade mark for dresses is worth $150,-; Steam Laundry Co. nounced that the mys y slight increase, Township taxes | i |00, it was contended by the complain- [ets Ha Eo the The state manent Sand levy, a sho nuasdecideds Ce coats ae Fifteen candidates will be initiat-| fant ly a ault to ostralala competing} BEULAH COAL now $4.75 e ered : “4 cent elers at Elks hall tonight. and in-! eT eg birth h as esa haha [TP T, fer Co. Ph 62. a red with the | compared eth the previous! ‘tajation of offcers and.a smoker! | - er transfer lone 04. Mr. Pecora also ident s ease in the} r. School taxes decreased $139,-| in, Anal i e | one wever, | » per ec asc are be included in the last and) “ > ceneratly nde however, | 958, or pene pe on nt as, comnpated what is expected to be the best] l Iphian to the in-rease in interest fund | property taxes exclusive of | maroring aol tieeseanene a ane: | Ke eisen a New Conneetion with the bond issues of rements and hail taxes! Si Goungelloree Benkston. | : k . wi) EEE BOAT, 2B) Ir, Counsellar—Jay Grills. Mr. Mitchell, listeg in the Phil crest fund levies as or 32 Peri Gonductor—E. B. Gorman. 1 adelphia social re as J. K th the previous year | cent. Page—E. C. Martin. i sley Mitchell, is president of coe. | on of the 1921 andj gentinel—K. A. McCord. ! e Philadelphit Rubber Works Co. badiand Bile cata us pur-! “*Secretary—John L., George. H ‘ husband of Mrs. i Sto een een outa Past Counsellor—O. H. Lerum. ~, pee i tobe ; Felix H. Ullman, distric: deput, or : Bi Inc. c.: Dee. will be the installing officer, { : from Mr. wanted to HOARE pera ne tees H t s ameani tad inn i A mill and elev. bond int. 91,57 i ba H bility that he might have given Mi > bond interest i s i A be in arms today Keenan letters which would be a ! : PE Tanai ae ecienes cele i T0 PRISON: Then a tot scampering to school to Philadelphia this afternoon i Kes ae | tv 5) ; : ft her da > t ne con: joad and ridge 5: 3 4 further data” after a telephone cor BE COURT Lee | Then a high school student versation with the assistant prose- | i cMuOR. if ae p5 Werden, German: i } a Wns shel | 5 y, Mar. °24.—Be-/. eae teotass Decl {cause Prince Frederich Wilhelm} Possibly college i oy yen Lippe, German Lt ieee and then g aectnsive ohlenes \ leader, did not immediatély pro; ; ee + ‘. Tass: of ADE a an. 3 . | duce his passports when ordered) a se ae ~ sments and hail $30,410,771 $1,011,283 Dec. | 14, Free ete esta é \ Busi is ial Tas Bile Who arrested him, 4 French court.) , it was oh infuriated Sencgalese that saw the referee award the) usiness—marriage or both— y and vil. spe 1,481,869 151,515 Inc. | nirtiat yesterday ' sentenced him{ decision to Mike McTigue after their Dublin bout. apte is Siki on the . (d rae Oia Des: bys Gti ean imprisonment andj steps of his Trish training quarters with his white wife and Hugene T./ ; 7 a5 pra 60,5: nc. ae him 500,000 marks. He re-! Stuber, his sparring partner. S en $33,002,263 $865 wc, | cently was fined’ ‘seven million; 7 7 i r chi 2 Grand Total $33,002,253 $855,448 Dec. | ivy on charges of agitation. | Géemnpis had dose dnouck: offers e, Give your child # Siar nage Open a “The counties and townships es they are requird by law to} cen alara aa iRanennen ep — | France. | savings account for ‘him or her now. ave set a gi ‘: e ii -oa-| levy a ‘sufficient amount to meet{ . 4 ie Sate ae pave eet tipree cous of Ber ENO DEGREE FI Une Geel in Enea ay the | Minot, N. D,,.Mar. 24.—Fear that! RESIST ‘ANCE PROBE JURY TAMPERING. ‘ omy for the state and schools,” Mr.) \cvislature. The appropriation of | fatalities may ‘oceur from cating of | Chicago, Mar; 24—J, Birnie: Fields, , ' ® Me the 1923 legislative assembly! suBar which was last night “stolen , state’ game warden at “Mfavana, Ill.,| f ‘ 2 showed a sub-| showed. a large decrease as com- |ffom the ruins of the J. B. Reed war: A ; . and one of the jurors who acquitted | “ compared with | pared with the 1981 legislative ap. {house destroyed by’ fire two weeks |” Stattaart, Gormaty, Mar 24—Chan-| Govemer Len Small on charg isman an y Dut the state | j:opriations and this decrease will | #0 was expressed by Mr. Reed. The ! celtor Cuno, speaking here, reiterated | misuse of state funds after a trial in fiisur ; ‘board of equalization could not |e reflected in the 1923 state tax SuRa was poinoned, he declared, by! hut negotiations with #renen. must | Waukegan, Ill, last summer has been : ; make any large amount of de iquid Paris Green, whieh dripped into 5, based on. unconditfonal evacuation | questioned by, A. Virgil Smith, state's Bismarck N.D. 0 i ; i rata ihe sieer uring ae Fire, Te a the; Ruhr. - He also urge ‘attorney of Lake county, it became J 2 Bro 2g : poi 38 e floor above! # i ne minute all the se- i HELIUM GAS MAY ture reaches within one degree of|the sugar and-the heat of the-flames }*Mee of passive resistance, sagging the | known today. The Lake county gran, curity and comfort off} absolute zero. This property of; melted the Paris Green. . extreme temperature will also} « Sree ea as home. Then swish! And | NOW BE Ll UID make the liquified gas especially! OLDEST BENEDICTINE DIES. Conception, Mo., Mar. 24.—Rt. Rev. ruin! Tcronto, Ont., Mar fessor John C. University of Toront: ered a proc The new discovery, it is said, will open up big possibilities for the gas in the industrial field. Helium is a non-combustible gas which is nearly as light as hydro- gen gas and can ‘be used as a sub- stitute for it. to the present time has been as a filing for dirigible balloons and other lighter than air craft, Windstorm insurance in the Hartford Fire Insur- ance Company cai be ob-' tained at: surprisingly low rates. jum gas. Call on this agency. MURPHY cause of Many: air disasters due to the ig- nition of gas bags could have been avoided, it is said, it helium gas had been used. s In its new liquid state helium will be particularly valuable in refrigeration, since useful in i 24. — Pro- lan, of the has discov- s for tiquifying hel- mercial produc: comparative s¢ States tries in During the wai McCle the country. Its’ principal use up pear Goleaty, said to be the For First ing. be- non-inflammability. Wednesday its tempera-/evenings. » scientific research, cording to Professor McClellan, The value of helium as a com- and Caflada are carcity. The United the only which - it is found, took steps to extract and conserve its helium gas, and since the war it has prohibited, its export from helium ig located at.Bow Island Call Capital. Laundry Co. Phone 684. Dance at Patterson © Hall acr was 89 years old, £ iscenhanced by its is-enhanced by its oni ir the United States Canada’s source of Alta. This field is largest in:existence, ing. Class Dry Clean- We have the and Saturday Frowin Conrade died early today. the oldest Benedictine Abbot in the BEULAH COAL now $4.75 Call ‘Capital... Laundry Co. Phone 684. SHIRTS, Made-to-Order. well known ‘Burmaster Cus-|/ tom Shirt: Co. Leave your order at Klein’s Togeery. Ho and believed to ve to agency for the . Se ceagee I¢snotso hard—Uncle Samis ready 3 tell you how in his New Free Book. Send for it today and-get per ton deliyered, The Wach- the “know-how” of what seems to ter Transfer Co. Phone 62. be the hardest thing in the world. ee Treasury Savings Certificates make For First Class Dry Clean it easy’and safe. Get your copy now. ‘To get the book mail =f this coupon to _ ‘The United States Government \ Address yee Undertakers WEBB BROTHERS Em! : Funeral Directors rs DAY PHONE 246 { |