The Nonpartisan Leader Newspaper, June 24, 1918, Page 19

) | WHERE PEACE AND PROSPERITY REIGN Out of such tranqull rural scenes as this, a typical farm in Iowa, is coming the substance that is sustaining America’s war. Iowa’s fertile fields produce vast quantities of foodstuffs, among which the odd head of fat cattle here and there, on her diversified farms, form in the aggregate a large amount. What Is Banking? A Reader Gives His View of the Excess1ve Reward the Money Lending Class Receives BY DANIEL JOSEPH HEN you see the many banks with their costly buildings you may have asked the question: “How can so many banks, so many men and so many buildings be employed in the commer- cial activities of this community. You may have thought, as many unwisely do, that banking was the depositing of money by one man and the borrowing of it out again by another man at a higher rate of interest. Banks have gotten up a “thrift” campaign to ad- vertise banking. This was brought forth after John Skelton Williams, comptroller of the United States treas- ury, had sent the following bill of particulars to the American Bankers’ association and made it public in his annual report for 1915: “As the records in this office show that more than 1,200 national banks, including banks in 41 states, were charging on some of their loans, as late as September 2, 1915, 12 per cent per annum interest or more (and in numerous cases more than 60 per cent) it can hardly be claimed that the charging of excessive rates of interest is confined to either a few banks or a few localities.” But, you say, that was in 1915. Yet in the March Michigan Business Farmer a man writes in that banks are charging from 12 to 24 per cent interest on loans to buy potato seed to help win the war. That shows how willing the banks are to get on the backs of the poor in times of stress. It is sometimes thought that it will be necessary to limit the amount of land 2 man may own in any one state to 640 acres and thus eliminate human land hogs, landlordism and tenant run-out farms. But it looks also as if it would be necessary to put the issu- . ing and loaning of money in the hands of the government to eliminate bank hogs. We expect a new social order to fol- low this war, based on justice and --labor and not on charity and legisla- tive special privilege. Banking'is a peculiar business. The slickest busi- ness in the world. In it you are emi- nently - respectable and have more . power than many kings. You can withhold credit and break a man or extend credit to a man and make him a millionaire. You will do:ithe latter if you think alike and you: mll with- hold ‘it if you think he stands for a new social order based on h@nesty and justice.” You may imagine ‘that your actions in blacklisting a man in a busi- - ‘ness way:for having thoughts ‘of his . own is different from the burglars methods who enters your place. at night and takes the contents of the till. But you work along approved lines. THE WAY A BANKER DOES IT A man may go to the bank and de- posit $100 and another man may go and borrow $100 and get money but such transactions are comparatively rare. More frequently one man will go with his note and get it discounted and if he has no account will receive a pass book with figures in it some- where near the face of his note. He has put in no money and takes out no money. He has bought “bank credit.” But the bank shows the note this man owes it as an asset and gambles that the man will not draw checks to take out all the money represented by that note in time to break the bank. . Life insurance companies gamble that actuaries know how fast humans die off on average and that such a rate of speed will not be exceeded. And . banks know the average rate of check return and know that from six to 10 dollars’ worth of “bank credit” or book- keeping figures in pass books can be put out against every actual dollar on deposit. We will not say anything here about bank notes issued against bonds bought from the government and on which the government pays in- terest. But we know that it is esti- mated that there are 138 times as much banks deposits as there is currency in existence in the country—but of course this could not be the case if the banks did not call notes given by bor- rowers’ assets. Statements issued by. banks do not show how much loan notes are on hand and over against those figures but the amount of actual cash that went out ‘for them, also the bank discount and the pass book figures or “bank cred- its” because such honest statements would show that these big bank build- ings represent ‘“debts piled up” in- stead of prosperity. It would not be so bad if the government issued the money and handed out money to the borrower for not more than 6 per cent. But when no money is put in and not a cent handed out—nothing taking place but the issuing of “bank credit” and “check inflations” and a gamble on the time of return of the checks, we see that for debt piling and inflation banking has “greenback- ism” beat 40 miles. PAY LOW WAGES, TAKE HIGH PROFITS How does it work for the bank stock- holder? I know a man who took $1,000 stock in a Dakota bank and the first 10 months of its operation his $1,000 paid him back $400. This was a little country bank. I know a young chap, no better than hundreds getting $60 or $60 a month here, who invested $2,000 in stock in a new bank and be- came its cashier at $200 per month. His stock pays $600 per year, or counting his time, $8,000 per year for his $2 000 investment. He had earned prior to that time only $76 per month. But while a few bank officials get good salaries, the large per cent of bank clerks get very low wages, working for honor and the chance to learn the “bank hog” business. Thirty dollars per month is quite a salary for a new clerk in a bank and it does.not usually rise very fast unless he has stock or an uncle. If any of you workingmen have ‘had to sell your Liberty bonds to support yourselves did you get face value for them? If not what discount did they take for YOUR patriotism? Did your bank treat you fairly? WIN YOUR RIGHTS BY USING VOTE There is only about one banker to 1,000 other folks, and it doesn’t seem right that they should have so much to say about your affairs, who should live, who should be blacklisted and die. They do their speculating with your money. Why should a stockholder get 20 per cent on his money in a bank? Can you do jt on your work in the factory or on your crops from the farm? The building and loan associations do business on less than 2 per cent ex- pense. But that is a co-operative bank—not a stockholders’ bank. See the difference? Are you going to stay asleep? Or are you going to take an interest in your affairs. The bankers take an interest in theirs. They look after the congressmen and senators, have them on their boards of directors. But you can’t get to them. You are a poor man. You don’t count because you have no dollars. But you have a vote and the question is where do you throw it away ? Because you do throw it away or things would not be as they are. GROWING MELONS FOR MIDDLEMEN ' ‘The lucious melofi crop of the Mississippi valley is one of the most sought luxuries of the big cities of the North, but this crop passes through the hands of several sets of middlemen (some of them utterly useless) whose tolls; ‘when .exacted, make'a total charge against the product that prevents the melon-hungry hordes in the sweltering cities from __enjoying them. Frequently these melons and citrons are allowed: to spoil by carloads rather than allow the city papulace to obtain them, in order to preserve intact the middleman system, This system is what makes them- luxuries instead of the everyday delights they should be; and this also is what very frequently makes their production .diseouraging to the farmers., The reform of this system to cut out its worst abuses is the goal of achievement set before the Nonpartiun league. Tlua plctnre was taken near Kiowa, Kan. - PAGE Nmmm